Data Centers Are Vital Cogs In Local Economy
Submitted jointly by: Bobbie Kilberg and Debbie Jones
Every time you use your smartphone, send an email, share a photo or watch streaming video, a data center is behind it. Data centers are the backbone of our 21st Century digital economy, storing and powering the services that are often transparent to consumers like you and me. But data centers are enabling economic growth in ways beyond connecting business and consumers to digital content.
Northern Virginia is home to the largest concentration of private sector data center employment and locations in Virginia, and one of the largest in the U.S. In fact, in October 2015, Jones Lang LaSalle announced that Northern Virginia surpassed the Tri-State New Jersey / New York region as the largest data center market in the U.S., with nearly 20 percent of the market share.
Over the past decade, Prince William County has emerged as a key beneficiary of this growth. The data center industry makes a significant, growing, and demonstrable contribution to Prince William County's economic prosperity, according to a January report released by the Northern Virginia Technology Council (NVTC). The Economic and Fiscal Contribution that Data Centers Make to Prince William County, produced by Richmond-based Mangum Economics, outlines the large economic impact data centers have in our county: in 2014, approximately 928 jobs, $54.6 million in wages, and $181.9 million in economic output can be attributed to the data center industry in Prince William
County. Since 2007, the Virginia Economic Development Partnership has announced an average of $285.6 million in investment from this sector in Prince William County per year, reaching a high of $600 million in 2015.
Data center expansion and investment are a critical element, attracting private sector jobs and generating new state and local revenue. Data centers are a high wage and high growth industry. The sector paid private sector wages in Prince William County in 2014 that were 2.2 times greater than the county norm for all private sector firms. Data centers also represent a strong commercial industry that helps diversify Virginia's economy away from its substantial dependency on federal spending. There is evidence, for example, that Prince William County's data centers helped insulate the county from the "double dip" that the state experienced as a result of the "Great Recession of 2007" and the federal sequester in 2013.
Additionally, the data center industry grew 2.1 times faster than the norm across all county industries according to the most recent one-year growth rate for private employment in this sector. In fact, the most recent five-year growth rate for private employment in this sector was 11.8 times greater than the norm across all county industries.
Data centers also generate significant tax revenue for Prince William County - more than $11.5 million in 2014. Their capital intensity translates into a disproportionate amount of property tax revenue, by far the largest source of revenue for Virginia localities. For every $1.00 in Prince William County expenditures this sector was responsible for generating in 2014, it provided approximately $4.30 in county tax revenue to help underwrite the cost of schools, public safety and other county priorities.
As businesses and consumers around the world continue to generate ever increasing amounts of data, countries, states and local jurisdictions will continue to compete to attract new data center investment and jobs, and the economic diversification and positive tax revenue they bring. Prince William County has emerged as a global center for data centers and our local economy continues to benefit. It is important that we recognize our success in this regard and continue efforts to remain an attractive location for these 21st century centers of commerce.
Bobbie Kilberg is President and CEO of the Northern Virginia Technology Council, a membership and trade association representing about 1,000 companies and organizations in the technology community of Northern Virginia. Learn more at www.nvtc.org.
Debbie Jones is President and CEO of the Prince William Chamber of Commerce, a membership organization serving over 1,300 businesses in Prince William County and the Cities of Manassas and Manassas Park. Learn more at www.pwchamber.org.