techUK Report - Foundations For The Future: How Data Centres Can Supercharge UK Economic Growth
techUK is excited to announce the release of its latest report highlighting the crucial role of the data centres sector as the backbone of the UK's digital economy. Data centres are poised for unprecedented growth, with the potential to contribute an additional £44 billion to the UK economy by 2035.
techUK's report demonstrates just how significant a contribution data centres make to the UK economy, and what more can be done to sustain this infrastructure and support their growth. Importantly, the report also shines a light on the impact data centres make in the nations and regions, and shares lessons from data centre development in West London and Slough, Greater Manchester and Cardiff and Newport.
The primary economic value of data centres is their role in enabling digital transformation across all sectors of the economy, allowing businesses to benefit from digital products and services that allow them to operate and be more efficient and productive. Although the wider economic impact induced and enabled by data centres is beyond the scope of the report, the fact that almost every job in the UK is reliant on a data centre should not go unnoticed and should be a key consideration for national and local policymakers reading this report.
According to the report’s analysis, data centres are currently contributing:
£4.7 billion in Gross Value Added (GVA) annually to the UK economy.
43,500 jobs across the UK economy.
£640 million in tax revenue to the exchequer.
However, as technology continues to evolve, with significant advancements in AI and emerging technologies, the demand for data centres is set to increase at a much faster rate than it ever has before, with projections of future growth at between 10-20% a year.
techUK’s analysis emphasises that if the UK can increase data centre supply above its recent growth rate of 10% to 15% a year, this could have a transformative impact on the sector and wider UK economy by 2035, unlocking:
A GVA boost: £44 billion additional GVA between 2025-35 from the construction and operation of data centres
An employment boost: 40,200 additional jobs directly employed in (often high-paid) data centre operational roles by the year 2035; 18,200 additional jobs directly employed in data centre construction roles over the period 2025-35
A tax boost: an additional £9.7 billion in tax revenue generated by the industry.
These figures highlight the industry’s immense potential to spur national and regional growth, drive innovation, and support high-quality jobs throughout the country. If this national and regional economic opportunity is to be realised, it is essential the broader data centre policy opportunities and challenges are fully understood.
Data centres are critical to powering the technology that drives our modern economy. This government has already begun to give a boost to the sector by giving them Critical National Infrastructure status which will strengthen protections against events like cyber-attacks.
As these findings show, if government and industry work together to tackle the challenges and harness the opportunities the sector offers, we can create thousands of jobs and drive prosperity across all corners of the country. We have already seen the sector respond with over £25 billion of private investment committed in recent months.
Peter Kyle
Technology Secretary
Key recommendations
The report sets out several key policy areas where government action can further enable the growth of the data centre sector and address existing challenges:
Energy
Data centres require large amounts of energy, and the sector faces challenges in securing timely and affordable access to clean energy. techUK highlights the need for government support in improving grid connections, reforming processes, and enabling access to renewable energy through initiatives like Power Purchase Agreements (PPAs). Additionally, the development of on-site renewable energy sources such as geothermal or small modular reactors (SMRs) can help ensure the long-term sustainability of data centres.
Sustainability
Despite a doubling of data centre workloads since 2015, electricity demand has remained flat due to the industry’s ongoing efficiency improvements. The report recommends greater integration of data centres into district heat networks, the adoption of sustainability reporting standards, and continued focus on resource optimisation to support the sector’s journey towards net-zero emissions.
Planning Reforms
The UK’s planning system needs reform to accelerate data centre development. The report calls for the introduction of a National Policy Statement for data centres, streamlined planning processes through the Nationally Significant Infrastructure Projects (NSIP) regime, and improved training for local planning authorities to ensure consistent decision-making. These changes will help ensure that data centres can be built quickly and efficiently, contributing to local and national economic growth.
Skills Development
Data centres offer high-paying, stable jobs, but the industry faces challenges in attracting skilled workers. The report encourages reforms to the apprenticeship levy and greater promotion of career pathways in the sector. Initiatives such as the National Data Centres Academy and local partnerships with colleges are key to addressing skills shortages and fostering the next generation of talent.
techUK looks forward to working with the Government to deliver on economic growth
techUK thanks this report’s sponsors: Ark Data Centres, Colt Data Centre Services, Keysource, Pulsant, Shoosmiths and Telehouse for their support, alongside all techUK members, the techUK Data Centre Council – comprised of twenty senior business leaders representing the full spectrum of interests of the sector, wider industry, and the representatives of national and regional governments who have contributed their time.
Data centres are the backbone of the digital economy; without them our transport, energy and wider economy couldn’t function. And with continued AI advances, the importance of data centres to unlocking tech-led growth is only accelerating. Despite the critical role data centres play in supporting sustainable economic growth, their potential is far from fully realised. With the right policy support and collaboration between industry and government, the sector is poised to drive further innovation and enable digital transformation across all sectors of the economy across the country.
Matthew Evans, Director for Markets and COO
techUK
The essential role that data centres play in our modern economy is underappreciated by the public and politicians alike. Not only do they unlock the vast array of technological services we all rely on every day but they’re big business – bringing investment, jobs and tax revenues at both a local and national level. This report aims to shine a light on both their current impact but also their future potential. If the UK can present itself as an obvious market for international investors over the next decade, we all stand to gain.
Nick King, Managing Director
Henham Strategy
Innovation Summit 2024
Join techUK on 6 November as we traverse the extraordinary and ground-breaking discoveries made possible by the application of emerging and transformative technologies.
techUK provides a collective voice for UK Data Centre operators working with government to improve the business environment for our members. We keep members up to date with the key technical and regulatory developments that may impact growth and on funding opportunities that may increase commercial competitiveness. Visit the programme page here.
techUK Report Launch - Foundations For The Future: How Data Centres Can Boost UK Economic Growth, 5 November
Join techUK, Henham Strategy and our industry experts for the launch of techUK's latest report highlighting the crucial role of the data centres sector as the backbone of the UK's digital economy. techUK commissioned Henham Strategy to develop this report, presenting quantitative and qualitative evidence to demonstrate just how significant a contribution data centres make to the UK economy, and what more can be done to sustain this infrastructure and support their growth.
Our members develop strong networks, build meaningful partnerships and grow their businesses as we all work together to create a thriving environment where industry, government and stakeholders come together to realise the positive outcomes tech can deliver.
Luisa C. Cardani is the Head of the Data Centres Programme at techUK, aiming to provide a collective voice for UK operators and working with government to improve business environment for the data centres sector.
Prior to joining techUK, Luisa worked in the Department for Digital, Culture, Media and Sport as the Head of International Data Protection, where she led on the development of elements of the UK's data protection and privacy policy. In her role, she was also the UK official representative for the EOCD Privacy Guidelines Informal Advisory Group.
She has held a number of position in government, including leading on cross-cutting data provisions in the EU-UK Trade and Cooperation Agreement, and in high priority cross-departmental projects when working in the Department of Business, Energy and Industrial Strategy.
She holds an M.Sc. from University College London's Department of Political Sciences.
Weronika joined techUK as a Programme Manager for Sustainability in October 2023.
Her role involves advocating for the tech sector in front of key policymakers and stakeholders. Weronika also leads the environmental and sustainability efforts within the Data Centres Group.
Prior to joining techUK, Weronika worked in public affairs and government relations in the legal sector, focusing on innovation and ESG within financial services. She also spent 2 years working as a Caseworker at Parliament. She holds a BA in Politics & International Relations from Queen Mary University of London.
Outside of work, Weronika can be found on a tennis court, at the gym, practicing yoga, or indulging in her love for Taylor Swift's music as a dedicated Swiftie.
Programme Assistant, Data Centres, Climate, Environment and Sustainability, Market Access, techUK
Lucas Banach
Programme Assistant, Data Centres, Climate, Environment and Sustainability, Market Access, techUK
Lucas Banach is Programme Assistant at techUK, he works on a range of programmes including Data Centres; Climate, Environment & Sustainability; Market Access and Smart Infrastructure and Systems.
Before that Lucas who joined in 2008, held various roles in our organisation, which included his role as Office Executive, Groups and Concept Viability Administrator, and most recently he worked as Programme Executive for Public Sector. He has a postgraduate degree in International Relations from the Andrzej Frycz-Modrzewski Cracow University.
Download the Annex I with Methodology and Sources here.
