Reflections on techUK's report: how data centres can boost UK economic growth

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About techUK's report

In an age where digital technology is at the heart of economic advancement, data centres have emerged as the backbone of the UK’s digital infrastructure. A recent report by techUK, a trade association fostering innovation and collaboration across business, government, and stakeholders, underscores the immense contribution that data centres make to the UK economy. In partnership with Henham Strategy, techUK has provided a detailed examination of the sector, presenting both quantitative and qualitative evidence of its importance, alongside strategic recommendations for its growth.

The economic contribution of data centres

The report presents compelling evidence of the data centre sector’s substantial impact on the UK economy. Currently, data centres annually contribute £4.7 billion in Gross Value Added (GVA), support 43,500 jobs, and provide £640 million in taxes to the exchequer. These figures alone highlight the sector’s significance, but what’s even more promising is the projected annual growth rate of 10-15%, signalling further economic benefits.

To harness the full potential of data centres, the report calls for greater collaboration between industry leaders and both central and local governments. This collaboration is crucial for providing the necessary power, connectivity, and skilled workforce required to sustain growth in a sector that is critical to economic growth.

Drawing lessons from various regions, the report highlights examples of successful data centre projects, including our own ongoing MCR2 construction project in Manchester in collaboration with our long-standing partner, Keysource. This project exemplifies sustainable development, aligning with our commitment to delivering high-quality, resilient, and secure solutions. Such examples demonstrate the importance of integrating sustainability into growth strategies, ensuring long-term benefits for both the economy and the environment.

techUK's key recommendations

The report by techUK is insightful and comprehensive – for the purposes of this article, we have extracted and focused on a few key recommendations made by techUK across four areas to bolster the data centre sector’s contribution to the national economy. To get the full picture, we strongly suggest reading the full report.

Energy

The report recognises the industry’s strides towards securing low and carbon-free energy supplies. To further this progress, techUK suggests actions that should be taken at policy level such as monitoring and reporting on connection queues and reforming queue processes to ensure timely market entry of projects, monitoring energy costs, and providing open data on grid connection timescales and project options for developers and investors to enable contractual certainty and flexibility (especially with potential digital infrastructure demand increases).

It is incumbent upon data centre operators to make responsible energy choices that align with sustainability goals. While generating our own electricity might not be feasible, we do have the power to choose where our energy comes from and ensure it is environmentally friendly. This means going beyond merely purchasing certificates that claim renewable energy use – it requires a commitment to sourcing genuine, renewable, and zero-carbon electricity. We achieve this by partnering with suppliers like Bryt Energy, a provider of 100% renewable electricity for our entire electricity supply” (Dominic Phillips, Datum CEO).

Sustainability

Despite a doubling of data centre workload since 2015, electricity demand from data centres has remained stable, which demonstrates the progress the data centre sector has made in driving efficiencies. techUK advocates for a number of measures to further reduce environmental impact and promote sustainable operations, including rewarding operators who have robust net-zero plans in place, and ensuring flexible rules around heat export.

  • Our experience: Our Embodied Carbon Impact Assessment Report evaluated the expected carbon footprint of our ongoing Manchester data centre construction project (MCR2), guiding decisions on sustainable infrastructure and building material selection – we prioritised locally manufactured materials and employed local labour and subcontractors wherever possible, reinforcing our commitment to supporting the community and reducing transportation emissions. Furthermore, the cooling systems have been designed with heat recovery capabilities and we are in the early stages of discussions with local stakeholders to channel this recovered heat into a community heat network project.

Planning

According to techUK, reforming the UK’s planning system is essential to unlocking the full potential of data centres to drive significant economic growth. Amongst other things, techUK recommends allocating resources within local planning authorities to efficiently progress data centre applications.

We are pleased to report that we have had a very positive experience with our ongoing construction of MCR2 – our collaboration with a communicative local planning authority has been instrumental, providing clear and helpful guidance throughout the design and build process. From the outset, we designed MCR2 to reflect sustainable best practice, incorporating features like photovoltaic systems, heat recovery, and on-site EV chargers. We also designed the building to ensure that it complements its local surroundings, which helped avoid any significant planning hurdles. We have prioritised environmental considerations by minimising noise and integrating a substantial attenuation tank to support public drainage systems during severe storms, reducing flooding risks” (Matt Edgley, Datum COO).

Skills development

Addressing the skills gap is vital for the sector’s future. The report urges central and local governments to implement policies that promote the development of digital and technical skills to ensure that the next generation is equipped to thrive in careers within data centres, sustaining the industry’s momentum.

  • Our experience: As a growing company, we’re acutely aware of the need to foster an environment that encourages continuous learning and skills development. We recognise the importance of nurturing our team to develop the technical skills and expertise required to thrive in this sector.

Find out more

The contribution of data centres extends beyond mere infrastructure – they significantly impact the economy at local, regional, and national levels, and create employment opportunities. The industry is spearheading innovations and initiatives to enhance the resilience, sustainability, and efficiency of data centres but, despite these advancements, the sector faces several challenges that need addressing to fully harness its potential in driving economic growth within the UK. Overcoming these hurdles will be crucial to ensure that data centres continue to support the nation’s digital infrastructure and economic development.

The full techUK report is available here. Or, to talk to us about your data centre requirements, please get in touch with a member of our team.