Data centres stand at the core of our digital economy, and without them, our vital industries wouldn’t function. According to a new study released by Technology Association techUK, the data centre industry has the potential to be the fastest-growing industry in the UK.

According to the Foundations of the Future report, presented by techUK, data centres delivered £4.7 billion in Gross Value Added (GVA) annually to the national economy. The report also indicated that the industry created 43,500 jobs across the UK, providing £640 million in tax revenue. As technology continues progressing, with considerable advancements in AI and new technologies, the demand for data centres will rise much quicker than ever, with forecasts for future growth expected to be between 10 and 20% each year. The report states that if the UK can achieve the expected growth of data centres above its recent growth rate, this could significantly impact the industry and the UK economy by 2035.

The report believes the development and operation of data centres can generate an additional £44 billion in GVA between now and 2035. Furthermore, it should strengthen employment, with over 40,000 jobs directly created in data centre roles by 2035 and over 18,000 additional jobs in data centre construction positions over the next decade.

Matthew Evans, the COO at techUK, believes data centres represent the core of the digital economy, and without them, many of our vital industries wouldn’t be able to function. With continued progress in technology, the importance of data centres in enabling tech-focused growth is rising.
With the necessary policy measures and stronger collaboration between industry and government, the industry will strengthen innovation and enable digital transformation across all markets.

The report includes several key policy areas where government action can strengthen data centre growth and tackle current challenges.

Energy

Data centres require significant energy, and the industry faces challenges in delivering continuous and affordable access to clean energy. techUK believes there is a growing need for government support in enabling renewable energy measures. Furthermore, the creation of on-site renewable energy sources can allow the long-term sustainability of data centres.

Sustainability

Despite a rapid increase in data centre workloads, electricity demand has remained relatively balanced due to continued efficiency progression. The report recommends enhancing the integration of data centres in district heat networks, adopting sustainability reporting standards and prioritising resource optimisation to support the transition towards net-zero emissions.

Planning Reforms

The UK’s planning system requires reform to enable data centre development. The report suggests introducing a national policy statement for data centres, streamlining planning processes via the Nationally Significant Infrastructure Projects (NDIP) plan, and enhancing training for local planning authorities to facilitate accelerated and consistent decision-making. These changes can enable data centres to develop quickly and effectively, contributing to accelerated economic growth.

Skills Development 

Data centres provide well-paid, secure opportunities, but the industry faces many challenges in attracting and retaining skilled professionals. The report suggests the need to reform the apprenticeship levy and a greater emphasis on career pathways in the market. Programs such as the National Data Centres Academy and local partnerships with educational organisations are critical to tackling skills shortages and supporting the next wave of talent.

Data centres are vital to supporting the technology that drives our economy today. The government has boosted the industry by providing Critical National Infrastructure status, which gives added protection against potential cyber-attacks. If the government and industry can collaborate, we can create thousands of jobs and generate prosperity nationwide.

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