The datacentre sector could become one of the fastest-growing industries in the UK, but doing so will require greater collaboration between industry and decision-makers at both local and national government level, according to a TechUK report.
The tech trade body’s Foundations of the Future report said that demand for datacentre capacity in the UK is set to grow at a faster pace than ever before, as enterprises look to tap into technology advancements such as artificial intelligence (AI).
According to the report’s figures, compiled by consultancy firm Henham Strategy, the UK datacentre market currently contributes £4.7bn in gross value added (GVA) annually to the UK economy and is a source of 43,500 jobs within the economy.
Despite this figures, Nick King, managing director at Henham Strategy, said that the contribution the market makes to the UK economy is not fully appreciated.
“The essential role that datacentres 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,” said King.
“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.”
By Henham Strategy’s calculations an additional £44bn in GVA could be generated between 2025 and 2035 by the datacentre industry if the UK server farm’s footprint grows beyond its current annual growth trend rate.
If this can be achieved, it could lead to the creation of 40,200 additional jobs for higher-paid professionals working in datacentre operational roles, as well as a further 18,200 jobs in the datacentre construction space between 2025 and 2035.
The industry already generates £640m in tax revenue annually, but the report further states that an additional £9.7bn in revenue could be generated during the 10-year period from 2025.
According to Matthew Evans, chief operating officer and director of market programmes at TechUK, if the industry is to achieve its potential, change will be needed.
“We have a choice; we can go for growth, enable the development and investment in datacentres while also increasing our own resiliency or we can hinder them, lose their investment and the services that they enable,” he said in the report’s foreword. “To enable that growth, greater collaboration between industry and both central and local government is essential.”
The report pinpoints areas where government support will be needed to help the industry reach its potential, with energy supply and security being top of the list.
Specifically, TechUK is calling on the government to invest in improving grid connections and making it easier for operators to access renewable energy sources, so they can achieve their own sustainability goals too.
Other areas of concern flagged by the report include addressing the planning barriers that slow down datacentre developments, which is an area the government has already committed to addressing, and closing the datacentre skills gap.
“A reliable power supply, high speed connectivity, continued sustainability gains, timely planning decisions, and skilled workers are critical to additional datacentre success,” added TechUK’s Evans. “As it has already done so, the sector will play its role, but we also need the government’s support to help supercharge our economic growth.”
In a statement, technology secretary Peter Kyle said that the government is committed to helping the UK datacentre sector achieve its potential.
“Datacentres 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,” he said.
“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 £25bn of private investment committed in recent months.”
