The datacentre sector in the UK is on the brink of rapid growth, but it needs stronger teamwork between the industry and local and national government, according to a recent TechUK report.
The report, “Foundations of the Future,” highlights an increasing demand for datacentre capacity as businesses want to leverage technology advancements like artificial intelligence (AI). Right now, the UK datacentre market adds £4.7 billion annually to the economy and supports 43,500 jobs. But Nick King from Henham Strategy believes many people, including politicians, don’t fully recognize how essential datacentres are.
“They provide crucial technological services we depend on every day and are major contributors to investment, jobs, and tax revenues for both local and national economies,” King noted. He stressed the importance of showcasing the current and future impact of datacentres. If the UK can position itself as an attractive market for global investors over the next decade, it could benefit everyone involved.
Henham Strategy projects that the datacentre industry could generate an extra £44 billion for the economy between 2025 and 2035 if the growth keeps up. This could create over 40,000 well-paying jobs in datacentre operations and another 18,200 roles in construction during that timeframe. Currently, the sector already brings in £640 million in tax revenue per year, with the potential to add nearly £10 billion more over the next decade.
Matthew Evans, COO at TechUK, emphasizes that achieving this potential requires significant change. “We can choose growth by fostering datacentre development and investment, or we can hold back, losing out on both the investment and the services they provide,” he said. According to him, collaboration between the industry and the government is crucial.
The report identifies key areas where government support can make a difference, starting with energy supply and security. TechUK urges the government to enhance grid connections and facilitate access to renewable energy so datacentre operators can meet their sustainability goals.
Other challenges include addressing planning barriers that slow down development and closing the skills gap in the workforce. “Critical factors for success include reliable power, fast connectivity, sustainability efforts, timely planning, and a skilled workforce,” Evans added. He believes the sector is ready to contribute, but government support is needed to maximize growth.
Technology Secretary Peter Kyle reiterated the government’s commitment to the datacentre sector. “Datacentres are vital for powering the technology that drives our modern economy. We’ve already recognized their importance by giving them Critical National Infrastructure status, which strengthens protections against cyber threats,” he said. According to him, if the government and industry collaborate to overcome challenges and seize opportunities, it could lead to thousands of new jobs and increased prosperity across the nation. He pointed out that the sector has already attracted over £25 billion in private investment in recent months.