Beyond Data Centers:
The Economic Ripple Effect of Digital Infrastructure
The economic impact of data centers extends far beyond the jobs created inside the building themselves.
In Virginia, data centers anchor a digital infrastructure ecosystem that drives job creation, business growth, and long-term economic resilience across the Commonwealth by generating demand for a wide range of supporting
businesses.
Data centers create jobs, strengthen local tax bases,
boost regional competitiveness, attract capital
investment, support growth industries, drive innovation,
and help future-proof Virginia’s economy for decades.
Creating jobs
As demand for digital infrastructure surges, a wide
network of industries is activated to support it, including
HVAC, electrical contracting, steel and sheet metal
fabrication, construction, engineering, and advanced
manufacturing. These sectors provide the materials,
labor, and expertise needed to build and maintain the
data-driven backbone of our economy.
Beyond construction, data centers generate ongoing
demand for local vendors and skilled trades, creating
thousands of well-paying, long-term jobs in communities that might not otherwise see this kind of investment. From supplying custom ductwork and power systems to managing climate control and maintenance, companies across the Commonwealth are deeply embedded in the data center supply chain.
The data center industry contributes an estimated 74,000 jobs, $5.5 billion in labor income, and $9.1 billion in annual GDP to Virginia’s economy, according to a 2024 report by the Joint Legislative Audit and Review Commission (JLARC).
A growing number of businesses operate in Virginia because of the data center sector, including companies that manufacture power transformers and other power solutions, cooling equipment, raised access flooring, and protective packaging for backup power systems.
Those jobs, in turn, support additional employment across the broader economy – from suppliers and logistics providers to positions in hospitality, retail, and transportation.
Economic studies underscore the scale of the industry’s ripple effects. Data center jobs have a powerful multiplier effect across the broader economy.
Mangum Economics found that for every job inside a Virginia data center, an additional 3.5 jobs were supported elsewhere in the state in 2023, excluding construction. A separate PwC analysis found that nationally, each direct data center job supported an average of 6.5 additional jobs between 2017 and 2023.
These jobs extend well beyond construction and tech, generating employment in local restaurants, hotels, retail, and other service-based businesses that benefit from increased activity and investment in the region.
Watch industry leaders in Virginia talk about the economic ripple effects:
ColonialWebb Senior Vice President Nathan Wethington talks about how important Virginia’s digital infrastructure ecosystem is to the Henrico County-based company.
Acoustical Sheetmetal Co. CEO Margaret Shaia talks about how the Virginia Beach-based company has grown and added jobs largely because of Virginia’s digital infrastructure ecosystem.
Weidmuller USA’s President and CEO Randy Sadler talks about how the company has added new jobs and expanded its engineering and production facility in Chesterfield County to meet growing industry demand.
Strengthening Local Tax Bases
Beyond employment, data centers contribute substantially to state and local tax revenues, primarily through real estate and business equipment taxes.
For some localities, the taxes paid by data centers account for a significant share of total revenue.
In Loudoun County alone, data center taxes generated $733 million in fiscal year 2023, representing 31 percent of total county tax revenue, while Prince William County collected $110 million, or 7 percent, according to the JLARC report.
Local governments have used those revenues to support community priorities and investments, including infrastructure, tax relief, and housing initiatives without placing the same demands on public services as other types of development.
Henrico County, for example, used data center tax revenues to create a $60 million affordable housing trust fund.
Beyond taxes, many data center operators actively engage in philanthropy and community partnerships, supporting local nonprofits, workforce training programs, and STEM education initiatives.
During the last couple of years, Meta, the parent company of Facebook, which has a large data center in eastern Henrico County, has donated more than $4 million to community nonprofit organizations, schools, and educational programs across the Richmond region.
Boosting Regional Competitiveness
A robust digital infrastructure ecosystem delivers economic and community benefits while strengthening Virginia’s ability to retain and attract talent and investment.
And Virginia needs this help. From 2013 to 2023, Virginia lagged all Southeast states and most comparative metro regions in population, talent, and GDP growth, according to data from the U.S. Census Bureau and the Bureau of Economic Analysis.
Expanding digital infrastructure represents an effective way to boost workforce productivity, which in turn drives GDP growth.
Digital infrastructure also provides a competitive advantage by linking and serving economic assets – port terminals, universities, business centers, government services, and transportation infrastructure.
This linkage also includes global connections. Virginia’s digital infrastructure provides access to Global Internet via subsea connectivity to Europe and South America – enabling the fastest response times.
All of this makes the I-64 Innovation Corridor megaregion from Metro Richmond to Hampton Roads more competitive relative to other places Virginia often competes against for talent and business investments.
Attracting Capital Investment
Data centers, as part of our digital infrastructure ecosystem, have been instrumental in driving capital investment in Virginia.
Between fiscal years 2022 and 2024, data centers accounted for 84 percent of all capital investment tracked by the Virginia Economic Development Partnership.
High-quality digital infrastructure also attracts both domestic and international investment. Companies are more likely to invest in regions where digital capabilities support vibrant technological and commercial activities.
Supporting Growth Industries
Digital infrastructure provides the backbone that allows Virginia’s high-growth sectors to thrive and expand.
Those sectors include industry clusters like advanced manufacturing, clean energy, cybersecurity, data analytics and modeling simulation, life sciences, port operations, logistics and warehousing, uncrewed systems, and aerospace water technologies.
Companies in these industries will be attracted to and thrive here with a robust and growing digital infrastructure.
Driving Innovation
A strong digital infrastructure ecosystem accelerates innovation by providing startups, researchers, and established companies access to the high-capacity computing, storage, and connectivity they need to develop and scale new products and services.
This ecosystem enables emerging technologies such as artificial intelligence, advanced analytics, cybersecurity, and cloud-based platforms, which in turn fuel the creation of new industries, strengthen existing ones, and position regions to lead in the next generation of economic growth.
Helping Future Proof the Economy
The digital infrastructure ecosystem also is the foundation for the accelerating deployment of artificial intelligence across the economy.
As AI shifts toward more distributed, real-time, and latency-sensitive applications (agentic AI), proximity and reliability to data centers become even more important.
Edge computing and localized digital infrastructure, backed by dependable power, will increasingly determine which regions can support next-generation services and attract high-value investment and talent.
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The bottom line: the data center conversation should be framed in this broader digital infrastructure and economic empowerment context.
What may look like a single-purpose facility from the outside is, in practice, a catalyst for jobs, revenue, skills, capital investment, long-term competitiveness, and innovation – an economic ripple effect that continues to expand and deliver benefits as Virginia’s digital economy grows.