Data centers

 

What is the economic impact of data centers?

In 1988, the Netherlands was the second country in the world to be connected to the Internet. Since then, the Netherlands has always remained at the forefront of networks, digital infrastructure and connectivity. Thanks to its central location, the Netherlands is an ideal (digital) gateway to the rest of Europe, also known as the Digital Mainport, as a logistics hub next to Schiphol airport and the port of Rotterdam.

This unrivalled digital infrastructure has created a strong digital ecosystem that attracts many international tech companies. The digital infrastructure and the strong digital ecosystem are important reasons for tech companies such as Booking.com, Netflix, Palo Alto, and many others to establish their European headquarters in the Netherlands. This ensures an excellent investment climate and economic growth, in the form of investments and employment.

The data center and cloud industry has become an important part of our Dutch economy. The total digital sector accounts for around 25% of GDP. Furthermore, the data center and cloud industry attracts around 20% of all foreign direct investment in our country – making it the largest sector when it comes to FDI. With a growth rate of around 10% per year, more and more people have a job that is directly or indirectly related to this digital sector. Consider the work involved in building data centers, the pull-effect it has on IT companies, but also paid taxes and social charges. The Dutch Central Bureau of Statistics (CBS) estimates that the total Dutch Internet economy has a value of €110 billion and accounts for 333,000 FTE, of which 264,000 jobs in internet-related IT. Research by Pb7 Research from 2018 shows that the Dutch data center market is good for nearly 13,000 jobs and makes an economic contribution of more than a billion euros.

Data centers generate an enormous amount of employment, because they are part of a unique logistics chain consisting of all kinds of companies, from Internet exchanges, hosting- and cloud providers, to consulting firms and fiber optic providers. In total, around 5,000 FTEs are working directly in the data centers nationwide. In addition to the staff on the payroll of a data center, many employees are hired externally and there is often cooperation with staff from customers and suppliers. In total, Dutch data centers will create no less than 12,800 jobs in 2019, and this is estimated to grow to 16,800 in 2024. In addition, there are many people needed to build a data center. Building a multi-tenant data center is often a process of three to five years. With large single-tenant hyperscale data centers it can even take five to ten years and more than a thousand employees work on the construction site every day.

For more information about data centers and employment, see our positions.

The Dutch digital data hub is one of the most important in the world. Just like the port of Rotterdam and Schiphol Airport, we are the international gateway to Europe: the Digital Gateway to Europe, or ‘digitale mainport’ in Dutch. Companies from all over the world see the Netherlands as the distribution point for data and as an important location for their data centers, cloud applications or their headquarters

In addition to data centers, the digital mainport also consists of Internet providers, backbone providers, hosting and cloud providers, Internet exchanges, domain name registrars, facility and hardware suppliers, consultancy companies, design agencies, construction companies and other suppliers. Together, they form a unique logistics chain. With 20% of all foreign direct investments going into the Netherlands, our Dutch digital mainport is the largest FDI-sector.

Strategically located in the center of Europe’s largest markets, the Netherlands has also proven itself as a magnet for international companies and a leading location for the establishment of European or regional headquarters. A stable country with a supportive corporate tax structure, highly trained, multilingual employees available and a superior logistics and technology infrastructure, the Netherlands offers companies a perfect environment to compete successfully in Europe. And with an attractive quality of life as a bonus.

Everywhere in the Netherlands, a professional data center can be found within a radius of 30  kilometer (around 19 miles). All these regional data centers have a unique ecosystem and an excellent connection with the Amsterdam region with little latency (connection speed). Regional data centers offer a platform to organizations to process, store and transport their services and data. Nowadays, organizations are highly dependent on online services. Regional data centers offer local parties the opportunity to professionalize and grow by expanding their online services. That is why there is a data center in every province in the Netherlands. Regional data centers strengthen the local economy and provide services for local businesses, healthcare or education providers, local IT service providers, hosters and (cloud) software suppliers. As a result, the regional data centers are the most effective when they are located close to a digital innovation hotspot, where they can connect all kinds of digital players and start-ups. With the arrival of new technologies such as 5G, Edge Computing and Internet-of-Things (IoT), the role of local data centers is becoming increasingly important; because they are much closer to the user than data centers located in global hubs. All Dutch data centers together therefore form a unique, future-proof logistics hub.

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