Commentary: Data centers as new economic foundations

Josh T. Smith, Tribune News Service on Nov 11, 2025

Published in Op Eds

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Headlines have been full of misunderstood and misrepresented claims about data centers.

If you only looked at this reporting, you would only see them as big, concrete boxes filled with computers that consume too much electricity and water. That picture misses the bigger story. For forward-looking cities and towns, data centers can be the cornerstone of a more diverse, resilient, and prosperous local economy.

To understand data centers, remember that they are the computers that you use every day, but never touch. When you search for a recipe, pull up a file stored in the cloud, or ask ChatGPT how to winterize your sprinklers, you are relying on this network of computers spread out across the country.

You punch in the request on your phone. That is only where it starts. Data centers enable your phone or laptop to pull up information for any request at any time. This is why data centers are so important for the modern world.

Rural America may be the biggest winner in the data-center boom. Large facilities need space—but they also need to stay near population centers to minimize latency (the time it takes to deliver the results to you).

That’s why the sweet spot for many projects is just outside metro areas. That’s close enough to serve major markets, far enough to take advantage of affordable land. For rural counties once dependent on agriculture or resource extraction, a data center can be a powerful source of new tax revenue and local infrastructure investment.

A data center project won’t employ hundreds of people onsite, of course. In contrast to a manufacturing plant, data centers may seem to have few jobs. The economic value comes from what those servers enable: the digital businesses, logistics networks, health systems, and manufacturers that depend on data processing every second of the day. Every data center anchors countless jobs elsewhere—developers, cybersecurity experts, technicians, construction crews, and service workers.

The fiscal benefits of data centers can be striking. Married with prudent local budgeting and planning, cities and towns can leverage data center investments to keep taxes low and support local infrastructure. For example, data centers in Loudoun County, Virginia, contribute $26 in taxes for each $1 that they require in public services. That’s a big punch to support schools and other local development.

A major confusion in data center discussions arises when people compare a data center’s resource use to the equivalent number of homes. These comparisons have been almost uniformly misleading because they compare apples and oranges. Any industrial facility will use far more of everything than homes. In context, the water and energy use of data centers is absolutely nothing to panic about.

Take a high-end projection from the Department of Energy that suggests data centers could triple their electricity use by 2028. What would that mean for water use? Even under this extreme scenario, that’s roughly the same amount of water used to irrigate 260 square miles of corn today, or about 1 percent of total corn irrigation in America. On top of this, data center companies have all made commitments to support water infrastructure and sustainability. Name the tech giant, and they’ve made a commitment to replenish the water that they use.

What about meeting the tripled demand for electricity? Of course, we’ll need to build more to meet this moment. But tech firms have long pioneered arrangements that expand local generation capacity rather than drain it. In 2016, Microsoft funded both a natural-gas plant for reliability and contracts with nearby wind farms to tap abundant regional energy. Partnerships like this strengthen the local grid.

The truth is that data centers aren’t just serving the tech sector—they’re serving all of us. They are the physical foundation of the cloud economy, supporting everything from hospitals and banks to your leisurely video streaming. For communities thinking about their economic future, welcoming a data center is about the infrastructure that will define the next generation of growth.

The question for local leaders is whether they’ll seize the moment to ensure that their community shares in those benefits.

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Josh T. Smith is the Energy Policy Lead for the Abundance Institute, a nonprofit based in Utah. He is the coauthor of a guide to data centers released in July. You can follow him on X/Twitter:@smithtjosh.

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