Economic benefits of data centres have been 'exaggerated', report claims

The report claims that despite sustaining just 3,300 permanent jobs in Ireland, data centres use 23% of the country's power output. File picture

The economic benefits of data centres to Ireland have been “exaggerated” and centre on “flawed methodology” based on activity that pre-dates their construction, a report claims.

How We All Pay for Big Tech – the social, economic and environmental costs of data centres in Ireland,also claims data centres cannot be compared to other industrial sectors like the motor industry, given the disparity in the number of jobs provided by both.

It argues that the total value to the Irish economy of high-tech construction, including the construction of data centres, amounts to just 1% of the value of exports via computer services performed on behalf of the foreign tech multinationals based here. 

This suggests the overall economic impact of building data centres here is negligible.

The report’s authors, including academics Patrick Bresnihan and Patrick Brodie of NUI Maynooth and University College Dublin respectively, argue that Ireland’s 129 data centres — despite sustaining just 3,300 permanent jobs — utilise 23% of Ireland’s power output and used 254.7bn litres of water over a 10-year period. 

This is equivalent to 340,600 homes or about a fifth of the occupied dwellings in Ireland, while 50,000 additional homes could have been built in the five years to 2024 “with the capital invested in data centres”.

Government criticism

The Government was criticised last month when it emerged that the Department of Enterprise had sought changes to a draft report compiled by consultants KPMG in order to present “a strong narrative” in terms of the data centre industry in the State.

The changes made to that report included updates in terms of how concerns in the community over the amount of power and water used by the centres should be dealt with by the Government, while the report itself claimed that centres had added €100bn in value and 875,000 jobs to the Irish economy.

However, the newly-released academic report argues the claims made in the KPMG report of outsize economic activity being delivered by data centres “do not hold up to any scrutiny”.

It claims the Government’s report used “spurious methodology” in ascribing the economic activity of “30 huge private enterprises” to data centres, given the economic impacts “are themselves unverifiable given the nature of cloud computing”.

The report states: “Instead of a credible analysis of direct and real economic activity that may be linked to data centres, the Government has sought to create a myth of ‘domestic dependency’ of huge sections of pre-existing economic activity in Ireland to hyperscale data centres."