A comprehensive study by the Virginia Joint Legislative Audit and Review Commission (JLARC) provides one of the most detailed examinations to date of the economic impact of data center development on a state economy. The findings confirm that data centers are a significant engine of employment, tax revenue, and economic activity in Virginia — the largest data center market in the world.
The report found that data centers support nearly 74,000 jobs annually when construction activity, direct operations, and supply-chain ripple effects are included. The industry generates approximately $9.1 billion in annual economic contribution to Virginia's GDP and $5.5 billion in labor income to Virginia's economy annually.
Employment Impact
The JLARC report breaks down employment into several categories. Direct data center operations support thousands of permanent technology and facilities positions, while construction activity generates thousands of additional jobs during buildout phases. The report also quantifies indirect and induced employment — jobs created when data center employees and contractors spend their wages in the local economy, and when suppliers expand to meet industry demand.
The construction phase of data center development is particularly employment-intensive. The report found that construction workers earn 20.4% more, on average, than private-sector workers overall, reflecting the specialized skills required for data center construction.
Tax Revenue and Public Services
The report documents significant tax revenue contributions from data center development. In Virginia, data centers are a major source of local property tax revenue, supporting school districts, public safety, and other local government services. Several Virginia counties have used data center tax revenue to fund school construction, infrastructure improvements, and other community investments.
The tax revenue impact varies significantly by jurisdiction and depends on local tax structures, incentive arrangements, and the scale of development. The report notes that communities that negotiate effectively can secure substantial long-term revenue streams while those that offer excessive incentives may see reduced fiscal benefits.
Lessons for Other States
Virginia's experience offers important lessons for other states experiencing data center growth. The JLARC report demonstrates that well-structured data center development can generate significant, measurable economic benefits — but also that those benefits depend on thoughtful policy, effective negotiation, and responsible development practices.
ADIC highlights the Virginia report as evidence that data center development, when done responsibly, can be a powerful engine of economic growth. The organization encourages other states to conduct similar analyses to understand the full economic picture of digital infrastructure development in their communities.
