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If you’re looking for a shining example of how the right policy can converge with rising opportunity for unprecedented success, look no further than Indiana’s 2019 decision to incentivize the creation of a data center industry.
Indiana has always been known as a business-friendly state with strong research universities, low taxes, development-friendly labor and accessible government officials at the state, county and local levels. We are the envy of economic development professionals throughout the country and other municipalities who try to replicate our success.
In 2019, we delivered national leadership on data center legislation, and today we are at the forefront of the data center expansion boom. The largest companies in the world are paying attention to Indiana’s leadership on data center expansion, and they are starting to come to Indiana.
Since then, no fewer than a dozen states have followed suit and changed their data center incentives, many of whom have modeled their bills after Indiana’s law. Now, thanks to this success, Indiana is uniquely positioned to make the data center industry better.
Not all data centers are created equal, and Indiana can be the driver of serious change.
Critics of data-center-focused economic development quickly recite statistics about land use, the outsized consumption of energy and the lack of jobs relative to the incentives given to the developer. This is shortsighted.
After all, Indiana’s status as “The Crossroads of America” is really just an expression of our superior infrastructure and ability to get people and things anywhere across the country and world. This is the exact reason we named this first Indiana data center the “Digital Crossroads of America.”
The future of data centers is not isolated, stand-alone structures in remote corners of obscure places. The days of imposing fences with few cars and even fewer people should be over. The incentives that have been given to these buildings were very important to put Indiana on the digital data center map, but the industry has moved on.
Industry leaders have recognized the anomaly of taking local incentives and then isolating themselves. Justifying the consumption of electricity without being materially involved in the safe and clean production of it is not a safe business model in 2024 and beyond. Letting others worry about workforce training has become universally understood to be shortsighted and self-absorbed.
The industry recognized it needs to change, and Indiana is helping it implement these steps.
The largest companies in the world are trying to be better members of local communities. Future data centers must be a part of interactive, multi-dimensional campuses in relatively close proximity to developing urban areas and aligned with an institution of higher education.
Finding spaces and resources that promote research and the commercialization of brilliant ideas developed by on-site scientists and researchers is the future. Fertile agricultural land replaced by data storage facilities will no longer be the norm.
Investors are sensitive to these criticisms, so many are doing their part. Pricing both debt and equity solely based upon return is no longer the standard. Money is paying attention to these issues, and the largest data center investors are pricing their involvement accordingly.
You will see the new brand of Indiana data center being much more interactive, socially conscious, safe and more involved in the community. There will be more jobs and better use of resources.
Once again, Indiana leads the way.•
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Dakich is CEO of Quantum Corridor, an optical network technology company that connects public and private enterprises.
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