In an op-ed on PennLive.com and in The Harrisburg Patriot-News Pennsylvania State Senator John Yudichak shared some salient points about the importance of the technology industry in Pennsylvania and the need for more data center infrastructure.  He is 100% correct when he talks about the technology revolution “occurring in every professional field including: health care, life sciences, finance, manufacturing and nearly every facet of our daily lives.”

Senator Yudichak points out that Pennsylvania ended up with none of the $60 billion spent on enterprise data centers in the US in 2019. This is troubling. Our state has the sixth-largest state economy in the nation and as we all know, the digital sector is the fastest-growing portion of economic activity overall. In fact, a Harvard Business School study released in October found that the internet economy grew seven times faster than the overall US economy over the past four years. 

Data centers are essential infrastructure, just as much as roads or ports. They support good-paying jobs and economic development. Job growth spurred by data center development is a real thing that we experience regularly here at Direct LTx. Our customer Contour Data Services recently added a dozen jobs in their new enterprise operations center serving their technology customers housed in Direct LTx’s data center in Reading.

Pennsylvania needs to get a bigger piece of the pie, and Senator Yudichak’s continuing support of data center development and his understanding of its importance to economic growth and employment is welcome, as was the bipartisan tax-incentive legislation he championed this summer to encourage new data center activity.

But his comparison of data center industry investment in Virginia vs. that in Pennsylvania will always be an uphill climb for the Keystone State. The federal government’s development of fiber optic networks in the Washington DC area spurred the development of a telecom ecosystem in Ashburn and surrounding communities. When AOL was one of the first large commercial internet service providers they built data centers in the area and understandably, others followed.  In 2009, Virginia aided this influx by offering targeted tax breaks for data center development, incentives that proved so effective they were extended to 2035. These factors favor Virginia being the leading data center state for years to come.

One opportunity Pennsylvania can leverage is filling the need for disaster recovery and business continuity data center deployments. Pennsylvania is a sensible distance away from Virginia’s “Data Center Alley” for redundant backup systems enabling continued uptime during a regional emergency interrupting delivery of power or web traffic. Direct LTx is discussing such opportunities with firms with Virginia data centers.

While Pennsylvania is unlikely to match Virginia in data center infrastructure, it doesn’t mean that the Commonwealth can’t become a more significant player with both colocation and hyperscale cloud data centers, and benefit from the job growth that follows. Senator Yudichak’s support of the industry is welcome and the new legislation should foster economic growth.