Analysis shows UK data centers will create just 25% of jobs forecast in tech sector

Data centers in the UK will create only a quarter of the jobs predicted in the technology sector, while consuming huge amounts of energy, according to new research.

Environmental think tank Verdant predicts that all currently planned data centers are likely to directly employ 10,400 people – compared with more than 40,000 predicted by industry lobby group TechUK.

Labor has defended the rapid rollout of artificial intelligence data centers in the face of growing public skepticism amid concerns about their demand for water and energy. The government has also backed TechUK’s job creation claims.

Verdant’s analysis is based on 20 projects for which staffing level data is publicly available, including through planning applications, company reports and press releases, and international comparisons.

It said data centers already built directly created fewer than 4,400 jobs – around 8.6 jobs for every megawatt of energy they consumed, versus 43.7 jobs claimed in TechUK’s forecasts.

Verdant also argues that many of the future projects currently in the planning stages are on a much larger scale and therefore likely to be much less labor intensive—perhaps creating as little as 1.6 permanent jobs per megawatt.

His analysis focuses on the permanent workers needed to maintain and operate data centers, leaving aside the much larger number of temporary construction jobs needed to build them.

James Midway, co-director of the think tank, said: “We are being rushed to maintain a breakneck pace of data center construction on very shaky economic grounds.

“It’s clear that artificial intelligence and related technologies have great potential. But huge new data centers come at a significant real cost to local communities and even to our climate ambitions, and their use case needs to be developed by government and industry – rather than assuming we can build first and then figure out why we did it later.”

To highlight the resource-intensive nature of huge data warehouses, Verdant compared the 8.6 jobs they currently create for every megawatt of energy they use with about 400 in a car factory and more than 3,600 in hospitals or healthcare facilities.

The government rejected the comparison and questioned Verdan’s methodology. A spokesman said: “This report is based on a deeply misleading metric of jobs per megawatt, contains spurious comparisons to hospitals and schools, and appears to confuse electricity capacity with actual consumption. “Seriously, it does not take into account the broader economic value of computing. [computing capacity] and the national security and sovereignty case for building critical digital infrastructure in the UK.”

Verdant said it based its calculations on the electricity capacity that tech companies say they need, which could still displace alternative plans even if completed data centers don’t end up using all the power.

Labor has classified artificial intelligence data centers as critical national infrastructure in a bid to speed up the planning process, and Andy Burnham has underlined his support for the sector by appointing AI minister Kanishka Narayan to his cabinet.

Narayan advocates a rapid expansion of data centers, partly for reasons of national sovereignty. He told the Times last month: “The British public is very clear that they want strong defence. They want strong, sovereign capabilities, not just foreign billionaires owning the things that matter to our lives. If we are true to these British values, there is no way we can achieve this without building a sovereign level of data center capacity in this country.”

In contrast, the Green Party in England called for a moratorium on data center construction, while protests took place in Scotland amid claims that large-scale projects were being rushed through.

Zac Polanski, the party’s leader in England, said: “The government plans to crush local opposition so private companies can build data centers – but it can’t explain what the benefits are.

“England and Wales are still facing drought after their hottest summer on record, but these data centers will be given priority access to water. Meanwhile, this latest research suggests that building and staffing them could actually create far fewer jobs than the government claims.”

In response to the Green Party’s call for a “pause”, a government spokesman insisted it would “simply send investment and good jobs overseas, while leaving Britain dependent on overseas computers to handle sensitive health and defense data.”

A TechUK spokesman said: “Our estimates that the UK data center industry supports 43,500 jobs and could support a further 40,000 by 2035 are based on published methodology using industry data and standard economic impact assessment methods. The figures were constructed transparently from the best available industry data at the time and we are confident they remain a reasonable estimate of the sector’s contribution to employment.”