18.05.2017
Finland’s data center industry to expand rapidly in the future

Finland has several strategic advantages for fostering a robust data center industry, according to Copenhagen Economics.

Finland’s data center industry has the potential to expand more than three-fold in the years to come, concludes a report by Copenhagen Economics.

 

The industry is currently estimated to support 11,200 jobs and contribute €800 million a year to the country’s gross domestic product, but according to the report it has the potential to support as many as 32,900 jobs and contribute €2.3 billion a year to the national output by 2025.

 

Copenhagen Economics believes the growth can be accelerated even further.

 

Finland, it says, has an opportunity to create an additional 6,100 jobs and add €400 million to the gross domestic product by promoting closer co-operation between new data centers and local suppliers, thereby limiting the amount of imports used in building and operating the facilities.

 

The report acknowledges that the country has a number of strategic advantages for fostering a robust data center industry: a separate strategy to attract data center investments from abroad, excellent international data connections, a stable and advanced regulatory environment, an extremely reliable energy supply, and a suitable climate.

 

While such assets contribute to the country’s ability to fulfil the growth potential, there is also room for improvement, according to Copenhagen Economics.

 

Lower energy prices, more renewable energy

 

The report duly sets forth 14 policy recommendations for Finland. The recommendations have been designed to enable the country to take full advantage of the ripple effects and maximise the growth and employment impact of its burgeoning data center industry.

 

The industry is projected to create economic benefits by promoting digitisation, such as the adoption of cloud computing and other emerging technologies, across the value chain.

 

Finland is encouraged, for example, to take action to reduce energy costs and increase the share of renewable energy of the total energy supply further.

Industry has the potential to expand more than three-fold in the years to come.

Copenhagen Economics points out that data centers strive to ensure the energy they use is not only affordable but also clean. Google, it highlights, relies predominantly on green energy produced in Sweden to power its data center in Hamina, Southern Finland.

 

Alpo Akujärvi, the head of the data center industry at Finpro’s Invest in Finland, reminds that all of the electricity is bought from the common Nordic and Baltic electricity wholesale market, the Nord Pool Spot.

 

“Nord Pool’s prices are very affordable when compared to the rest of Europe. In addition, renewable electricity makes up a large share of the market,” he says.

 

Finland offers data centers an opportunity to trim their already low energy costs even further, adds Akujärvi. “Data centers are able create savings by selling the heat generated by their server units to local energy companies – an opportunity that has already been seized by the likes of Ericsson and Yandex.”

 

Copenhagen Economics also proposes that the country prepare sites for multiple data centers in order to allow the facilities to collaboratively feed thermal energy to the local district heating network.

 

“Economies of density imply that the co-ordinated, proximity siting of multiple data centers provides the best chances that the heat from these facilities can be harvested so that it can be conveyed to power a local community,” it argues.

 

Suppliers should seek export opportunities

 

Finland is encouraged to study how companies in specific sectors are able to improve their competitiveness by taking advantage of low-latency data connections and to determine why the country’s data centers rely less on local suppliers than those elsewhere in Europe.

 

Local suppliers, the report states, should also be encouraged to explore export opportunities and develop the competences required to serve domestic, export-oriented manufacturing industries.

 

The report was commissioned by Google and drafted in close collaboration with the Prime Minister’s Office and the Ministry of Employment and the Economy.

 

Sources:

 

https://www.copenhageneconomics.com/dyn/resources/Publication/publicationPDF/5/395/1492669001/copenhagen-economics-2017-finlands-economic-opportunities-from-data-centre-investments.pdf