The role of data centers in the digital economy

Over the past decade, the force of digitalization has significantly changed our economy and society. Consequently, the world today is strongly dependent on digital services. Because of this digitalization, the role of data centers in the Netherlands will continue to grow.

Digitalization

The era of digitalization has shifted our economy towards a digital economy. A digital economy is an economy driven by computer technology. Digital technologies have changed the ways in which organizations and their customers interact with each other. Electronic business processes do not only include online purchasing and selling, but also production management, logistics, internal and external communication, and support services. This means businesses are increasingly using more data in order to run their operational processes.  

The digital economy will continue to grow, causing a greater dependency on computer technologies and data (processing). This means that people and organizations will increasingly use more data. The world is now connected through a sophisticated infrastructure of networks that is able to deliver data with real-time connections. When more data being is transferred, this also requires a solid online infrastructure to carry the workload.   

The role of data centers

The data demand of the digital economy is putting pressure on the existing IT-infrastructure. The digital infrastructure consists of data connections, internet exchanges, data centers, cloud and hosting businesses. As a result of this growing demand, the digital economy has created a completely new supply chain: the digital supply chain. This chain consists of data transportation, storage, and processing.  

Within data centers, data is processed and stored. Data centers ensure the smooth running of the supply chain by providing continuitykeeping the digital economy going, 24/7. Besides continuity, data centers also provide security to physical servers and dataThe data center sector has grown into an entire industry of great economic significance. Therefore, data centers are essential for the digital economy in this supply chain as they function as a distribution node. 

Connectivity hub

According to the Digital Economy and Society Index (DESI), the Netherlands is ranked as the European leader in digital connectivity. This makes the Netherlands an important connectivity hub, as it forms a digital gateway to the rest of Europe. This is one of the key assets of the digital infrastructure. Because of this, the Netherlands is an interesting data distribution node for global companies as it is a key location for their data centers, cloud applications or headquarters. Alaerds, Grove and Bilderbeek (2017) argue that nowadays nearly 20% of all foreign investments in the Netherlands are data center-, cloud- or online related, because of its role as a data hub. 

Connectivity in the Rotterdam region

As discussed in our previous article Digitalization and sustainability go hand in hand, research by Metropolitan Region Rotterdam The Hague (2019) has shown that the Rotterdam – The Hague region can positively develop in the field of data exchange infrastructure. Most data centers in the Netherlands are located in the Amsterdam region. This makes this region vulnerable with regards to the degree of energy consumption, use of space and the risk of power outages. Many companies set aside their data storage independently in data centers in different regions in order to have a “back-up.” 

The municipality of Rotterdam closely works together with different companies and research institutions in order to actively promote the region, attract foreign companies and investors and help them in finding the right locations and facilities for setting up their business in the region. Various companies have started lobbying to attract investors and international tech companies to the Rotterdam – The Hague region. In this region, there is still space and enough power to be able to build data centers. Rotterdam is also a great connectivity node because the submarine cables for international internet traffic emerge in the port of Rotterdam.  

National Data Center Day 2019

On the National Data Center Day, data centers throughout the Netherlands open their doors to the general public. Most people don’t even think about it, but everything that happens on the Internet is essentially based in a data center. Data centers, therefore, play a fundamental role in our society and digital economy.

During this open day, you can take a look behind the scenes of a data center.

Smartdc Rotterdam is the most modern data center in the South-Holland region. Do you want to take a look behind the scenes at Smartdc? You can register here.

References
Alaerds, R., Grove, S. & Bilderbeek, P., (2017). The Foundations of Our Digital Economy: Structure Study on the Infrastructure Behind Our Data Economy  
DESI, (2018). Report 2018 – Connectivity: Connectivity Broadband market developments in the EU 

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