Digital economy

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.
Table of Contents

Digitalization

The era of digitalization has shifted our economy towards a digital economy, and digital technologies have changed how organizations and their customers interact with each other. Electronic business processes include online purchasing, selling and production management, logistics, internal and external communication, and support services – so businesses are increasingly using more data to run their operational processes.

The digital economy is growing, causing a greater dependency on computer technologies and data processing. The world is connected through a sophisticated infrastructure of networks that deliver data with real-time connections. With more data being 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, and cloud and hosting businesses. As a result of this growing demand, the digital economy has created an entirely new digital supply chain consisting of data transportation, storage, and processing.

Data is processed and stored within data centers, ensuring the smooth running of the supply chain by providing continuity, keeping the digital economy going 24/7. Data centers also provide security to physical servers and data. The 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 ranks as the European leader in digital connectivity, making the Netherlands a vital connectivity hub, forming a digital gateway to the rest of Europe. This is one of the critical assets of the digital infrastructure.

Because of this, the Netherlands is an exciting data distribution node for global companies as it is an important 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 related to data centers, cloud, or online activities 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 Rotterdam–The Hague Metropolitan Region (2019) has shown that it could easily expand its data exchange infrastructure. Most data centers in the Netherlands are located in and around Amsterdam, which makes this region vulnerable regarding the degree of energy consumption, use of space, and the risk of power outages. Many companies now choose to store their data in data centers in different regions as a backup.

The city of Rotterdam closely works together with different companies and research institutions to actively promote the region, attract foreign companies and investors, and help them find suitable 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 an excellent connectivity node because the submarine cables for international internet traffic emerge in the port of Rotterdam.

National Data Center Day 2019

On 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. That’s why data centers 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 province of South Holland. Do you want to take a look behind the scenes at Smartdc? You can request a data center tour.
National Data Center Day 2019
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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