The Asia-Pacific region is experiencing a surge in data centre development, driven by rising demand for generative AI and cloud computing. Currently ranked second globally in data centre capacity behind North America, APAC is projected to nearly double its infrastructure to 57 GW by 2030. This expansion is attracting substantial investment—estimated to push spending on internet and cloud services close to US$300 billion by 2035—into large-scale facilities, power grids, and high-speed connectivity networks, forming the digital foundation of regional economies.
However, rapid growth presents environmental challenges. Much of the region still relies heavily on fossil fuels for electricity, and several areas face significant water stress. The cooling requirements of data centres can exacerbate local resource pressures, particularly in hot and densely populated urban zones where land and energy constraints are already tight. As a result, operators and governments face the dual challenge of scaling up computing power while reducing energy intensity and water consumption.
Beyond infrastructure, data centres generate broader economic benefits. During construction and operation, they stimulate demand across sectors such as construction, logistics, and professional services, creating ripple effects through household incomes and local businesses. More importantly, their economic value lies in catalytic impacts: first, through agglomeration, where reliable, low-latency connectivity draws tech firms and service providers into clusters, boosting productivity and lowering operational costs, especially for smaller enterprises; and second, through workforce development, as partnerships with training institutions expand technical talent pools and improve safety standards across supply chains.
Despite criticism over limited direct employment, the true impact of data centres extends far beyond headcount. Their role in enhancing digital resilience, supporting national data sovereignty, and enabling future-ready infrastructure contributes to long-term GDP growth, fiscal strength, and improved public services. Quantitative models from Oxford Economics help translate these diffuse benefits into measurable outcomes—such as GVA, tax revenue, and job creation—for stakeholders and regulators. Forward-looking analyses also assess scenarios involving AI-driven energy demand, carbon trajectories, and policy changes, enabling informed decision-making for sustainable growth.
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Powering Growth: How Data Centres Are Reshaping APAC Economies
Asia is in the middle of a data centre gold rush. China, India, and other markets are racing to realise the benefits of Generative AI, with new models that demand massive compute and energy. Today, Asia sits second in global data centre market share, behind North America, and the growth in capacity is set to expand by double digits over the next few years. This momentum is drawing billions in capital expenditure into hyperscale campuses, grid connections, and fibre routes, rapidly building the digital backbone of APAC’s economies. n nNavigating the trade-off between economic and environmental goals n nAccelerating investment is driving a rapid buildout of data centres. Oxford Economics projects that spending on internet and cloud services will nearly double to about US$300 billion by 2035 (Fig. 1). n nFigure 1: Nominal Spend on Internet & Cloud Services in APAC n nAsia Pacific is expected to nearly double its data centre capacity to 57 GW by 2030.1 Yet the region’s power mix remains dominated by fossil fuels, and some regions face acute water shortages, meaning the data centre expansion creates an energy and climate dilemma.2 n nMany economies in Central, South, and East Asia already face high water stress (Fig. 2), and additional demand from data‑centre cooling could intensify local pressures. Operating conditions compound the challenge: hot, humid climates raise cooling loads; land and water constraints are binding; and limited headroom to add renewables and grid capacity quickly heightens the risk. n nFigure 2: Degree of water stress across APAC n nIn dense urban hubs, data centres can account for a significant share of electricity demand and sectoral emissions. The mandate for governments and operators is clear: keep scaling top‑tier compute while materially reducing energy intensity and water use. n nPowering Growth: How Data Centres Are Reshaping APAC Economies n nDuring the construction phase and into operations, spending by data centre operators and their tenants supports jobs and wage-incomes across a wide ecosystem of builders, suppliers, transport, and professional services. This spending circulates through households and local businesses, leading to direct, indirect, and induced economic impacts that can be measurable at city, provincial, and national levels. n nThis footprint can be meaningful in localised areas, but does not do justice to the data centre’s main economic value proposition – the larger economic contributions from data centre investments are catalytic in nature. n nThe larger economic impacts from data centres arise through two principal channels: n nThe first is through agglomeration effects. Data centres concentrate low latency, highly reliable connectivity that attracts data intensive users and service providers and encourages clustering around key nodes. This lifts productivity by cutting delays and failures, supports compliance in regulated sectors, and reduces the cost of digital operations, especially for MSMEs with limited IT resources. Modern interconnection points further strengthen resilience through greater route diversity and faster recovery, resulting in fewer interruptions and more predictable operations as cloud adoption becomes easier for smaller organisations. n nThe second is through workforce and capability effects. While onsite headcount in data centres remains lean, operators and vendors expand the pool of technicians and operations staff, often in partnership with education and training institutions, and help formalise work and safety practices across the supply chain. n nFrom Narrative to Numbers: Turning Local Investments into National Gains n nSo often the headlines criticise the low employment headcount attached to data centre operations, but this misses their true contribution. Data centres have proven to anchor investment within a local economic area, whilst raising productivity and reliability across the economy, and attracting complementary capital in connectivity and power. n nDemonstrating the economic proposition of a data centre project requires a broader lens – with quantitative analysis of economy-wide impacts, not just direct employment and expenditure. Because these catalytic effects diffuse through supply chains and productivity channels, they are often overlooked in job-centric narratives about data centre impacts. Rigorous economic assessment can link local investments to improvements in both economic and non-economic national outcomes, from higher GDP, improved productivity, and a broader fiscal base to stronger data sovereignty, enhanced national security, and more resilient essential services. n nAt Oxford Economics, we help you surface and quantify those contributions, turning anecdotes into evidence. n nOur Economic Impact Consulting team builds defensible models that capture direct, indirect, and induced impacts, plus catalytic effects that are often missed, such as supplier development, skills formation, productivity gains, and infrastructure upgrades. We translate your operational data into board and regulator ready insights on jobs, GVA, incomes, and tax across construction and operations, at city, provincial, and national levels. We also run forward looking scenarios, including AI driven load growth, power and carbon forecast, and policy shifts, so you can credibly articulate both today’s impact and tomorrow’s trajectory. n nThe result is a clear country-level value story that strengthens stakeholder trust, informs site selection and incentives, and helps you scale with confidence.