Understanding the economic impact of hyperscale data centers in Northwest Indiana

As demand for cloud computing, artificial intelligence (AI), and digital services grows, communities across the United States are attracting increasing interest from hyperscale data center developers. This policy brief summarizes research by Saurav Roychoudhury of Capital University and Justin M. Ross of Indiana University's O'Neill School examining the potential economic impacts of a hypothetical hyperscale data center campus in Northwest Indiana.

Using the U.S. Bureau of Economic Analysis Regional Input-Output Modeling System (RIMS II), researchers estimated the employment, earnings, and economic output associated with constructing and operating data centers ranging from 0.5 to 1.5 gigawatts in size. The study examines how construction, utilities, maintenance, supplier purchases, and other business-to-business spending would generate economic activity.

The findings highlight the substantial economic activity that data centers can generate while also demonstrating that economic impacts differ from broader measures of community benefit. The brief offers insights for policymakers, utility providers, economic development practitioners, and local governments evaluating large-scale data center proposals.

Key findings

  • A hypothetical 1-gigawatt (GW) hyperscale data center campus could generate $5.45 billion in construction-phase output and support nearly 14,700 construction job-years (One job-year equals one full-time job for one year).
  • Ongoing operations could support $691 million in annual regional output and approximately 2,090 jobs.
  • Construction, utilities, maintenance, and related services generate most local economic benefits, since much data center equipment is manufactured outside the region.
  • Data centers support broader employment through suppliers, contractors, utilities, and telecommunications firms, even though permanent on-site staffing remains relatively modest.
  • Project size is the primary driver of economic impacts, while assumptions about staffing and worker commuting play a smaller role.
  • Economic impacts are only one component of project evaluation. Economic impact estimates measure economic activity rather than overall community benefit and should be weighed alongside infrastructure, energy, housing, workforce, and environmental considerations.