The Federal Ministry for Economic Affairs and Climate Action (BMWK) commissioned a comprehensive study to analyze the current status and development potential of Germany as a data center location. Within a consortium led by the German Energy Agency (dena), IDED (formerly known as SDIA) supported the creation of an overall analysis — focusing on the economic dimension and future outlook.

Challenge

Germany faces the task of aligning the growth of digital infrastructure with the goals of the energy transition while ensuring digital sovereignty. The Ministry required evidence-based insights on:

• The economic value chain of data centers

• Quantifiable employment and tax effects of data center investments

• The future demand for digital resources up to 2045

• Strategic options to strengthen digital sovereignty

Our Approach

IDED took the lead in analyzing the economic dimension (Chapter 3) and the future outlook (Chapter 5):

Economic Analysis (Chapter 3): Development of a detailed value creation model across three levels — data center buildings, IT infrastructure, and IT services. Primary research through stakeholder interviews and surveys to quantify employment effects. Analysis of tax impacts and regional value creation of various data center business models. Investigation of market access barriers and competitive dynamics in the cloud infrastructure sector.

Future Outlook and Digital Sovereignty (Chapter 5): Development of a quantitative model to forecast the demand for digital resources up to 2045 based on digitalization trends across all economic sectors. Analysis of digital sovereignty along the entire value chain. Development of strategic recommendations for positioning Germany in the global digital infrastructure market.

Key Findings

Economic Impact and Value Chain

• Employment Effects: German data center operators create approximately 9 jobs per MW of data center operation, while international operators in Germany generate only about 3 jobs per MW.

• Value Chain: The value increases significantly along the chain: data center buildings (base level) 3–9 employees/MW, IT infrastructure operation (middle level) 3–25 employees/MW, IT services (highest level) 35–140 employees/MW.

• Tax Revenues: The tax structure varies greatly depending on the business model and company structure. Municipalities often benefit only to a limited extent despite providing land and energy infrastructure.

• Market Structure: The largest colocation providers in Germany are mainly foreign-based, and the cloud market is dominated by closed systems of international providers.

Future Outlook and Sovereignty

• Demand for Digital Resources: The model predicts that Germany will require digital resources equivalent to 19 million standard servers by 2045 to achieve an overall digitalization rate of 39%.

• Efficiency Scenarios: Several scenarios illustrate how improvements in software and IT infrastructure efficiency can significantly impact resource needs.

• Sovereignty Analysis: Development of a structured framework for assessing digital sovereignty along the dimensions of data sovereignty, operational sovereignty, and infrastructure sovereignty.

Recommendations

• Regional Digital Ecosystems: Establishment of integrated regional ecosystems that connect data centers, IT infrastructure providers, and IT service companies to maximize value creation and employment effects.

• European Marketplace for Digital Resources: Creation of an open European marketplace for digital resources to enhance competition and reduce dependencies on closed systems of global hyperscalers.

• Targeted Support for Local Operators: Improvement of capital access for small and medium-sized IT infrastructure providers to strengthen the German market segment.

• Strategic Investments in Skill Development: Establishment of specialized training programs for large-scale IT infrastructure operations to address identified skill gaps.

• Framework for Digital Sovereignty: Implementation of the developed assessment framework to guide decisions on critical digital infrastructure.