Silicon Valley and Seattle have long been tech hubs in the United States. But as tech continues to boom and spread, new centers are appearing in unexpected places throughout the American South and Midwest.
New Albany, Ohio, a small but growing city in the suburbs northeast of Columbus with a population of about 10,000, is one such place. Already home to data centers for American Electric Power (NYSE: AEP), Abercrombie & Fitch (NYSE: ANF), and Amazon (NASDAQ: AMZN), New Albany will now host a data center for Facebook (NASDAQ: FB), as per an announcement made by the company on Tuesday.
The data center, which will be New Albany's largest, will cover a sprawling 22 acres and cost $750 million to build. Facebook has already successfully completed the application process for $37 million in state tax incentives. The center, which will open in 2019, will help Facebook with its immense and ever-growing data storage needs for content generated by its 2 billion users. Facebook has nine other such data centers globally.
Facebook's Director of Data Center Strategy and Development, Rachel Peterson, explained that New Albany has much to offer, including infrastructure, government support, a low cost of living, and a workforce with technical skills. It is expected that the data center will generate 100 permanent jobs, and Facebook will hire local talent.
One of the most important factors contributing to Facebook's decision was the availability of renewable energy sources, including solar and hydroelectric power. Facebook has joined a global campaign encouraging businesses to operate with the smallest environmental footprint possible. As part of that goal, Facebook plans to reach 50% clean and renewable energy in its electricity supply for its data centers by 2018. Facebook has said that the new data center will run entirely on renewable energy.
Alternative energy sources have been controversial in Ohio, a state with heavy fossil fuel development. The Republican State Legislature and fossil fuel interests have made efforts to roll back recent renewable energy initiatives.
Ohio Republican Governor John Kasich has diverged somewhat from the party line to champion the development of alternative energy sources in the state, believing that tech job creators like Facebook and Amazon will not come to Ohio without a demonstrated commitment to sustainability. Gov. Kasich has cited the new data center as evidence that failure to invest in renewable energy sources could make Ohio less competitive with other states that do embrace sustainable options and harm the state's economy.
Kasich argues that a tech boom will likely prove beneficial to the state's overall economic health. Ohio's population growth has stagnated, and the workforce is aging. But tech jobs may encourage younger workers to stay in, or even move to, Ohio. The arrival of tech companies may also help Ohio diversify its economy, which traditionally has depended heavily on the manufacturing industry.
Other tech companies have taken note of the benefits Ohio can offer by opening data centers in recent years, including IBM (NYSE: IBM), Teradata (NYSE: TDC), and Amazon, which, in addition to its New Albany cloud-computing campus, also opened two other data centers in the Columbus suburbs of Dublin and Hilliard last year. The investments from Amazon alone in the state total about $1 billion. And the hunt for further tech investment in Ohio continues apace, with Gov. Kasich recently acknowledging efforts to persuade the electronics manufacturer FoxConn (TPE: 2354) to invest in the state.