Are AI Growth Zones the UK’s path out of economic stagnation?

Amidst a struggling economy, it is hoped that Britain’s new AI Growth Zones will deliver a badly needed fiscal boost. Predictions suggest these zones will attract up to £100 billion of investment and create more than 10,000 jobs. Outlined in the AI opportunities action plan, targets are ambitious, expanding the UK’s compute capacity by at least 20-fold by 2030. It is not a simple fix however, and for these schemes to be a success, we must have the grid resilience, build ability and workforce readiness to deliver. 

Breaking down the barriers
Apart from ensuring that the power network and labour market is ready, one of the biggest historic stumbling blocks has been planning issues, something that is being addressed by this government. Since coming into power, they have made a concerted effort to reduce planning barriers, including looking at how to fast-track the development of large-scale infrastructure developments, while taking a national rather than local view to approval. 

Despite opposition from some locals living in AI Growth Zone areas, the benefits are considerable and concerns largely unfounded. Accelerated economic growth, job creation and better public services are the gains, and we can see from examples around the world what happens when you become a ‘data centre hub’. 

In Northern Virginia’s Louden County, which hosts the world’s largest concentration of data centres, the area went from rural and low-income, to one of the wealthiest regions in the US. Its data centres now deliver $890 million annually in tax revenue, some of which goes toward improving the locality, funding schools, roads and other essentials, as well as tax breaks. In this one county, data centre companies pay as much as US$6 million per acre (20 million pounds sterling per hectare) for suitable land.

Some of the AI Growth Zones identified in the UK share similarities – they’re often ‘de-industrialised’ with limited economic prospects. In North Wales, for example, data centre development and pioneering modular nuclear technology at Wylfa, Anglesey, will create thousands of jobs and billions of pounds of infrastructure investment, providing a much-needed boost to the Welsh economy.

Power and water are of course concerns, but with proper planning, enhanced renewable and low carbon electricity production, and new cooling processes which do not need to draw from local supply, these concerns are increasingly unfounded. 

Contrary to popular belief, the digital revolution largely supports Net Zero too. Where AI is used effectively – making searches more efficient, automating systems from transportation and logistics to manufacturing and customer service, while creating a new class of high-end skilled service employment – a downward trend in emissions levels will follow. Globally, according to International Energy Association (IEA), data centres are responsible for just over 1% of global electricity demand and 0.5% of CO2 emissions. Even as data centres expand, the IEA suggests that given the low starting point, they will make a relatively small contribution to climate change. 

Don’t stand in the way of the digital revolution
Done properly with a moral compass embedded at its core, today’s events should be viewed as another Industrial Revolution. Each nation must do their best to leverage technology to the betterment of their economies and people. Those that lead the charge, will come out on top, with the power to influence trade, data governance and digital alliances. ‘Sovereignty’ in this context is no longer defined by borders, but by data control, computing capacity and digital ecosystems. Lack of digital sovereignty is the biggest risk nations will be facing in the coming decades. The government must remember that it is both the customer and owner of AI data centre development. Recent news about the UK government and Google’s agreement to reform and modernise outdates systems, including NHS systems, is an understandable worry for many. Should critical computing systems like this be in the hands of a company headquartered in a foreign nation? Either way, the government should be careful not to let outside control get out of hand. 

Developing AI data centres is a key solution to a thriving economy. Though the nation has a long way to go, the UK government’s AI action plan is perhaps its starting point in the global AI race – as it seeks to seize and act swiftly on the countless opportunities the digital revolution promises.