(The Center Square) – A large data center campus could generate billions of dollars in economic activity and support thousands of jobs in northwest Indiana over the next two decades, according to a new study.
The study was authored by Justin Ross, a professor of public finance and economics at Indiana University Bloomington, and Saurav Roychoudhury, a professor of finance and economics at Capital University. The authors modeled the economic effects of a hypothetical hyperscale data center similar in size to projects that Microsoft has announced in LaPorte and other companies have proposed in the region.
The researchers estimated that a 1-gigawatt data center campus would generate about $16.1 billion in regional economic output over 20 years. They also projected the project would support 14,651 construction job-years over a three-year construction period and create $1.08 billion in construction earnings.
Once the facility begins operating, the study estimated it would support about 2,090 jobs across the regional economy and generate about $176 million in annual worker earnings.
The authors also looked at a larger 1.5-gigawatt campus. They estimated that such a project would produce about $24.2 billion in regional economic output over 20 years and support 21,979 construction job-years.
“The scale of impact here is significant for Northwest Indiana,” Ross said in a statement. “We apply standard input-output modeling carefully with conservative assumptions at every step, and find a single hyperscale campus generates billions in regional output and thousands of jobs. This is the kind of sustained economic activity that can meaningfully strengthen a regional economy over the long term.”
The study focused on a seven-county region that includes Lake, Porter, LaPorte, Jasper, Newton, Pulaski, and Starke counties. The authors said they used the U.S. Bureau of Economic Analysis’ Regional Input-Output Modeling System, known as RIMS II, to estimate the direct and indirect economic effects of the projects. They said they used conservative assumptions that excluded much of the spending on imported equipment and accounted for labor and supply chain activity that would happen outside of the region.
The report says that economic impact studies measure economic activity tied to a project but not its overall costs or benefits. The authors also said their analysis does not estimate possible impacts on electricity prices or housing markets.
