Conference Agenda

Data centers have become a focal point of economic development policy in rural communities across the United States, with local and state governments offering substantial tax incentives and other inducements to attract this rapidly expanding industry. Proponents argue that data centers generate significant employment and community benefits, making them attractive anchors for rural economic revitalization (CBRE, 2024). However, as data centers emerge as essential infrastructure for artificial intelligence and cloud computing, a critical question arises: does this form of information infrastructure investment actually produce meaningful public benefits, particularly in the rural communities that host it?

This paper presents findings from a narrative review (Sukhera, 2022) of 212 documents, including academic articles, white papers, industry reports, grey literature, and industry publications, of which 38 addressed economic impacts and informed our analysis. Drawing on infrastructure studies and community and economic development frameworks, we ask: what are the economic impacts of data centers in rural U.S. communities? We examine two sub-questions: (1) what are the real and perceived impacts on job creation, and (2) what types of community benefits do data center developments actually produce?

Our review finds a significant gap between the economic promises used to attract data centers and the evidence of realized benefits. Construction employment is counted as a direct economic impact in studies, but it is temporary. Further, given thin labor markets for specialized trades in rural regions, we would expect this labor to often be sourced from non-local labor markets (e.g., nearby urban areas). Permanent operational jobs are few, well-compensated, and require highly technical skills unlikely to exist in rural labor markets, raising questions about whether these positions could be filled locally (Mullin, 2023; Mayer, 2023). Advertised indirect and induced employment multipliers, which are frequently derived from industry-commissioned economic impact assessments using input-output models (Hicks, 2025), appear substantially overstated relative to reported outcomes from other sources (Bueno Sousa, 2012). The only empirical causal study we identified, using Texas data, found no statistically significant link between data center development and state level job growth (Hicks, 2025).

On the community benefits side, observed meaningful gains are largely limited to local tax revenue capture and modest induced and indirect spending effects. However, even these are significantly diminished when states deploy tax abatement and sales tax exemption strategies as attraction mechanisms, a very common feature of policy for attracting data centers. Other commonly cited benefits, including reputational effects, local corporate philanthropy, and the prospect of technology sector spillovers, currently lack systematic evidence and appear to reflect aspiration more than documented impact. Community benefits agreements (CBAs) are perceived as potential opportunity for real, sustained gains for local communities where data centers are sited. Though the impacts of CBAs are yet to be determined.

In additional to regional development and planning policy, these findings carry direct implications for communications and information policy. The current data center boom is explicitly tied to surging demand for AI compute capacity, and federal and state governments have treated data center attraction as a de facto AI infrastructure strategy. Yet our review suggests the public interest justification for this approach, particularly in rural contexts, currently rests on weak empirical ground. Rural communities are increasingly positioned as hosts of critical digital infrastructure while capturing limited economic returns. This dynamic represents an undertheorized form of geographic digital inequality: unlike traditional framings of the rural digital divide, in which rural areas lack access to technology, this is a configuration in which rural areas bear the costs of infrastructure provision (i.e., land, water, energy load, local governance capacity) while economic and technological benefits flow primarily to urban centers and corporate shareholders. There is clear potential for policy intervention that changes this balance and creates benefits locally and regionally for rural communities.

We conclude by calling for stronger evidence standards in data center incentive programs and for communications and information policy frameworks that more explicitly account for the unequal geographic distribution of costs and benefits in AI infrastructure development (e.g., through policy mechanisms such as fiscal equalization). As policymakers continue to expand investment in data center infrastructure under the banner of national AI competitiveness, this paper argues that the field urgently needs more rigorous, place-based empirical research and that rural communities deserve policy mechanisms that ensure infrastructure hosting translates into genuine local benefit.