Data Center Boom Offers Long-Term Gains for Local Communities

Brookings report highlights how cities and towns can leverage data center projects to drive lasting economic benefits.

Published on Feb. 12, 2026

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A new Brookings Institution report examines how local communities across the U.S. can take advantage of the rapid growth in data centers to secure long-term economic gains, rather than just short-term construction jobs. The report notes that the artificial intelligence race has given states, counties, and cities more leverage to negotiate better deals with tech giants seeking land, electricity, and water for their massive data center projects. Researchers say communities should view these deals as 'ecosystem-shaping' opportunities to anchor additional local investments, rather than just isolated real estate transactions.

Why it matters

As the data center industry continues to expand rapidly, this report provides a roadmap for how local governments can maximize the long-term benefits of hosting these large-scale projects. By taking a strategic, collaborative approach, communities can leverage data centers to drive broader economic development and workforce training initiatives, rather than just seeing a temporary construction boom followed by a handful of ongoing operational jobs.

The details

The report highlights examples like Microsoft's data center project in Mount Pleasant, Wisconsin, which is accompanied by investments in the state's broader tech ecosystem, including partnerships with local universities. The researchers also note that some states, like New Jersey, are offering tax incentives that must be reinvested into the local 'innovation economy.' The report encourages communities to think creatively about how they can take advantage of the energy and infrastructure needed for data centers to benefit a wider range of co-located entities, not just the data center itself.

  • The U.S. already has nearly 3,000 new data centers, with growth projected at 20-25% per year through 2030.
  • The Brookings report was published on February 12, 2026.

The players

Brookings Institution

A nonprofit public policy organization based in Washington, D.C. that conducts research and provides recommendations on a variety of economic and social issues.

Mark Muro

A senior fellow at Brookings Metro who researches AI and the digital economy.

Ben Goetzel

A technology strategy consultant and former program lead for the National Science Foundation's Regional Innovation Engines.

Microsoft

A multinational technology company that has launched a data center project in Mount Pleasant, Wisconsin, accompanied by investments in the state's broader tech ecosystem.

University of Wisconsin-Madison

A public research university that has partnered with Microsoft to accelerate scientific discovery via AI.

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What they’re saying

“It's not just a fear of missing out for small and medium-sized communities. The firms themselves are urgent about cutting these deals as fast as they can.”

— Mark Muro, Senior Fellow, Brookings Metro (foxkansas.com)

“But now these projects are so massive ... it's almost impossible to ignore them in your backyard, in your community.”

— Ben Goetzel, Technology Strategy Consultant (foxkansas.com)

What’s next

The report encourages communities to be proactive in negotiating data center deals, viewing them as opportunities to shape their local innovation ecosystems rather than just isolated real estate transactions.

The takeaway

By taking a strategic, collaborative approach to data center projects, local communities can leverage these large-scale investments to drive broader economic development and workforce training initiatives, creating long-term benefits that extend far beyond the initial construction boom.