Data sovereignty is now one of the top concerns of those making data centre buying decisions. The principle that data is subject to the laws of the country where it is collected or stored, has been enshrined in two discrete, but connected pieces of legislation: The Data Protection Act 2018 (DPA 2018). Whilst both these statutes enforce sovereignty as a minimum, they also cover the use of personal data, including how it is collected, stored, and processed.

As January 2025 draws to a close, the challenges of 2024 still resonate. Last year was exceptionally turbulent for both businesses and individuals, driven in large part by geopolitical tensions, the cost-of-living crisis, and widespread economic uncertainty. According to November ONS figures, 57% of businesses reported experiencing turnover challenges, with 23% citing economic uncertainty as the primary cause.

The Foundations of the Future report commissioned by techUK, and developed by Henham Strategy, makes for incredible reading. As a sector, the UK data centre industry is worth £4.7 billion in Gross Value Added (GVA) annually, supporting 43,500 jobs and contributing £640 million in revenue to the exchequer. When you consider that this has happened in less than 35 years, this is remarkable.

Whilst ‘manifest’ bagged the Word of the Year for 2024, the industry could be forgiven for holding out hope that ‘data centre’ might make it for 2025. Following Rachel Reeves’ first speech as Chancellor that held up data centre development as an example of political commitment to economic growth, there has been wave after wave of investment stories, and most-recently an analysis of the potential £44bn that the sector could yield.

Organisations across the globe have shifted to specialist data centres facilities to look after their computing power. But by externalising the work, there is a risk of promoting a mirage that the environmental impact of digital technologies is immaterial. We must be clear; these technologies require valuable physical and energy resources. Collaboration and transparency is needed to manage their effective deployment.

Mike Hoy, CTO, Pulsant looks ahead to the next 12 months, identifying some of the challenges organisations are likely to face in delivering AI projects, and highlighting the importance of a resilient, connected infrastructure in meeting these. As AI proofs of concept evolve over the next 12–18 months, they will lay the groundwork for advances in technology.

The Foundations of the Future report recently commissioned by techUK, and developed by Henham Strategy, raises many points for consideration. It is an important attempt at quantifying the UK’s data centre assets. As a sector, the UK data centre industry is worth £4.7 billion in Gross Value Added (GVA) annually, supporting 43,500 jobs and contributing £640 million in tax revenue to the exchequer.

Economically speaking, scale-ups deliver far greater value than their size suggests. Whilst they make up just 1% of SME firms, the ‘sub-sector’ accounts for 8% of SME employment and 22% of SME turnover. Nearly 1 million people are employed in scale-up companies and these businesses have a combined turnover of almost £500 billion. Scotland has just over 2,100 scale-ups, with a pipeline of another 1,000. The current turnover of these organisations totals just over £41bn.

Scotland has a strong historical record in seeking out and supporting data centre investment. The Green Datacentres and Digital Connectivity: Vision and Action plan is already four years old. However, time has not dampened enthusiasm. The renewed interest in data centre investment that has followed encouraging comments from Chancellor of the Exchequer, Rachel Reeves, has spread across the UK.

In an era where modern commerce is inseparable from technology, digital transformation has become crucial for businesses to survive and thrive in all markets. Scotland has led the way in understanding the impact of this shift. In August 2023, the Independent Expert Group (IEG) on Unlocking the Value of Data delivered its report to the Digital Directorate, covering private sector use of public sector personal data.