Laying the groundwork of success: why the data centre sector needs a skills strategy to thrive post-Covid
During the Covid-19 outbreak demand for data has been at an all-time high, with internet usage up as much as 50% across some European markets. That rising demand is outpacing supply is nothing new, but the pandemic’s impact on the working and everyday lives of people all across the world has brought new pressures to the industry.
As we look beyond the lockdown and towards a likely recession, it is clear that the market leaders of tomorrow will need to act today to gain competitive advantage as the uncertainty and disruption from the virus starts to clear.
Agile decision making on geography, market opportunity and investment strategies will be critical to maximising opportunities. But within that, the sector needs to deal with a key pressure point – whether the depth and capacity of skilled resource exists to support the vast expansion necessary to meet unparalleled user demand.
Squeezed supply chains
It has been clear for some time that there is a desperate need for more consultants and contractors with relevant data centre experience. Only nine percent of respondents to Turner & Townsend’s annual Data Centre Cost Index survey believed that the data centre construction industry had met demand during 2019, and future expansion is reliant on a secure and constant supply of these skills.
Now, the Covid-19 crisis has served only to heighten the uncertainty and risk. Not only are there too few contractors, but many may also find themselves on the brink of insolvency and collapse regardless of the strength of opportunity within the data centre market itself.
Social distancing and quarantine regulations, as well as ongoing travel restrictions, have made supply chains vulnerable, with projects being delayed both by limits to the number of workers allowed on site and difficulties in importing the necessary materials. Productivity levels on site – already desperately low in construction as a whole, are set to plummet further. The unexpected changes to these pipelines have meant that many contractors find themselves under-staffed, and facing delays to projects that will have a knock on effect to several others.
While this is a problem for all industrial sectors, the ‘closed’ nature of the data centre construction industry leaves it particularly exposed, with clients often reluctant to contract anyone outside of a small pool of trusted players. Fierce competition for the right talent then risks leading to an increase in capital construction costs.
Investing in regional expertise
But it’s not all doom and gloom: this crisis presents the industry with a prime opportunity to tackle these systemic supply chain problems and reap the rewards for decades to come.
The first priority needs to be building regional capacity. The sector’s ‘closed’ nature is especially felt when data centre development requires technical expertise alongside local knowledge of the investment and contracting market. Travel restrictions mean that getting expertise parachuted in at short notice from abroad is now less reliable – and these inefficiencies are unlikely to disappear any time soon. Fresh talent is needed at a local level, especially as multinationals’ flows of capital and investments (not so easily stopped at a ticket gate) continue to flood into Europe.
In recent years, Europe has seen a marked increase in US investment to host the ‘big three’ tech platforms. This, in turn, continues to drive expansion in secondary markets such as Zurich, Munich and Berlin – not to mention the continued success of the established FLAP markets (Frankfurt, London, Amsterdam and Paris).
Meeting this demand will take the cultivation of a more localised European skill base that is currently in dire need of new talent – and a global programme of engagement and investment.
Starting in schools
While the pressure on skills is immediate, longer-term investment in schools is key to securing the next generation of expertise. Young students need to be inspired to pursue STEM subjects, and the variety of exciting careers and roles available in the sector. Both the construction industry and the data centre sector have a role to play in engaging students at an early age and raising awareness of the opportunities out there – by running workshops in schools, mentoring, partnering with colleges, or sponsoring relevant competitions. Like many sectors, the data centre industry needs to work hard to broaden its appeal to a wide breadth of talents, in particular tackling poor representation when it comes to gender balance and ethnic diversity.
The drivers of growth
The data centre industry has a set of responsibilities to fulfil. It is at the core of an ongoing digital revolution that Covid-19 has pushed into overdrive. Digital is the new personal, friendships hang on internet connections, and data centres now find themselves with a pivotal role in the economic recovery ahead.
Data centres are critical infrastructure – and like the frontier banks of the old wild west, economic and societal development will hang on their continued success and growth. To thrive and capitalise on the opportunities of a post-pandemic world, the industry must build up new regional supply chains, invest in STEM education, and widen the pool of expertise – only by doing this can data centres be the drivers of growth we all need.