Integrating data centers into energy and innovation ecosystems can drive sustainable growth - Finland shows how it can be done.
As our reliance on data grows and AI-driven technologies become indispensable, data centers are emerging as critical infrastructure for modern economies. Their expansion is an unavoidable reality – but the real opportunity lies in transforming them into strategic assets, shaping the future of energy, innovation and competitiveness.
A new government-commissioned report in Finland adds clarity to this discussion. Published amid the country´s ongoing efforts to harness technology for sustainable growth, the report offers insights into how Finland – and countries like it – can turn the data center boom into a strategic advantage.
The report highlights how data centers can strengthen both national and regional resilience when integrated into broader energy and innovative ecosystems. A separate report from the Confederation of Finnish Industries (EK) underscores the same point: the data center industry holds a multi-billion-euro growth potential and could become a cornerstone of Finland´s digital competitiveness.
Across the globe, governments and investors are starting to recognize that data centers are not just a cost of digitalization. They can be catalysts for innovation and the green transition. To capture this momentum, national and local decision-makers need to understand the broader energy ecosystems that surround data centers. When designed as part of a country´s infrastructure, data centers can boost productivity and spark innovation through the smart utilization of waste heat, strategic planning within utility networks, and the development of new services and products. Countries with cool climates – such as Finland, Sweden, Canada and parts of northern Japan – have a natural advantage in developing energy-efficient data centers. With the right incentives or mandates, these nations can recover and reuse waste heat through industrial heat pumps, supplying near-zero-emission warmth to homes and industries via district heating networks.
In Finland, this approach aligns seamlessly with national sustainability goals. With 95% of its electricity already fossil-free sources and a target of carbon neutrality by 2035, Finland is showing how new digital infrastructure can coexist with – and even accelerate - climate targets.
While some data centers can actively support grid stability through demand-side flexibility, all have the potential to contribute to energy storage and take part in the wider energy network via their existing backup power systems. This capability helps balance renewable production and transform electricity distribution, making it sensible for governments to explore local demand response, battery storage, and private networks to improve availability and optimize costs. This model could be scaled globally – especially in regions investing heavily in wind, solar, hydropower and hydrogen infrastructure – creating a symbiotic link between digital and energy transitions.
Beyond their core purpose, data centers are powerful enablers of innovation. Integrating them with energy and water systems opens doors for new technologies and cross-sector collaboration. In regions with strong local value chains, the right mix of tax incentives, zoning policies and public-private partnerships can ensure domestic companies play a central role in co-creating future solutions with global leaders - generating export and expertise.
In Finland, this ambition aligns with the government´s goal of increasing R&D spending to 4% of GDP by 2030. Data centers can contribute directly to that objective by breaking down silos between research disciplines and fostering collaboration between universities, energy companies and startups.
Earlier this year, data centers were still viewed with a degree of skepticism in Finland. Fortunately, that narrative is shifting and now, the message is clear: data centers are a strategic asset for sustainable development, innovation and economic resilience. However, if policy makers and industry leaders do not actively shape this emerging market, they risk missing a major opportunity.
Nations must be willing to experiment with new ways of integrating heating, cooling, water, and electricity networks, bringing diverse players together to rapidly develop expertise in energy ecosystems. The potential is global. The technology is available. And if we act now, data centers can become a cornerstone of global efforts to build a more sustainable future. Finland is already charting this path. The question is, will the rest of the world follow?
Tuuli SarvilinnaDivisional President, Dedicated and Machinery Drives, at Danfoss Drives