Almost 50,000 homes could have been built in Ireland between 2019 and 2024 if resources used to expand the country’s data centre infrastructure had instead been directed towards housing, according to a new academic study.
The research, carried out by academics from the Autonomous University of Barcelona, Maynooth University and University College Dublin, challenges the economic case for continued data centre expansion and raises questions about how Ireland’s limited resources are being allocated.
The researchers examined the opportunity cost of developing data centre infrastructure, arguing that the resources committed to the sector could have been used to address other pressing needs, particularly Ireland’s housing shortage.
According to the study, nearly 50,000 homes could have been built between 2019 and 2024 if resources devoted to data centre expansion had instead been directed towards residential construction.
The researchers also calculated that the labour demand associated with data centre infrastructure between 2019 and 2025 could, on average, have created and sustained 20,490 jobs in education, 12,657 jobs in the health service or 25,484 jobs in social work-related activities.
The findings come amid continued debate over the rapid growth of data centres in Ireland, which has become a major centre for the sector because of its large technology industry and access to digital infrastructure.
However, data centres have also faced scrutiny over their demand for electricity and the wider economic benefits they provide.
The new study takes particular issue with a recent Government-commissioned report, produced by KPMG for the Department of Enterprise at a cost of more than €100,000.
That report claimed data centres “underpin” around 876,000 jobs in Ireland, a figure representing close to one-third of total employment.
The Government report also acknowledged that only approximately 3,300 people are directly employed in data centres.
The academic researchers argue that the much larger jobs figure relies on a methodology that exaggerates the sector’s wider economic contribution.
They point out that the Government research surveyed 30 companies across six sectors and used their responses to estimate the proportion of employment that was digitally dependent.
The academics argue that these businesses were not representative of the Irish economy. Most Irish businesses employ fewer than 50 people, while the companies surveyed for the Government report had average employment levels of between 2,100 and 5,200 workers.
The study also questions the assumption that businesses located within 50 kilometres of a data centre and connected to cloud services are economically dependent on that facility.
Patrick Bresnihan, an associate professor at Maynooth University and one of the study’s authors, told The Journal that this was “a huge claim to make” and “almost impossible to establish”.
The Journal has previously reported concerns surrounding the Government report, including the removal of references to prioritising data centres ahead of housing and transport from an earlier draft.
It also reported that the final report did not examine the potential for increased data centre demand to contribute to higher electricity prices, despite this issue appearing in the original terms of reference.
The new research also criticises comparisons between Ireland’s data centre sector and major industries overseas, including Germany’s automotive industry.
The researchers said such comparisons were “spurious at best”, noting that Germany’s automotive industry employs an estimated 400,000 people directly while using around 3% of electricity generation.
Irish data centres, meanwhile, directly employ roughly 3,300 people but accounted for 22% of national electricity grid demand in 2024, according to the study.
The Department of Enterprise said it would “consider the research from Maynooth University and the evidence underpinning its findings”.
A spokesperson said it would not be appropriate to comment on the study’s specific findings without reviewing the publication in full.
KPMG declined to comment on the research.
The researchers stress that the almost 50,000-home figure is an illustration of the opportunity cost of data centre development rather than a claim that those homes would automatically have been built.
Their findings nevertheless highlight the competing demands on Ireland’s infrastructure and resources, particularly as the country seeks to increase housing supply while accommodating continued investment in the technology sector.
