Data Centers Drive Frankfurt’s Economic Growth — But Operators Face Growing Obstacles

Data centers are the foundation of digital value creation in Frankfurt and the entire Rhine-Main region. A relatively new study by the German Economic Institute (IW), conducted in collaboration with consulting firm Detecon and commissioned by a regional consortium including Hessen Trade & Invest and the City of Frankfurt, provides clear figures. It also shows that, in contrast to the economy as a whole, the industry is recording exceptional growth. The city and the entire Rhine-Main region also benefit significantly from this.

Over the past five years, the gross domestic product (GDP) of the data center industry in the Frankfurt-Rhine-Main region has doubled (as outlined in the German-language IW Consult 2025). Growth in Frankfurt itself reached almost 90 percent. By comparison, the overall economy of Frankfurt and the region grew by only around 16 percent. The study’s authors also predict strong momentum for the next five years: the industry’s GDP is expected to grow by 175 percent in Frankfurt-Rhine-Main and by 53 percent in the city of Frankfurt.

Every euro generated in data centers triggers a further 51 cents in economic output – 24 cents of which remain directly in the region. Added to this are tax revenues: in 2023, the industry as a whole was responsible for €405 million in tax revenues. Of this, €287 million went directly to the industry and a further €117 million to suppliers. According to the estimation model, around ten percent of tax revenues remain in the local municipalities, largely through trade taxes.

Data center users are rewarded with higher revenues

User industries also benefit: as the study points out, companies that rely heavily on data centers are more innovative, productive, and show stronger growth than those that do not. Here, too, the figures speak for themselves: “Across Germany, data center users were able to generate around 18 percent of their turnover in 2023 with new products or services that did not exist before. For companies that do not use data center infrastructure, this figure was only just under 8 percent – less than half.” The IW already identified this trend in a previous study commissioned in 2024 by our eco and the Alliance for the Strengthening of Digital Infrastructures in Germany, which was founded under the umbrella of the eco Association.

Both studies address the enormous spillover effects of data centers in this context. According to the IW, “at least six million employees across Germany work in companies whose business model would not be possible without cloud usage”.

As our study by Arthur D. Little, eco, and the Alliance published in September 2025 also illustrates, artificial intelligence is further accelerating these effects, driving rising demand for computing power and high-performance networks.

According to the authors of the recent IW study, the Frankfurt-Rhine-Main region “plays a central role nationwide in enabling this digital transformation throughout Germany by providing high-performance digital infrastructures.”

This also reflects the key findings of a study published this year by the Frankfurt Internet Exchange DE-CIX: the existing infrastructure density in Frankfurt exerts a strong pull on domestic and international companies, which invest at least two billion euros annually in the digital infrastructure of the Frankfurt region – in addition to the direct value contribution of more than 300 million euros that DE-CIX Frankfurt alone brings to the Hessian economy (see the study by Dstream Group 2025).

Push and pull effects of Frankfurt’s data center industry

In addition to the strengths of Frankfurt and the entire Rhine-Main region (including proximity to DE-CIX, a good network infrastructure and data gravity, as well as a secure and stable power supply), the new IW study clearly states what operators have experienced for years: short-term available additional power capacity on a large scale, high energy costs, lengthy approval processes, regulatory uncertainty, and scarce land for new data center construction. This complex situation is leading to deteriorating conditions for operators throughout Germany and the Frankfurt region.

This finding is, unfortunately, not new. For years, operators within the digital infrastructure ecosystem have been pointing out these shortcomings to policymakers and local authorities through industry initiatives such as the eco Alliance. The consequences of further deterioration are therefore well known: there is a growing risk of migration to other European countries, especially Scandinavia, where energy prices, land availability, and power connections for data centers are highly attractive.

As far as the problems for operators in this country are concerned, all study results and opinions of industry experts agree. The problem areas are clearly evident, and now concrete solutions are needed. This can only be achieved through close cooperation between operators, policymakers, and municipalities.

My urgent appeal: Germany – and Frankfurt in particular as the digital capital – cannot afford to weaken the foundation of its digital economy. We must ensure affordable, base-load-capable electricity for data centers, as well as predictable land and network capacity. In addition, we need accelerated and more reliable approval procedures instead of regulatory hurdles, and a clear political commitment to digital infrastructure as a strategic future task for Frankfurt and the entire Rhine-Main region.

Dr. Béla Waldhauser is Spokesperson for the Alliance for the Strengthening of Digital Infrastructures in Germany, set up in early 2018 under the umbrella of eco to support Germany’s development as a digital location. As a theoretical physicist, Dr. Béla Waldhauser is Chief Executive Officer of Telehouse Deutschland GmbH and KDDI Deutschland GmbH. Previously, he was responsible for the German operations of Global Switch, and prior to that TeleCity. Before this, he was Managing Director for Germany and Austria for Teleglobe. For several years, he has been Leader of the eco “Data Center Infrastructure” Competence Group and, since 2011, Member of the Jury for the “German Data Center Prize” in conjunction with the annual “Future Thinking” congress. In 2014, he was invited by the German Federal Ministry of Education and Research, as an expert and as a member of the eco Association, to actively participate in establishing the new strategy platform for “ITC in Horizon 2020.” He also serves on the boards of Adam, LCL, and Mainova Webhouse.