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Government digital ignorance puts Dutch economy at risk

In this interview, Michiel Steltman, managing director of Digital Infrastructure Netherlands, tells Computer Weekly why the Dutch digital economy is at risk due to a lack of knowledge and understanding at government level

While the Dutch government has expressed its ambition to become the “European digital junction”, its actions don’t seem to support this ambition. On top of that, the minister of public housing recently put a settlement ban on large and hyperscale datacentres, says Michiel Steltman, managing director of Digital Infrastructure Netherlands.

The Netherlands is traditionally a popular location for datacentres, not least because of the Amsterdam Internet Exchange (AMS-IX) and the solid fibre backbone the country has.

In 2012, Steltman warned of a shortage of connections to the power grid. In an article in the Financieele Dagblad, he stated that digitisation and electrification go hand in hand.

“I said at that time that the Dutch power grid needed to be upgraded to supply [the required] power,” he tells Computer Weekly. “But only recently another article appeared that stated the Netherlands needs to invest €3.5bn in the power grid to make it suitable for ongoing digitisation. But this is 10 years on.”

Construction ban

Steltman feels the government needed a scapegoat and found one in the datacentre sector. “We keep hearing that datacentres use too much power, so our minister of public housing, Hugo de Jonge, decided, at the start of this year, that for the next nine months the construction of large datacentres will be banned,” he says.

No building applications will be granted for datacentres larger than 10 hectares and with an energy consumption of 70MW (megawatts) or more. But that is purely based on sentiment, not on hard facts, according to Steltman.

“The sentiment is that datacentres take up too much space, use too much power and pollute our environment. But nothing is farther from the truth”
Michiel Steltman, Digital Infrastructure Netherlands

“Datacentres in the Netherlands are responsible for only 0.4% of our total energy consumption and they only buy 2.8% of the Dutch electricity. So really, this is not a solid argument against datacentres,” he adds.

Large datacentres and hyperscalers are regarded in the same way as mega-stables. “The sentiment is that datacentres take up too much space, use too much power and pollute our environment. But nothing is farther from the truth,” says Steltman.

“Even more so, by declining building applications, we are at risk of losing our popular business climate. A few years ago, our government expressed the ambition to become the digital mainport to Europe. But by retracing this ambition it has become an unreliable partner for the companies that chose the Netherlands as a business location.”

Steltman cites figures from the Dutch Data Center Association that state that 10% of all investments in the Netherlands comes from these companies. “Investors will start to question the Netherlands and look across borders to maybe Denmark, where they are welcomed with open arms.”

Will the Netherlands be worse off when a tech giant like Meta won’t build its new datacentre in the country? Maybe not, Steltman says, “but we should not underestimate the effects on our business climate”.

Society overall is digitising at a rapid pace. And since the pandemic, the Netherlands has become increasingly dependent on digital infrastructure. Expectations are high. People want to be able to chat, stream and download endlessly and effortlessly. Companies and universities store their valuable knowledge in the cloud. Policy makers want the Netherlands to be a country for innovation, to excel in data-intensive technologies such as artificial intelligence (AI) and quantum computing. And the new government promises superfast and safe internet in all parts of the country.

“But none of this goes without the accompanying prerequisites. It is evident that datacentres and digital infrastructure underlie development and innovation. This digital fundament requires coherent policy,” says Steltman. He feels that is currently lacking.

Lack of vision

“The lack of a coherent vision increases the risk of personal preferences of policy makers and ministers taking over,” warns Steltman. “When is a heap of sand no longer a heap if you continue to take away one grain at a time? Everything is intertwined, so you cannot just take away some element just because it doesn’t suit you. That is a risk we are currently running, because our government doesn’t sufficiently comprehend the integration of digital components, our society and our economy.”

Steltman fears the Netherlands is at risk of losing its digital mainport position to Middle East countries, like Saudi Arabia. “They [Saudi Arabia] have recently started a programme in which they’ve invested €15bn to build datacentres and internet exchanges. If we don’t follow suit, we could become a country like a country with internet connectivity, but lacking the particular position as digital hub. We can really lose our leading position in Europe.”

“We want to thrive at a sustainable level, and what is more sustainable than a datacentre? It doesn’t consume too much power, you can re-use the heat it emits, and it is CO2 emission-free”

Michiel Steltman, Digital Infrastructure Netherlands

What the Netherlands needs, according to Steltman, is not only coherent digital policy, but also an understanding of prerequisites. France, for example, has recently invested in landing points for sea cables. Denmark has a very friendly and welcoming climate towards the digital industry.

“They seem to get the importance and promise of digitisation for the future. Meanwhile, in the Netherlands, we are no longer granting building applications for datacentres, and we fail to actively play a role in bringing sea cables ashore,” he says.

“Governments in other EU countries are currently very active in bringing in new sea cables with the aim of also being able to build or strengthen data hubs and the whole ecosystem around them.”

Although Schiphol and the Port of Rotterdam have been declared major mainports by the government and policies have been developed to support them, this is lacking in the digital sector in the Netherlands. “Our government fails to understand the importance of the digital mainport and consequently appropriate policy,” says Steltman.

Although the digital sector in the Netherlands is taking up the gauntlet and sounding alarm bells wherever possible, government intervention is necessary to preserve important values for the future.

“We want to thrive at a sustainable level, and what is more sustainable than a datacentre? It doesn’t consume too much power, you can re-use the heat it emits, and it is CO2 emission-free. Moreover, we need datacentres and fibre grid to be able to underpin our digital future. Everything will be digitised and the need for storage and computing power will only increase. If our government fails to act on this, our economy is at serious risk,” warns Steltman.

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