Jennifer Sanders, Executive Director, North Texas Innovation Alliance; Cofounder, National Smart Coalitions Partnership.
Resilience is a relevant concept for all of us—humans, leaders, companies, cities and institutions. While its application is varied, the goal is the same: to create a stable, successful future that can withstand disruptions, both expected and unforeseen.
It doesn’t have to be something you have to predict or react to—it can and should be part of current or planned strategic efforts that may surprise you.
Strategic Resilience In Action
Organizations and entities across sectors are already, consciously or not, pursuing resilience:
• Companies seek resilience in revenue and operational growth.
• Cities aim for uninterrupted resident services and crisis-proof operations.
• Utilities tackle infrastructure resilience amidst growing demand and real (or perceived) resource scarcity.
• Individuals focus on mental, physical and financial stability.
• Economic developers leverage resilience to drive economic and population growth
In a recent roundtable discussion to prepare for an upcoming legislative session, one of the key topics included approaching the impacts of AI on economic development, workforce and electric infrastructure. Or in a nutshell, where AI and resilience intersect. The key takeaway? AI is complex.
AI: An Economic Driver And Drain
It’s becoming clear that AI will be a major catalyst for economic development that every company and city, who can afford to, will tap into. The technology has transformative potential for economic growth. For example, Cincinnati’s REDI initiative leveraged AI to attract $6.2 billion in investments over a decade by aligning talent and infrastructure with investor needs.
That’s a huge incentive to ramp up AI-driven projects and AI-based investments. But what will it take to reap these economic benefits without being zapped of critical resources?
AI, and the data centers that power it, require huge amounts of energy and water. According to Barclays Research, U.S. electricity demand from AI-driven data centers could more than double by 2030, accounting for over 9% of total electricity consumption. Unlike other industries, AI’s 24/7 operational needs create constant, peak demand on the grid.
Additionally, AI’s water footprint, which is often a secondary thought to its power requirements, is considerable. In Virginia’s “data center alley,” water consumption rose nearly 64% between 2019 and 2023, with facilities there using over seven billion liters of water last year alone. While energy can be regenerated—water is finite. So this challenge is one that needs addressing, and quickly.
This resource strain is compounded by increasing extreme weather events, forcing communities to rethink infrastructure planning and investment. The devastation caused by extreme weather is hardly news—and has been experienced by the majority of Americans. The struggle is deciding what to build, where to build it and how to model preparations to protect communities and businesses from risk. How to pay for those systems and infrastructure is another question entirely.
In listening to all of this during that roundtable discussion, an idea sprung to mind . . . our economic development models must change in the age of data center needs, generally, and in the age of AI specifically.
Let’s Start Again: Flipping The Economic Development Incentive Model On Its Head
Classic economic development incentive models fall into three primary categories: tax incentives, direct financial assistance and infrastructure support. These funds typically come in the form of either mandatory (automatic) or discretionary (based on hitting benchmarks set in the agreement) benefits.
Does this model work to fully address AI and related infrastructure challenges? Does it embed much-needed resilience into planning?
I see a new model taking over: Shared-Cost, Shared-Benefit Infrastructure. Flipping traditional incentive models can create a “win-win-win” for public, private and community stakeholders. But what could shared-cost, use and infrastructure look like in practice?
New Economic Incentive Structures
Economic development corporations or entities can establish incentive structures that incorporate pre-investment in needed capacity, infrastructure, micro-grids, closed-loop resource systems, dedicated green infrastructure and community-use facilities.
• Site Selection with Shared Resources: Selectors identify parcels with existing or upcoming capital improvement infrastructure projects in planning.
• Pre-Built Infrastructure: Economic development entities could pre-invest in needed capacity and infrastructure, including microgrids and closed-loop resource generation for relocated or expanded operations.
• Greenspace and Green Infrastructure: Commitment to dedicate a portion of the site for green infrastructure—greenspace, tree cover, closed-loop water system use—which can also become a resource in the case of a natural disaster or weather event that impacts health and safety.
• Community-Centric Commitments: Facilities could serve as central community spaces for various functions—training hubs, meeting spaces, small businesses, disaster-resilient centers and more. This focus brings greater value and benefit to underserved communities that are often zoned for data center/industrial facility use but don’t always benefit from it.
This shared model helps mitigate resource pressures while also neutralizing NIMBY objections and providing services to underserved communities, aligning with federal funding priorities.
Will New Funding Models Solve All The Problems? Funding is only one piece of the solution. As with any paradigm-shifting technology, there will be uncertainty and disruption. Policymakers and businesses will need to address the intangibles as well. Highlighting AI’s role as an enabler, not a replacement, and working to build trust in the community transparently. They could tap into external expertise and collaborative partnerships, learning from models like interdepartmental rotations in IT and cybersecurity. Streamlining data use will also be important to ensure access to accurate, shareable and secure data for decision-making.
AI and its related infrastructure challenges aren’t problems—they’re opportunities. By embedding resilience into planning, embracing shared-use resource and incentive strategies and fostering community-serving hubs vs stand-alone, single-use silos, we can achieve sustainable growth that benefits public, private and community interests alike. Economic resilience isn’t just about adapting—it’s about thriving.
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