41 their tax incentives. In the last four years, Amazon, Google, Microsoft, and SoftLayer all have built data centers in Montreal due to the extremely low price of electricity (Liggitt, 2017). However, according to David Drury, a senior manager at IBM, although one of Canada’s advantages is the price of electricity in certain areas, other criteria exist that can overshadow this advantage for companies. Two important criteria for decision makers are the continued operation of their systems and assurance that their data will be private. In the US, the 2001 Patriot Act allowed the federal government to monitor and examine data without a search warrant, creating a concern for foreign companies wanting to store their data in the US, until the act recently expired in 2020 (Stoller, 2012). Even after the Patriot Act expired, foreign companies still have some concerns as to whether the US, as well as other governments, are monitoring the data stored in their countries. This leaves clients wondering where they can protect their data from powerful governments and from competitors. Recommendations If cheap electricity, reliable infrastructure, tax incentives, and a political environment that protects client data are what is needed to foster data center investment, Alaska must focus on these issues. Electricity costs should diminish as the energy market in Alaska shifts to more renewable energy as well as with the passage of the federal Infrastructure Investment and Jobs Act, through which hundreds of millions of US dollars will be poured into renewable energy development across the country to lower the cost (DeMarban, 2021). Alaska is expected to share significantly in this windfall. Given the limited capacity of the Alaska grid, it also can be expected that money will be allocated to upgrade the current system. Although the funds will be dispersed over at least a five-year period, Alaska may soon have the conditions to reduce the cost of electricity below the national average and have the grid through which to distribute it, thereby incentivizing data giants to enter. Beyond federal funding, Alaska could create a tax incentive system and pass data privacy laws for both clients and users, increasing the economic incentive for companies to enter Alaska. One of the strongest existing incentives to open a business in Alaska is the lack of both income and sales taxes. Thus, clients purchasing services are not required to pay anything more than the upfront cost, and employees do not have to pay income tax. From employers’ standpoint, they do face a corporate tax brought on by the state if a company is fortunate enough to make any profit, but with only a simple corporate tax, the cost of doing business is dramatically reduced. Although it is not a tax incentive per se, if the renewable energy capacity of the state is increased, the price of electricity in several districts would fall dramatically. The state could tax industrial consumers, as the price with the tax likely would be lower than in other regions of the US. This tax, which would be a variable cost determined by the amount of energy consumed, would contribute to the state’s revenue. To further incentivize green energy usage and to decrease the burden felt by companies, the state’s industrial consumers of energy that utilize renewable sources could receive a corporate tax credit. This tax incentive is similar to the incentive structure created in the Scandinavian countries, but it could be improved by earmarking the money collected to be used to develop renewable energy in the state. The state could also partner with companies looking to create data centers in cold regions by providing the capital to develop renewable energy resources for their centers if they agree to employ Alaskan workers or maintain the center for a minimum number of years. Furthermore, the state could give corporate tax credits to these companies if they agree to start education and vocational training programs to employ Alaskan residents in these centers. The state of Alaska has a variety of methods and opportunities to foster and grow a strong data center industry through its choices as well as the incentives it can develop. The most difficult issue that most countries have solved regarding data centers, that Alaska and the US have not, is data privacy. At present, in the US, no federal data protection laws exist that cover all types of data (Klosowski, 2021). If the bill under revision is passed, Alaska would have one of the strongest data privacy laws of any US state (Alaska Consumer Data Privacy Act, 2021-2022). Alaska could readily support US companies
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