The internet is worth £100bn annually to the UK economy, comprising 7.2% of the gross domestic product, which is expected to reach 10% within five years, according to a survey commissioned by Google. The figure represents a higher proportion than the construction, education and transport industries. The share is also likely to grow to 10% […]
The internet is worth £100bn annually to the UK economy, comprising 7.2% of the gross domestic product, which is expected to reach 10% within five years, according to a survey commissioned by Google. The figure represents a higher proportion than the construction, education and transport industries.
The share is also likely to grow to 10% by 2015, putting the internet’s contribution on a par with the financial sector. The Boston Consulting Group (BCG) said 60% of the £100bn came from ‘internet consumption’ – via online shopping and the cost of devices and connections to access the internet. The remaining £40bn comprised internet infrastructure investment, government IT spending and net exports.
01/11/2010
The survey also revealed this country exported £2.80 of e-commerce goods and services for every £1 imported, and that 250,000 people are employed in the e-commerce sector. In contrast the “off-line” economy exports 90p for every £1 imported, BCG said.
The report also found that 250,000 people are employed by e-commerce companies in the UK.
The survey also placed Britain in sixth place on the ‘e-intensity index’ – which calculates the reach and depth of the internet in the world’s major economies.
Denmark leads the way by this measure, with the UK above the likes of the US, France and Germany.
Altogether, BCG said more than 19 million UK households have an internet connection – a 73% share – with broadband penetration doubling since 2005.
Among the other findings, 31 million adults bought goods or services online in the past year, or 62% of all adults. Collectively, they spent about £50 billion last year on goods and travel.
Paul Zwillenberg, partner with BCG in London, said: “The internet is pervasive in the UK economy today, more so than in most advanced countries. Whether they are driving international expansion, improving their interactions with customers or the efficiency of their supply chains, UK companies are increasingly embracing the internet’s potential. Several industries – including media, travel, insurance, and fashion – are being transformed by it.”
Matt Brittin, managing director for Google in the UK and Ireland, added: “We all know how the internet has changed the way people access information and communicate. Now for the first time we can see how its adoption by British business has become a major contributor to the UK’s GDP, and that the internet is a central pillar of the UK’s economy.”
TOP NET NATIONS
1. Denmark
2. Republic of Korea
3. Japan
4. Sweden
5. Netherlands
6. United Kingdom
7. Norway
8. Finland
9. Germany
10. Iceland
Source: BCG report
