Research from The Boston Consulting Group (BCG) reveals that the UK is the digital world leader as the internet now contributes 10% of GDP to the economy.
The internet has has performed well since 2010 and is now expected to contribute £180bn to the overall UK economy in 2015, up from £120bn five years ago. The sector is now the second-highest contributor in the UK, beyond property, with 10% towards the total GDP, and now overtakes manufacturing and retail.
The research also revealed that by 2016, the internet economy will be contributing 12.4% of GDP in the UK, compared with a G-20 average of 5.3%.
Under the BGG definition the internet economy in the UK includes online retailing, sales of internet-related devices, IT and telecommunications investments, and internet-related government spending.
Paul Zwillenberg, a BCG partner and digital economy expert believes this trend is set to continue: “Among G-20 countries, the UK’s digital economy is the largest as a proportion of GDP, and we expect the UK to retain its position.”
However, Zwillenberg did warn that the UK may need a new industrial strategy if it is to ensure it remains as the digital world leader: “The UK needs fresh digital initiatives and a new type of ‘Twenty-First Century Industrial Strategy’ to ensure these strong growth trends continue to provide jobs and boost the UK economy over the course of the next parliament.”
Mr. Zwillenberg added:”We urge all parties to consider a more comprehensive industrial strategy fit for the twenty-first century to ensure that the Internet remains a strong driver of the UK economy, and we encourage whoever forms the next government to help ensure the UK remains a world-leading digital economy.”
“On the basis of our research into successful digital economies around the world, BCG has identified five core elements that should be incorporated into a new Twenty-First Century Industrial Strategy to consolidate and extend the UK’s position as a leading digital economy.
“This strategy would need to ensure investment in UK digital skills and training, vibrant clusters of Internet and technology sectors, such as London’s Silicon Roundabout, local early stage investment, a high-quality and flexible infrastructure, including mobile, and coordinated, cross-departmental government support.”