UK's internet industry worth £100bn - report
The internet is worth £100bn to the UK economy, more than 7% of national income, according to a report out today.
If it were an industry in its own right, the internet would be more than twice as large as the UK hotel and restaurant market and nearly as big as the financial services sector, which accounted for 9% of GDP in 2009, the study says.
The findings come in a report for Google, the internet's most successful company. The study, by Boston Consulting Group, US consultants, places a value on the UK internet market for the first time.
BCG partner Paul Zwillenberg, one of the report's authors, said the internet is giving UK companies access to international markets and allowing them to generate "astounding" growth.
But the research also found that there is a digital divide in the UK, with some parts of the country – including Scotland and Northern Ireland – lagging far behind London and the south-east.
The report finds that British consumers' willingness to shop online was powering the internet's expansion. "A lot of it is driven by e-commerce", Zwillenberg said. "As a proportion of retail sales, [online transactions] are high. The UK is punching above its weight."
The country has the biggest e-commerce market in the world when measured by the amount spent per capita, BCG found. The popularity of shopping for goods and services online has also helped to fuel a boom in online advertising as companies spend heavily to attract users to their sites.
Britain has the biggest online advertising market anywhere outside the US. It is worth around £3.5bn a year.
The internet economy is likely to grow by 10% a year for the next five years and could contribute up to 13% of GDP a year by 2015, the report's authors conclude. It is already larger than the utility and transport industries combined.
That growth will depend in large part on whether targets for broadband penetration are met, however. The government has said it wants everyone to have internet access at a speed that would allow users to download video content by 2015.
Twenty-five years after the first UK website address was registered, and over a decade since the dotcom crash threatened to wipeout a generation of fledgling British internet companies, the report also highlights the success of small firms in using the internet to boost global sales. The UK now exports goods and services worth £2.80 for every £1 it imports. Google's annual turnover was £23.6bn last year, almost a quarter of the £100bn contribution the entire internet made to the UK economy in 2009.
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