The UK economy could find itself £232bn richer by 2040, a growth of 6.9%, if the country continued investing in digital technologies at the same pace.
According to a study by Virgin Media Business and the Centre for Economics and Business Research (Cebr), the UK’s Gross Domestic Product (GDP) could increase by £74bn by 2025, £127bn by 2030 and £232bn by 2040 (larger than Finland’s current GDP of £209bn) if the current rate of digital investment is sustained.
Due to the Covid-19 pandemic, the UK’s GDP was £1.96tn in 2020, £216bn less than its GDP in 2019.
The study’s prediction is based upon the potential economic impact created by a trend of digital transformation-driven technologies leading to new ways of working.
Sustained digital investments are expected to support economic recovery, which is currently reeling from the Covid-19 pandemic along with the earlier hit received from exiting the European Union’s single market.
Cebr declared that the major trends transforming businesses by 2040 would be digital delivery of services (28% productivity gains), flexible working (17% productivity gains) and richer data due to AI and analytics (90% productivity gains). The resultant Covid-accelerated digital transformation coefficient comes to a noteworthy 11.9%.
The viability of such new ways of working has already been demonstrated through accelerated digital transformation across sectors in the UK, which has brought about reduced costs and increased productivity.
Cebr director of economic analysis Cristian Niculescu-Marcu said: “History shows us that periods of economic hardship can help to catalyse technological progress and adoption, as businesses and other stakeholders seek to adapt to new realities.
“This could create an economic high road over the coming decades, helping the UK economy to grow while also having the flexibility to deal with future challenges.”
The study also revealed the benefits to the UK public sector, apart from professional services, retail and construction sectors, through improved efficiency (employee productivity) and reduced costs.
The Cebr stated: “This is substantively responsible for the economic uplift of 4.8% across the retail, professional service and construction sectors by 2040, driven by continued growth in flexible working, enabling the delivery of digital services and providing richer data sets for AI and analytics.”
Virgin Media Business managing director Peter Kelly said: “Moves to accelerate digital adoption are driving extraordinary outcomes across private and public sector organisations, helping them to revolutionise how they work, deliver for customers, and provide vital services for our communities.”
Cloud communications platform provider Twilio revealed in a recent report that almost 96% of UK entrepreneurs concurred that the pandemic accelerated their company’s digital transformation plans.
The Cebr report explains the potential positive impact of digital transformation on economic recovery from the impact of a pandemic.