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October 28, 2010

Web worth £100bn to UK economy

Google report highlights online importance

By Steve Evans

The Internet is worth £100bn per year to the UK economy, according to a report by Google and US consultants Boston Consulting Group (BCG).

Online activities now represent 7.2% of the UK’s GDP, more than the construction, transport and utilities industries and just a shade behind the financial services sector.

The UK’s Internet economy is likely to grow 10% each year, reaching 10% of GDP by 2015, the report said.

Most of the £100bn (about 60%) comes from consumption, meaning what users are spending on online shopping as well as what it costs to get connected to the online world. The UK is also a net exporter of eCommerce goods and services, exporting £2.80 for every £1 it brings in, the report claims.

The report highlighted the role small companies are playing when it comes to using the Internet to promote and sell their business abroad. Those with a bigger Internet presence saw their sales grow four times faster than those with a low or no web presence.

About 250,000 people are employed by eCommerce companies in the UK, the report says, and 19 million households are connected to the Internet. Broadband penetration has more than doubled since 2005.

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The report also picked up on geographical differences when it comes to Internet access. London is the UK’s Internet hotspot, followed by the south east and the east of England. Internet usage is lower across the rest of the UK, the report found.

"The UK may not be home to Internet giants such as Facebook, Google, Yahoo or eBay, but it has produced Sir Tim Berners-Lee, the father of the World Wide Web, and a solid base of savvy online consumers and companies whose success is driven by their use of the Internet," the report said.

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