In a report published today it was revealed that the internet in the UK alone is worth £100 billion to the economy, representing more than a 7% share of total national income.
The study, carried out by the Boston Consulting Group on behalf of Google, the internet’s most successful company, places a value on the UK internet market for the first time.
If it were an industry in its own right the internet would be more than twice the value of the UK hotel and restaurant market and nearly as big as the financial sector, which accounts for 9% of Gross Domestic Products in 2009.
However, the research did find that there is a digital divide in the UK, with certain parts of the country – namely Scotland and Northern Ireland – lagging far behind London and the south-east.
In an interesting twist in the report, it turns out that British consumers are more willing to spend money online than can be typically seen elsewhere. E-commerce drives a large section of the internet’s expansion; as a proportion of retail sales, online transactions in the UK are high.
To emphasise this point, the UK has the largest e-commerce market in the world when measured by the amount spent per capita. The popularity of buying goods and services has also fueled a boom in the amount companies are prepared to pay for online marketing as heavy spending can help attract users to their sites.
The online advertising market in Britain is worth £3.5 billion and is the biggest anywhere outside the US.
It is forecasted that the internet economy is to continue to boom with 10% year on year growth projected for the next 5 years. If this trend comes to fruition then the internet economy will contribute up to 13% of GDP by the year 2015. For an idea of scale the current internet economy is already larger than the utility and transport industries put together.
The report also highlights the success of small firms using the internet to increase global sales. The UK now exports goods and services which are worth £2.80 for every £1 it imports. Google’s annual turnover was £23.6bn last year which encompasses very nearly a quarter of the £100 billion contribution the entire internet made to the UK economy in 2009.