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UK internet economy worth £100bn, claims report

The UK is the world leader for e-commerce, with the internet economy contributing £100bn to the UK's gross domestic product (GDP) a year, a report has claimed....

The UK is the world leader for e-commerce, with the internet economy contributing £100bn to the UK's gross domestic product (GDP) a year, a report has claimed.

According to a report by the Boston Consulting Group (BCG), the UK internet economy represented 7.2% of UK GDP last year, which will grow 10% annually, reaching 10% of GDP by 2015.

The research, which was commissioned by Google, found that the UK exported £2.80 of e-commerce goods and services for every £1 imported. This is the opposite of the trend seen in the offline economy, which exports 90p for every £1 imported, said the report.

Matt Brittin, managing director for Google in the UK and Ireland, said the internet sector has come of age.

"We all know how the internet has changed the way people access information and communicate. Now for the first time we can see how its adoption by British business has become a major contributor to the UK's GDP, and that the internet is a central pillar of the UK's economy," said Brittin.

Around 60% of this total was driven by online shopping and the cost of internet connections and devices. Investment in the UK's internet infrastructure, government IT spending and net exports accounted for the other 40%.

Neil Barton, director of web hosting company Hostway, said businesses need to invest in the user experience of online services if the internet is to account for 10% of UK GDP in five years' time. "While consumers might have been prepared to wait 30 seconds for a website to load five to 10 years ago, now they expect a much more instantaneous experience," said Barton.

The report also found UK e-commerce and internet companies employ an estimated 250,000 people and have annual revenue of £50bn.

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