The Internet is more important to the British economy than was first thought. According to a new report, The Connected Kingdom, from The Boston Consulting Group and commissioned by Google, the Internet economy as a whole contributed a whopping £100 billion or 7.2 percent of the nation's GDP – that's more than construction, transportation and utilities -and would be the UK's fifth largest industrial sector if it were treated as a separate case.
Rather more significantly, the economy has become a net exporter of Internet services, exporting £2.80 for every £1 it imports, a big differentiator from the rest of the UK economy where 90p is exported for every £1 imported, according to the report. Furthermore, it's expected to grow by around 10 percent a year until the Internet economy makes up 10 percent of GDP.
The figures are even more impressive than they seem at first glance: they don't include business to business e-commerce or online advertising. The Internet economy does include consumer e-commerce sites. The report also highlights the UK's broadband base – 19m of the country's 26m households are connected to high-speed services.
It’s interesting to see that BCG estimates that the internet could account for 15% of British GDP in 5 years time. For this to happen businesses will need to continue to invest in the user experience of internet services. Without this we might see a slowdown in adoption as consumers’ demands of the internet increase," said Neil Barton, director, Hostway UK.
Success so far hasn't been achieved across the country as a whole. The Internet economy is dominated by London and the south-east of the UK, with eastern England following close behind. Internet usage is lower for the rest of the country says the report.
The report also points out that while the UK scores highly when it comes to expenditure, it lags behind when it comes to engagement of its citizens. The government has developed a strong online presence but the issue of universal broadband is sure to remain a contentious one, with many rural communities not able to employ broadband and its slow broadband speeds dragged it further down the rankings.