Britain has become a “nation of digital shopkeepers”, with the internet industry as a whole now the fifth-largest contributor to gross domestic product, according to a report.
The Boston Consulting Group, commissioned by Google, found that domestic online shopping, broadband access and net exports of digital goods and services made up 7.2 per cent of UK GDP – ahead of the construction, education and transport industries.
About half of that sum is generated by e-commerce activity. While the UK lacks a homegrown online retail giant on the scale of Amazon or Ebay, BCG found that a multitude of small and medium-sized businesses are taking advantage of online distribution.
Examples cited by the report include UK Tights, which sells 23,000 varieties of hosiery; Wiggly Wigglers, a Herefordshire retailer of composting worms; and Mind Candy, creators of the Moshi Monsters online game, played by almost 30m children in 150 countries.
BCG found that companies making the greatest use of the web for sales and marketing grew at an average of 4.1 per cent annually over the last three years. Lower web users grew 0.6 per cent a year.
“Many SMEs report that they would not exist without the internet,” said Paul Zwillenberg, partner at BCG and one of the report’s authors. “You might expect a lot of Silicon Valley-type venture capital backing to be driving some of these businesses, but it’s absolutely not the case.”
It is these small companies that are the engine of the UK’s digital economy, which BCG expects to grow at 10 per cent a year for the next five years – reaching 10 per cent of GDP by 2015.
We already know that the UK is a world leader when it comes to buying things with their phones, but a new study points to the connection between spending and digital communications being indicative of consumer habits in the UK as a whole. The study, commissioned by Google and undertaken by Boston Consulting Group (BCG), shows that the UK has the world’s highest online spending per capita, totalling up to a value of 100 billion British pounds or 7.2% of Britains GDP. According to the Guadian, this makes ecommerce a bigger part of their economy than utilities, transportation, or construction. Online advertising is also extremely lucrative and far-reaching, with the U.K.’s online advertising market being second only to the United States’.