Research: Internet economy adds £45bn to UK GDP

The Internet is an economic powerhouse that is driving the whole UK economy through jobs, businesses and output, new Internet Association (IA) analysis reveals.

The research highlights the value the Internet brings right across the UK. The Internet economy contributes approximately 400,000 jobs, 80,000 businesses, and £45 billion (€53.01bn) in Gross Value Added to the UK’s Gross Domestic Product (GDP). These equate to about 1.2 percent of UK jobs, 3.1 per cent of UK enterprises, and 2.3 per cent of UK GDP.

The new research also gives, for the first time, a view of how important the Internet economy is to every region and constituency in the UK. IA provides unique estimates for every constituency in the UK based on a proprietary measurement approach. The median number of Internet sector jobs per constituency is 330, the median number of Internet sector businesses per constituency is 80, and the median value-added generated from the Internet sector per constituency is £50 million.

“These great new numbers demonstrate the strength of our tech industry and confirm the UK’s reputation as one of the world’s leading digital economies,” commented Nicky Morgan, Secretary of State for Digital, Culture, Media and Sport. “In government, we are working hard to maintain this success by helping entrepreneurs turn their ideas into business successes, investing in digital skills training and making sure we have a fantastic business environment.”

The findings showed:

• The Internet sector provided nearly 400,000 jobs to the UK economy as of 2016. The constituency with the highest number of Internet sector jobs is Cities of London and Westminster, which has approximately 23,000 jobs (or approximately 6 per cent of all Internet sector jobs in the UK).
• The Internet sector contributed nearly 80,000 UK businesses in 2016. The largest number of these – 1,800 – reside in the Manchester Central constituency.
• The constituency with the highest concentration of Internet sector businesses is Pontypridd, where 13.4 per cent of local businesses are Internet sector businesses. Manchester Central and Eastleigh have the second and third highest shares of Internet sector businesses with 10.9 per cent and 10.5 per cent, respectively.
• The largest contributor of Gross Value Added to GDP is the Cities of London and Westminster with over £900 million in value-added contributions. That is more than twice the size of the constituency with the second largest value-added contribution – Manchester Central with £420 million.

“These figures highlight the true value of the Internet sector to communities across all corners of the UK,” observed UK Executive Director Daniel Dyball. “Whether it’s a few dozen jobs in Rhondda or thousands in London, Manchester, Leeds and beyond, the Internet is helping drive the UK economy.”

The findings of the report also showed:

• The Internet sector provides nearly 400,000 jobs across the UK.
  • The average number of Internet sector jobs per constituency is 590.
  • The median number of Internet sector jobs across constituencies is 330.

• The Internet sector provides approximately 80,000 businesses in the UK.
  • The average number of Internet sector businesses per constituency is 120.
  • The median number of Internet sector businesses across constituencies is 80.

• The Internet sector contributes approximately £45 billion in value-added, the equivalent of 2.3 per cent of GDP.
  • The average value-added generated from the Internet sector per constituency is £69 million.
  • The median value-added generated from the Internet sector across constituencies is £50 million.

“The positive figures and tangible benefits are only set to grow as technology develops, but the Government must ensure the UK has the right policies to allow the Internet to thrive,” stated Dyball. “We are keen to work with the new Government to make the UK one of the best Internet economies in the world.”