UK has the second largest online economy in the world
Written by MCM News Desk    Thursday, 28 October 2010 11:31    PDF Print E-mail
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The UK has the most developed internet economy in the world with the largest online e-commerce market per person, researchers have found. Online business is worth £100bn a year with internet revenue making up 7.2 per cent of our gross domestic product (GDP). The UK also has the second largest online advertising market world wide, after the United States. If the internet was an economic sector it would be the fifth largest - outweighing the UK's construction, transport and utilities industries.

 
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Around 60 per cent of the £100bn figure is due to internet consumption according to the report compiled by Boston Consulting Group which was commissioned by Google.

The remainder of the money is from the UK's internet infrastructure, government IT spending and net exports.For every £1 spent online to import goods, £2.80 is exported helping to make the UK the world's leading nation for e-commerce, according to the report The Connected Kingdom: how the internet is transforming the UK.

This compares to the economy offline which exports 90p for every £1 imported. Researchers pointed out that online purchasing could be higher because many people research products online and then buy them offline saving about £18bn a year.

Analysts said the amount by which the internet contributes to GDP is expected to increase by 10 per cent each year and will make up 10 per cent of GDP by 2015 - mainly due to an increase of consumption online.

A quarter of a million people are employed by internet companies with small businesses that make full use of the internet likely to report up to four times more growth than those that don't.

Despite this the UK was found to have poor infrastructure compared to other countries.

When ranked amongst countries in the Organisation for Economic Co-Operation and Development (OECD) according to internet infrastructure and availability, as well as online consumption Denmark was given the highest ranking with the UK in sixth place above Germany, the US and France - after .

"The internet is pervasive in the UK economy today, more so than in most advanced countries," said Paul Zwillenberg, partner with BCG, told the BBC.

"Several industries - including media, travel, insurance and fashion - are being transformed by it."

Matt Brittin, managing director of Google UK, said: "The UK internet economy will be vital to the UK's future prosperity.

 

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