Credit: Robert Scoble/Wikipedia

Does Google really add £30bn to the UK economy?

A new report by Deloitte suggests Google's good for us, no matter what European (or Russian) regulators think.

by Adam Gale
Last Updated: 29 Sep 2015

For a totally not evil company, Google gets a pretty hard time from governments. First it falls foul of Brussels bureaucrats on the antitrust beat, then it gets a new UK anti-avoidance tax named after it (albeit informally) and now it even has that paragon of fair competition, Russia, complaining about its domination of Android devices - potentially demanding 15% of its profits in the country to boot.

Tired, no doubt, of this bad rep, Google paid Deloitte to write a report measuring the positive impact it has on the British economy. The (rather wide-ranging) headline figures: businesses using Google products support or generate at least £11bn and possibly over £30bn in economic activity here, and are responsible for between 216,000 and 542,000 British jobs.

‘Google is a growth engine for British businesses large and small, helping them to unlock their digital potential,’ said Google UK and Ireland MD Eileen Naughton. ‘Our technology helps companies be discovered by new customers, boosts productivity by helping teams collaborate better, and helps content creators get paid for their creativity.’

The message is clear. Google’s an easy target but you couldn’t live without it.

Deloitte compiled the data from publicly available sources, rather than a direct feed from Google, and attempted to estimate the search giant’s total impact on other businesses, including ‘ripple effects’ on supplier and consumer demand.  

Broken down, it found that £11-28bn of economic activity was generated from the ad spend of UK businesses using Google Search and AdWords in 2014 (supporting 210,000-530,000 jobs), while the impact of publishers hosting adverts through Google’s Adsense was £243-545m (5,000-10,000 jobs). Content creators on YouTube generated £55-105m (1,000-2,000 jobs).

Deloitte said UK revenues for the app industry, meanwhile, totalled £4bn last year, supporting 380,000 jobs, without breaking down exactly how much of that corresponded to devices using Google’s Android operating system.

Even if only half of those revenues were from Android users, though, that still gives an upper-end total of well over £30bn – and that’s not even counting the productivity impact of services such as Google Docs and Gmail, or the start-ups it supports in its campus or indeed its direct employment of 3,900 people in Britain.

In either case, these are pretty big numbers. But the report is definitely not saying that we’re £30bn better off because of Google. To understand how much better off we actually are, we’d need to imagine a world without Google, which Deloitte recognised was beyond the scope of its report. Thankfully, MT has no such encumbrance...

If Google had disappeared a few years ago in a puff of multicoloured smoke, then other services like Yahoo or Bing would probably have expanded to take its place. But if Google had never been born, how much poorer would we have been?

Internet search  – and in large measure this means Google – has utterly transformed the economy. So many markets are far more efficient now, because instant search and cheaper, more targeted advertising have brought consumers and businesses together far more easily, which in turn reduced barriers to entry for new and small firms. Other markets (online dating, for instance) owe their very existence to it.

Yes, some revenues Google and the others 'created' would in fact have been displaced from other sectors such as traditional advertising, but the overall economic benefit from Google has surely been of far greater significance than even Deloitte’s upper estimates.

Still, a report like this one serves as another small reminder not to take the firm for granted. If Google really wanted everyone to know how much they relied on it, though, perhaps it should just suspend its services for a day, and see how many of its detractors themselves depend on its products. Somehow, one imagines the figure would be a large one.


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