£100bn web economy makes Britain a world leader

We all know that the internet is transforming the way we work, but it's also transforming the economy, too: a new study by Boston Consulting Group claims that the UK’s web industry now constitutes 7.2% of GDP, or about £100bn a year; Brits are now spending more money online per capita than anyone else in the world. As a result, the sector now supports 250,000 jobs, and will grow to constitute 10% of GDP by 2015. Which, presumably, makes it all the more important that we get a wriggle on with this high-speed broadband roll-out...

The report suggests that 60% of that £100bn figure is made up of what we spend on ‘internet consumption’ – things like internet connections, devices to access the internet and, crucially, online shopping. The remaining 40% (that’s £40bn, remember) is, according to the report, made up of expenditure on internet infrastructure, Government IT spending and ‘net exports’.  

According to the report (commissioned by Google - fitting, since it's one of the biggest beneficiaries), if the internet was a sector it would be the UK's fifth largest, bigger even than the construction and the utilities industry. This is a slightly odd concept to grasp, not least because some of this money would presumably have been spent anyway (e.g. online retail is a sub-sector of retail spending, not a separate category).  But it gives a sense of scale, at least.

What’s more, the amount of cash the internet is bringing into the UK economy will make George Osborne's eyes light up – apparently, for every £1 spent on imports, it produces £2.80 worth of exports; whereas offline, a paltry 90p worth of goods is exported for every £1 spent on imports. That's a recovery-friendly stat. And according to BCG, Britain now has a higher online expenditure per capita than any other country on the planet. So at least we’re a world leader at something.

Naturally, since online spending depends (partly) on infrastructure, the Government will have a huge influence on the speed of the sector’s growth. And the good news is that all those cuts notwithstanding, the Coalition (quite sensibly) still seems committed to universal broadband access by 2015. So that side of the spending should continue - and if the ambitious penetration targets are met, that will facilitate more people spending more money online, thus propping up that side of things too. So it's hard to see this £100bn figure going anywhere but up.