LAUNCHPAD: Digital economy is double what we thought

The number of technology firms in the UK is twice as large as we had originally thought, a new report has suggested. That’s twice as many hipsters cycling around Silicon Roundabout on fixies and twice as many bearded young men hanging out in coffee bars having earnest conversations that include the acronym ‘YOLO’. Nevertheless. We’re sure it’s a good thing…

According to the research, by the National Institute for Economic and Social Research, there are 270,000 tech companies in the UK, 40% more than the government estimate of 187,600.

What’s wrong with the government estimate? Tom Gatten, chief executive of Growth Intelligence, which supplied the data to NIESR, says the government’s methodology relies on ‘outdated codes or static lists’, which means it only uses a basic definition of what constitutes a technology firm.

‘Our new technology and internet data reveals new opportunities and insights for growth,’ says Gatten (although to be fair he would).

‘This research demonstrates the need for a new way of understanding the economy, both for government and for business’.

According to Google chief economist Hal Varian (who commissioned the report), the research has wide-ranging implications for the digital economy, ‘because it shows the spread of the digital economy into other sectors is driving growth and jobs throughout the UK’.