Internet worth £100 billion to the UK

Beancounters have been adding up the numbers and dividing them by their shoe size and worked out exactly what the Internet means to Britain.

Boston Consulting Group, which is from the former British colony of Virginia, has worked out that the internet is worth £100 billion to the UK economy.

More than seven percent of national income is dependant on it and it makes nearly as much cash as the financial services sector.

The report was prepared for the Internet search outfit, Google.

BCG partner Paul Zwillenberg, one of the report’s authors, said the internet is giving UK companies access to international markets and allowing them to generate “astounding” growth.

However, the report shows that there is a digital divide in the UK, with some parts of the country, including Scotland and Northern Ireland, far behind London and the south east.

One of the reasons that the Internet is doing so well is because Brits are OK about shopping online. Probably because going to regular shops means that they have to leave the house and go out in the freezing cold during a winter where the weak sun goes down before it properly gets up. Zwillenberg said that as a proportion of retail sales, online transactions are high in the UK.

The country has the biggest e-commerce market in the world when measured by the amount spent per capita, BCG found. As a result there is a boom in online advertising as companies spend heavily to drive users to their sites.

Britain has the biggest online advertising market anywhere outside the US. It is worth around £3.5 billion a year.

The report predicts that the internet economy is likely to grow by 10 percent a year for the next five years and could contribute up to 13 percent of GDP a year by 2015,. It is already larger than the utility and transport industries combined.

All this is good news, but depends largely on whether targets for broadband penetration are met. This will happen if the UK government’s promose that everyone to have internet access at a speed that would allow users to download video content by 2015.