UK's digital tech sector found to be '60pc bigger' than previously thought
UK's digital tech sector found to be '60pc bigger' than previously thought
A new report has suggested that the scale of digital technology firms and their importance to the economy in the UK has been vastly underestimated up until now.
The National Institute for Economic and Social Research (NIESR) report has found that there are actually 270,000 active digital technology firms in the country, not the 167,000 active firms as estimated by the Government. The report also claims that these digital companies are producing revenue which is growing 25 per cent faster than the revenue created by traditional firms.
In order to complete the report, the study has taken information gathered by software firm Growth Intelligence rather than the official Standard Industrial Classification (SIC). The traditional SIC information was first devised 65 years ago, and, according to the report, does not “properly classify” a range of digital companies across the country.
Senior research fellow at NIESR, Max Nathan, said: "Policymakers have identified the digital economy as one of the UK's key economic strengths. That means they need to be aware of the true numbers of digital businesses around the country.
"The old image of tech businesses as start-ups that make no money is out of date too: using big data we show a broad array of active businesses selling digital products and services,” he added.
Funded by software giant Google, the report has revealed that the digital arena in the UK is often being overlooked in terms of the power it provides to the economy.
Google’s chief economist, Hal Varian, said in the foreword to the report: "The UK is one of the world's strongest internet economies yet the myth persists that it consists largely of tiny dotcom or biotech startups in a few high technology clusters that quickly bubble up and often go bust.
"The reality, as this report shows, is that the digital economy has spread into every sector, from architecture firms whose activities have become almost entirely digital to machine tool manufacturers who now use huge online data-processing facilities ... to monitor every aspect of their processes."
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