Travel is one of the sectors being most transformed by the internet, a new study commissioned by Google shows.
The research found that the internet is worth £100 billion a year to the UK economy, accounting for 7.2% of gross domestic product.
The calculation comes from the study which found that if the internet was an economic sector it would be the UK’s fifth largest – making it larger than the construction, transport and utilities industries.
The report from the Boston Consulting Group found that around 60% of the £100 billion a year figure is made up from internet consumption – the amount that users spend on online shopping and on the cost of their connections and devices to access the web.
The rest comes from investment in the UK’s internet infrastructure, government IT spending and other elements.
The ‘Connected Kingdom: How the internet is transforming the UK’ report says that the internet’s contribution to GDP is set to grow by about 10% a year, reaching 10% of GDP by 2015.
The UK is the world’s leading nation for e-commerce. For every £1 spent online to import goods, £2.80 is exported.
“This is the opposite of the trend seen in the offline economy, which exports 90p for every £1 imported,” according to the report.
Small businesses that actively use the internet report sales growth more than four times greater than that of less active companies, the study shows.
It compares the UK to other countries in the Organisation for Economic Co-operation and Development (OECD) – see chart below.
Under its scoring system, the UK ranks sixth, above Germany, the US and France. The highest ranked country is Denmark.
BCG partner Paul Zwillenberg said: “The internet is pervasive in the UK economy today, more so than in most advanced countries.
“Several industries – including media, travel, insurance and fashion – are being transformed by it.”
Google UK managing director Matt Brittin said: “The internet is a central pillar of the UK’s economy.
“The sector has come of age, and with great prospects for further growth the UK internet economy will be vital to the UK’s future prosperity.”
TOP NET NATIONS:
• Republic of Korea
Source: BCG report