A report commissioned by Google has shown that the UK's digital sector is larger and potentially more profitable to the economy than first thought, debunking official government statistics that grossly underestimated a burgeoning area of business.


The report, carried out by the National Institute for Economic and Social Research (NIESR)  revealed that:

● there are at least 270,000 companies that form the digital economy - compared to the Government estimate of 167,000
● the revenue reported by digital companies is growing 25% faster than that reported by non-digital companies
● on average digital employers hire three more people - 15 % more - than those employers who are not digital
● the areas with the highest concentration of digital companies are outside London and spread right across the country, in places like Aberdeen, Middlesbrough and Manchester

"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," said Hal Varian, chief economist at Google.

"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, such as Hadoop, to monitor every aspect of their processes.”

You can read the full report here.