Feeds

Congrats architects, PR bods, toolmakers - you're the new digital tycoons!

Thousands of 'traditional' firms bunged into Blighty's tech economy by Google study

Maximizing your infrastructure through virtualization

There are at least 40 per cent more companies that make up the UK's "digital economy" than any Government estimates, and those companies tend to be considerably more successful than non-digital companies, researchers have found.

The study [43-page, 6.2MB PDF], commissioned by Google and produced by the National Institute for Economic and Social Research (NIESR), found that revenue growth at digital companies was 25% faster than that reported by non-digital companies. Digital companies also hired 15% more people than non-digital companies, it found.

NIESR used new data provided by software company Growth Intelligence to track the activity of companies on the internet, rather than using the classification system used by the Government. It said that "hundreds of thousands" of digital companies working in 'traditional' sectors such as architecture, publishing and engineering had been incorrectly identified by the Government, and could be missing out on "vital support" and investment as a result. Politicians, banks and insurers all based policy decisions on the Government's Standard Industrial Classification (SIC) codes, it said.

"Policymakers have identified the digital economy as one of the UK's key economic strengths," said the report's author, Dr Max Nathan of NIESR.

"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 The old image of tech businesses as start-ups that make no money is out of date too: using big data we show a broad array of active businesses selling digital products and services."

NIESR found that almost 270,000 UK companies, or 14.4% of all companies as of August 2012, could be classed as 'digital'. The SIC method defines only 167,000, or 10%, of businesses as 'digital'. According to NIESR, this is because SIC-based definitions of the digital economy miss out a large number of companies operating in business and domestic software, architectural activities, engineering and engineering-related scientific and technical consulting, among other sectors.

Using Growth Intelligence data also showed that the popular image of the digital economy being dominated by start-ups was incorrect, as digital companies tended to have a similar average age to non-digital companies. This was because digital platforms and tools had begun to spread into the wider economy and were being used in a greater number of sectors, the report said.

Switching SIC-based data to Growth Intelligence data substantially increased the number of workers employed by digital companies, from around 5% to 11% of jobs, NIESR said. Digital companies also showed higher average employment than non-digital companies when using the Growth Intelligence data, with the opposite being true when SIC-based data was used. However, not all companies surveyed reported their staffing levels, NIESR said.

Although London was the most popular location for digital companies regardless of which classification method was used, NIESR said that there were also "highly concentrated" levels of activity in regional areas including Basingstoke, Milton Keynes and Aberdeen. Manchester, Birmingham, Brighton and the South East of England featured highly in terms of raw firm counts, NIESR said.

Speaking at a launch event for the report, Business Secretary Vince Cable described the new measure as an "interesting alternative". "As our recently published Information Economy Strategy highlights, innovation, entrepreneurship and growth are spread throughout the UK," he said. "The information economy transforms every other business sector, driving productivity and creating new opportunities for growth."

Copyright © 2013, Out-Law.com

Out-Law.com is part of international law firm Pinsent Masons.

Top three mobile application threats

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.