Internet-driven business made up 8.3 percent of the UK's economy, a bigger slice than in any other Group of 20 nations, according to figures from Boston Consulting Group.
Internet-driven sales, investment and other business are worth £121bn, or more than 8 percent of the total economy, to the UK, according to a report.
E-commerce, online ads, cloud data storage and other internet-related spending contributed £121bn to the UK's gross domestic product in 2010, according to The $4.2 Trillion Opportunity report, published on Monday. The total is likely to rise to £225bn, or 12.4 percent, by 2016 — a feat that would see the UK keep the top spot, the management consultant firm said.
If it were formally categorised as a sector, the internet would be the fifth largest in the UK, ahead of education, healthcare and construction, according to the report.
"Around the world SMEs which embrace the internet are growing faster and adding more jobs than those that don't," co-author David Dean, a Boston Consulting Group senior partner, said in a statement. "By encouraging businesses to adopt the internet, countries can improve their competitiveness and growth prospects."
Online retail in the UK racked up $102bn, or just over £64bn, in the period — almost half the total for the UK internet economy as a whole. The internet directly accounted for 13.5 percent of the country's retail sector in 2010, a figure that should rise to 23 percent by 2016, Boston Consulting Group said.
However, those figures do not cover sales where people decided which product to buy online before going to the shops. The 'research online, purchase offline' (ROPO) share of the overall British retail sector was 11.5 percent, the report said. By comparison, in Germany online sales had a 7.1 percent share and ROPO sales, 16.2 percent.
G20 internet economy
According to Boston Consulting Group, the total size of the G20 internet economy was $2.3tn (£1.5tn) in 2010, or 4.1 percent of the total GDP for the group of major nations. It expects this to nearly double by 2016, to $4.2tn or 5.3 percent.
South Korea came second after the UK in the impact of the internet on its economy, followed by China, Japan and the US.
Boston Consulting Group reckons the annual growth rate of the UK internet economy will be around 10.9 percent through to 2016. This is impressive when compared with the 6.5 percent predicted for the US. However, the developing markets in the G20 are expected to see higher rates — Argentina is expected to maintain internet economy growth of 24.3 percent, for example.
The company also surveyed UK consumers about their attitudes to the internet, finding that respondents would on average demand £2,175 a year to live without internet access.
The report was fairly comprehensive, being based on three years of research that examined 90 percent of global GDP. The company's methodology involved the measurement of "total spending on finished goods and services", it said, noting that this covered consumption, investment, government spending and net exports.
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