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IoD's response to BIS committee's inquiry into the digital economy

29 Oct 2015
Financial markets displaying on a digital screen

The UK’s digital economy should be a matter of national pride - yet it is not. The IoD responds to the Business, Innovation and Skills committee's inquiry into the digital economy.

The IoD welcomes the opportunity to contribute to the Business, Innovation and Skills Select Committee’s inquiry into the digital economy. Britain’s digital economy should be a matter of pride.

It is worth stating before answering the Consultation’s particular questions just how far Britain leads the rest of the world in the adoption of the digital economy. The Boston Consulting Group estimate that next year 12.4 per cent of UK GDP will come from what it terms the “internet economy,” which is significantly ahead of the second placed nation, South Korea, at 8 per cent. The European average is 5.7 per cent, the US comes in at 5.4 per cent, and Germany at just 4 per cent. Furthermore, online retail is expected to entail nearly a quarter of all UK retail transactions in 2016.

At 23 per cent, we are almost double that of our closest competitor (Germany: 11.7 per cent) and streets ahead of the developed market average of 8.5 per cent.

It is important, however, that British businesses or the Government don’t rest on what are quite considerably digital laurels. There is no question that internet technology – and digital communication innovation more generally – will allow economies across the world to rapidly catch up with digital leaders, far quicker than would be the case with manufacturing. We therefore welcome the Committee’s review of the digital economy.

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