Measuring the UK’s Digital Economy With Big Data

This project, which was carried out in 2013, used innovative ‘big data’ techniques to explore the size and nature of the digital economy in the UK. The project was commissioned by Google and delivered by NIESR researchers and data scientists from Growth Intelligence.

Methods

The research used a combination of industry codes and Growth Intelligence’s bespoke datasets. The analysis was carried out on a benchmarking sample of 1.8m UK companies.

Findings

The research found evidence that the digital economy is substantially larger than conventional estimates suggest. Using a sector/product analysis, we found 270,000 active companies in the UK (14.4% of all companies as of August 2012). This compares to 167,000 companies (10.0%) when the Government’s conventional SIC-based definitions are used. Switching from SIC-based to Growth Intelligence derived measures substantially increases the digital economy’s share of employment, from around 5% to 11% of UK jobs, although this finding is more speculative as the underlying data is weaker. We also find evidence of digital economy clustering around the UK, not only in London and the South East but also in Manchester, Birmingham, Aberdeen and Middlesbrough.

Download the full report here and the summary report here