Apps and mobile sales blazing a trail
British Internet firms are putting the rest of the economy to shame as they grow more than fifty times faster than the rest of the country, new research from Barclays reveals. A study by the bank found digital businesses experienced 11.4 per cent compound growth annually over the past three years, compared with just 0.2 per cent for the economy as a whole. Most of the expansion is driven by small and medium-sized firms with fewer than 100 workers and whose revenues typically hover around the £9 million mark.
Almost a quarter of firms – 23 per cent – are based in the capital, despite it accounting for just one-eighth of the UK’s population.
It means that UK internet growth now accounts for a bigger percentage of GDP than that of any other major country, giving a fillip to prime minister David Cameron’s pledge to make digital enterprise a key part of stimulating economic growth – including his £680 million investment in rolling out faster broadband in cities and rural areas.
Much of the new growth in internet start-ups is based around East London’s so-called Silicon Roundabout area where Google has opened its own campus hub in the area to nurture new talent and where around 100 start ups are currently housed.
The Barclays report also found that firms got a particular boost from smartphones, with mobile sites or apps generating 27.8 per cent of their revenues on average.
Yet, despite the surge in Britain’s internet companies, Barclays researchers point to the challenges they face with nearly two thirds reporting increased costs and 43 per cent experiencing recruitment issues.
Real the Press release with full stats here.