UK makes the most money from the internet

The UK is leading the way in making money out of the internet, according to an analyst’s report.

Internet-based businesses boosted the UK economy by £121 billion in 2010, according to the Boston Consulting Group report, making up 8.3% of GDP – the highest rate of any G20 nation and nearly double the average 5.3% for developed nations.

The UK’s so-called internet economy will continue to grow by 10.9% – higher than the G20 average of 8.1% – and within four years make up 12.4% of the UK’s GDP.

In the UK, for example, the internet’s contribution to 2010 GDP is more than that of construction and education

“The economic impact of the internet is getting bigger — just about everywhere — and it already has an enormous base,” the report said. “In the UK, for example, the internet’s contribution to 2010 GDP is more than that of construction and education.”

In terms of retail, the report predicted online sales would make up a quarter of the UK’s shopping by 2016 – more than the next ranked country, Germany, at 11.7%.

“Thanks in part to high internet penetration, efficient delivery infrastructure, a competitive retail market, and high credit card usage, the UK has become a nation of digital shopkeepers, to paraphrase Adam Smith,” the report said.

Those sales don’t capture the full influence of the internet when it comes to shopping, the report added, with nearly 11.5% of UK shopping researched online before being purchased offline.

Education importance

The analyst firm advised governments to invest in digital economies, especially in education.

“Perhaps even more than the industrial era and information age, the internet economy requires a well-educated and skilled workforce,” it said. “Countries that fall behind in providing educational opportunity are also likely to lose out to others in internet-driven economic growth.”