In today's City A.M. our tech specialist James Titcomb reveals the phenomenal growth that puts other sectors of our economy to shame:
British internet companies are growing at a rate more than 50 times faster than the rest of the country, with online startups booming despite a widespread economic malaise, figures published today reveal.
Research from Barclays shows that firms that sell their products or services mostly online have seen revenues grow by on average 11.4 per cent in the last three years, over 50 times faster than GDP growth of 0.2 per cent over the period.
To supporters of a market economy, this news comes as little surprise. The technology sector faces very little regulation, as sluggish bureaucrats struggle to keep up with the pace of change we are seeing, and can't think up new rules fast enough. While regulations that covers the typewriter still exist, progress has made both old technology and the laws governing it obsolete.
It is worth nothing that while the relatively unregulated technology sector is doing so well, one of the most regulated - financial services - saw a dramatic collapse. Many attribute part of that collapse to heavy handed regulation which saw governments inflate a massive housing bubble and implicitly back Too Big To Fail banks.
While high regulation can limit growth and encourage bad practice, markets help to keep businesses honest. Firms have had to come up with faster and better ways to improve our lives, developing products that we are willing to part cash for.
But our technology sector remains at threat. Politicians who don't understand new technology court ill-thought out attempts at regulation. Recent threats of internet filtering and the emergence of large intellectual property lawsuits are examples of legal threats to innovation. We are fortunate that politicians have kept away from the sector for now, but this good news story should serve as an example of what can be done. Liberalising the rest of our economy from punitive regulation could help revitalise the UK.