Wednesday 5 February 2020 4:09 pm

Digital sector contributes £149bn to UK economy amid tech boom

Digital companies contributed £149bn to the economy in 2018 as the UK retained its position as a leading tech superpower.

The figure, which equates to £400m per day, means the digital sector accounts for 7.7 per cent of the UK economy as a whole.

Read more: UK competition watchdog to push for tighter controls on US tech giants

Growth in the thriving tech sector was also six times larger than across the wider economy, according to new figures from the Department for Digital, Culture, Media and Sport (DCMS).

While the digital sector grew in line with the wider UK economy until 2015, official figures show its rate of expansion has accelerated rapidly over the last five years.

Investment into UK tech firms hit an all-time high of £10.1bn in last year, surpassing growth in all other countries, according to data from Tech Nation and Dealroom.

In its report the government highlighted the success of software publishers such as Newcastle-based Sage, which has grown its staff numbers to more than 13,000.

It also pointed to Newport-based semiconductor firm IQE, which has become a market leader despite the impact of the US-China trade war.

“Technology is a sweet spot of our economy, bringing jobs and wealth across the country,” said digital minster Matt Warman.

“The success is thanks to our business friendly environment and fantastic workforce. We are working hard to continue this momentum by strengthening regional tech clusters supporting digital businesses and investing in people’s digital skills.”

Spurred on by the success of video games firms, the UK’s creative industries pulled in £11.7bn in 2018, growing five times faster than the wider economy.

Overall, DCMS sectors excluding tourism contributed £224.1bn to the UK, accounting for almost 12 per cent of the economy as a whole.

Read more: British tech startups retain crown as European fintech capital

“Today’s figures show that the UK’s digital sector continues to be the UK’s modern success story, ” said Julian David, chief executive of industry body Tech UK.

“To guarantee the UK’s future as one of the world’s most significant digital economies it is vital that we act now to ensure that people have the skills to take advantage of what is a huge growth sector. We must also pursue an independent trade policy that has digital at its heart whilst cementing our close collaboration with our European friends and partners.”

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