A London tech start-up has used real-time business tracking data to redraw the UK’s digital map in a new report co-authored by the National Institute for Economic and Social Research.
Instead of using the 65 year-old Government classification system, known as SIC codes, this report uses new data provided by Growth Intelligence, a fast-growing London-based sales software company, to measure the business environment by tracking digital footprints left by companies online.
The detailed report, commissioned by Google, also reveals just how far traditional sectors, such as manufacturing, architecture and engineering, have embraced digital technology.
The report shows:
âï¿½ï¿½ there are at least 270,000 companies that form the digital economy – far more than any Government estimate
âï¿½ï¿½ the revenue reported by digital companies is growing 25 per cent faster than that reported by non-digital companies
âï¿½ï¿½ on average digital employers hire three more people – 15 per cent more – than those employers who are not digital
âï¿½ï¿½ how companies in traditional sectors, from architecture to manufacturing, are using and relying on technology to run their businesses: digital technology is no longer the sole preserve of start-ups and software companies
âï¿½ï¿½ the areas with the highest concentration of digital companies are outside London and spread right across the country, in places like Aberdeen, Middlesbrough and Manchester
Official definitions only use basic sector information. Growth Intelligence classifies companies in terms of products, activities and sectors. This provides a much more detailed view of companies in the UK economy and allows us to spot digital companies working in ‘traditional’ sectors, such as software companies in architecture, publishing and engineering.
Britain’s out-dated business classification system means that hundreds of thousands of these kinds of digital companies are incorrectly identified by Government and financial institutions. With politicians, banks and insurers basing policy decision on SIC codes, it means that thousands of firms could be missing vital support.
Tom Gatten, chief executive of Growth Intelligence, said: “This research demonstrates the need for a new way of understanding the economy, both for Government and for businesses. Rather than relying on outdated codes or static lists, our new technology and internet data reveals new opportunities and insights for growth.”