The UK is Europe’s most “advanced digital economy”, report finds

The UK is the most advanced digital economy in Europe, according to new research.

A report from the Computer & Communications Industry Association (CCIA) Research Center and Public First described the UK as a leading destination for investment, startups, global tech companies, and tech businesses of all sizes.

The UK’s digital economy directly supports over 2.6 million jobs with an average pay of £45,700 per year – 37% more than the UK average, according to the report.

In total, the study found the digital economy and online retail support £227 billion in economic activity.

Similarly, through indirect support of businesses that use digital products and services, the UK’s digital sector adds a further £113 billion in gross value to the overall economy and supports another 1.6 million jobs.

"These findings reveal that the UK’s robust tech sector doesn’t just benefit the companies at the top – its success contributes massively to the country’s workers, businesses of all sizes, and the wider economy across the UK," said CCIA chief economist and research center director Trevor Wagener.

"The data is clear: a healthy UK tech industry means a healthy UK economy."

The UK houses the offices of many leading AI companies, including Google DeepMind, Anthropic, and OpenAI, the report noted, specifically highlighting the growing potential of the country’s burgeoning AI sector.

In 2022, the UK tech sector also boasted the third largest amount of venture capital investment at $30 billion, ranked only behind the United States and China.

Inward investment is also impressive, according to the CCIA. Investment from global technology firms such as Amazon, Google, Meta, Apple, and Microsoft has continued to grow in recent years. 

In November 2023, Microsoft announced plans to invest more than £2.5 billion in AI infrastructure. The sweeping investment from the tech giant will fund the creation of next-generation AI data centers across the country.

The CCIA also noted that the UK has one of the most mature digital markets on the consumer side, with widespread adoption in areas such as online retail, the gig economy, and fintech.

On a regional level, there are 19,700 digital jobs in Manchester, 18,600 in Glasgow, 17,000 in Leeds, 15,600 in Bristol West and 29,700 across Reading West and Reading East.

UK government’s tech approach given seal of approval

The CCIA specifically highlighted the UK government’s digital efforts as key success in recent years. 

According to the report, the UK has one of the most advanced digital governments in the world, second only to Korea, thanks to initiatives such as the Government Digital Service (GDS), Gov.uk, the G-Cloud framework for the purchase of cloud-based services and the Cloud First policy.

G-Cloud alone, it said, has generated over £1.5 billion in commercial benefits for the public sector in the ten years since it was launched.

"It is brilliant to see the continued dynamism of digital businesses in vibrant clusters around the UK. Whether we are talking about home-grown startups or the UK’s outsized role in global technology ecosystems, Brits should be proud of the role they play in the international digital economy," said CCIA UK senior director Matthew Sinclair.

"If we are careful about regulation and other big choices facing the country in the coming decade, there is every reason for our strength in technology, the media and other digital sectors to be a lasting source of national economic vitality."