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The Digital Economy Will Become the Biggest Global Sector Soon

The Digital Economy Will Become the Biggest Global Sector Soon

The Digital Economy is measured by a thing called Standard Industrial Classification. This was actually devised in 1948!!!

So, hardy surprising that people are calling for a more relevant classification system.

Bigger Stats Than Thought

The July report from the National Institute for Economic and Social Research (NIESR) concluded that 471,000 companies probably make up the ‘digital economy’ rather than the less than 200,000 previously counted in official stats.

Why does it matter? Well, statistics about companies (their fields, payroll sizes and turnovers/taxes) are significant in determining the health of our national economy with a knock-on effect on our tax rates, national spending plans and deficit reduction targets.

The Daily Telegraph business pages editorial of 23 July said, the scheme should be modified so that ‘high-value, high-growth firms can be correctly identified and qualify for all the help they need from the government.They will also be correctly assessed by their banks and insurers.’

The NIESR report also discovered that digital enterprises are far wider spread throughout the country than the ‘hip clusters’ in London. Thousands of firms are forming because of the web and are doing well.

The average staff roll of a company is 20; the average for a digital one is 23. Now, 11% of the British workforce is employed through digital, rather than the 5% previously assumed.

Commentators are taking in the new stats, and confirming that companies everywhere need to have the fastest, most reliable broadband infrastructure – what Vince Cable called ‘world class’ – that we can possibly provide. We cannot afford not to.

No Separate Digital Sector

The report was created from a real-time database by Growth Intelligence which measures digital business activity. The Standard Industrial Classification requires most such companies to be designated as ‘Other’ because in 1948 nobody dreamed what would drive future economic growth. How could?

Since the early 1990s a myth has grown, that digital means start-up, probably failure and little if any profits. The reality is the complete opposite, with the ‘median digital company producing higher revenues than average.’

The main point about what we have discovered from these stats, is that no longer is there a separate slice of the national cake that you can say: ah yes, that’s the digital ones, alongside the chemicals, pharmaceuticals, transport, banking, public service sectors.

No, digital now permeates every single business field, every aspect of retailing, construction, health and social care, military, the arts, education, architecture, consulting, software, engineering, manufacturing, defence, transport and home life, so deeply that it IS the economy. And soon almost everything else will be periphery compared with its importance.

As ever with all new developments, but especially anything to do with the internet, social media, cybercrime and abuse, connectivity and copyright, government always take ages to catch up with what is actually happening. And when it does, the world has moved on yet again. We can only hope that that time lag is not going to prove too costly in terms of Britian’s global competitiveness…..

Posts to see:

In Cybercrime Defence, You’re Only As Good As Your Attackers’ Last Attempt, 17 June 2013

Do Digital Parasites Devalue the Currency of Creativity With Their Net Fakery?, 4 June 2013

Digital Currency Spells the End of Paper, Coin and Gold Backed Money, 14 May 2013

Broadband Infrastructure or Competition: What’s It All About? 7 May 2013

Doomsday Battle Looms for Absolute Control of the Cloud, 9 January 2013

London’s ‘Silicon Roundabout’ Provides a Carnival of Good News, 19 November 2012

Image: US NASA