The UK internet boom that blows apart economic gloom

Gloomy economic data do not reflect Britain's status as a digital success story. It's time to change.

Does anyone understand what’s going on in the UK economy anymore? I ask this question because for some while now, it’s seemed that the official numbers for gross domestic product don’t compute, and in particular that they are failing adequately to capture very high levels of growth in the digital economy.

DANASHCROFT2: Excellent article!

s-i-a: "A recent study for Google by the Boston Consulting Group says Britain is now the biggest e-commerce market in the world in per capita terms and the second largest online advertising market." So there is no excuse for Google not paying taxes on all of that UK revenue then, is there?

johnlocke:  You pay tax on profit, not revenue, you silly sausage.

Hugh Small: Tony Dartford asks below: "If something is free does it add value to the economy?" Yup, it sure does. GDP is not a sales figure, it's a value added figure. If firms make the same sales figures but get their inputs free where before they cost, then value added goes up. Profit goes up. GDP goes up. Tax yield goes up. Everybody seems to think 'demand must go up' for economic growth. Untrue, and as Prof Haskel shows, the unmeasured economy is mostly dedicated to getting the cost of input down rather than getting the value of sales up. And I might as well add that you heard the truth about Prof. Haskel's work first here: Why don't the govt and opposition  stop slagging off the UK economy? 

chalon: At last, people are begining to get it. Thousands of us hardly ever visit a shop nowadays. Pay for parking to shop, that's all in the past.

SB_UK: Exactly; towns're too busy and kids too irritating to make traditional shopping possible.

GreatBrithole: 'Does anyone understand what’s going on in the UK economy anymore?' Yes Jeremy. Successive governments have been conducting a 'closing-down firesale' (everything must go!) for the enrichment of everyone except the ordinary citizen, who ironically paid for all of the stuff that's for sale and doubly ironically, are the least equipped to take advantage of the firesale prices due to being cleaned-out by the aforementioned governments and their cohorts across the chunnel. That's what's going on in the UK economy - it's being wound down ready for closure at which point the elite, after having lit the blue touch-paper, will move Eastwards to observe the great reset in the West from a safe distance.

paulweighell: "being wound down ready for closure at which point the elite, after having lit the blue touch-paper" Piffle. Your inference is unproven. Where is this touch-paper and where is your evidence of who if anyone lit it?

steamkettle: What a paranoid and emotional absurdity. The evidence presented doesn't conform to Marxist dogma so you trot out the old 'elite conspiracy' line.

GreatBrithole: It's no more absurd than your absurd assertion. My point of view doesn't conform to whatever stupid dogma you prefer so you trot out the old 'Marxist conspiracy' line whilst presenting no logical basis for doing so. At least I have expressed a point of view rather than trying to tear down someone elses for no provided logical reason whilst failing to offer an alternative point of view. 

dogtrader: May I ask, who are the "elite"? 

hcdevine: Nice try, Jeremy, but it's all rooted in fantasy and false hopes. The Internet helps reduce costs and add efficiency and adds a very small amount to exports but it is not a "boom" nor will it ever be for the UK. In the US which is far more developed with respect to the Internet there were the same rumours 5-6 years ago but then when MIT and a few others who actually know something about the Internet looked into the facts lo-and-behold the king had no clothing… and that's in an economy which has been 3-4 years ahead of the UK for this entire Internet era and where the Internet is far more deeply entrenched. The UK has a highly risk averse culture and no forgiveness for failure: an Internet-based economy must have both. You have foundations and drinks parties for innovations but when the dust settles down and everyone goes back to work innovation is dead because no person no matter what age who has great ideas and the drive to follow them through is going to stay and live in a class conscious country with labour, housing, infrastructure and fuel costs that are so high and so little manufacturing capacity. The UK does not even have the bandwidth to have much of an Internet business community except for the most superficial of websites.

tomm: Sorry but the USA is NOT more developed with respect to the internet than the UK, or indeed any country in Europe. I live equal amounts of time in both countries and it's generally way behind in download speeds and what services are available online. I don't know a single person in California that does their supermarket shopping online, for example, because their supermarkets simply don't offer that service. And as for anything like the BBC iPlayer, forget it. It's cheap and easy and convenient to do a lot of things in the USA but the general quality of what's on offer  is usually lower than in the UK.

Anth2305: We would probably be able to speed up the process even more if people and local government in this country tolerated the cheap and quick option of festooning even many very nice none rural areas with ugly overhead cabling, as seems to be a common practice in North America, instead of compelling utility companies, wherever possible to take the more expensive and slower route of putting put it underground.

itzman:  We tried that and the diddicoys nicked it all. Thieving pikey bastards!

beech: Could you give some examples of where the UK is behind the US, internet-wise? Also, it could be argued that the only things steam engines did were help 'reduce costs' and 'add efficiency' and add 'a very small amount to exports'. Same with stone, bronze and iron tools. And horseless carriages. P.S. Has any society ever not been 'class-concious'?

Anth2305: "Could you give some examples of where the UK is behind the US, internet-wise?" Slide the mouse pointer on a country to get an up to date average Internet speed.

YouKnowNowt: Is the link intended to show the UK well ahead of the US in download speeds, and getting further ahead as BT rollouts fibre optic?

Anth2305: Yes.

steamkettle: One in the eye for all the 'we're doomed' merchants peddling their misery in these blogs. Well researched article with plenty of supporting evidence.

fungustrotter: Well said