Internet economy is key to the UK’s recovery

Online businesses account for 8.3 percent of Britain’s economy, but we can expect even stronger future growth from the sector.

This is according to Gary David Smith, co-founder of Prism Total IT Solutions, reacting to a new report from the Boston Consulting Group: “Britain’s online businesses generated more than £121 billion for the UK economy in 2010, which is the equivalent of about £2,000 for each individual and a much bigger contribution than from the healthcare, construction or education sectors.

“Future growth of internet sales will impact particularly on SMEs, who often base their businesses around a web presence. It is the growth to these companies that will create the new jobs that our economy so desperately needs.”

Research published by the BCG indicates that internet sales to SMEs have increased by a yearly average of 12.5 percent over the last three years; 13.5 percent of all UK sales were completed online, and the group expects that figure to rise to 23 percent by 2016.

The UK’s online sales are growing much faster than other developed economies. BCG predicts growth of 5.4 percent to America’s online sales and 6.9 percent for China.

“I would inject one note of caution. New, thrusting young businesses are often looking for efficiencies right from the start, and we are seeing a tendency to be over-reliant on cloud computing,” Gary continues.

“We preach that the cloud should be viewed as a complimentary service to a company’s business infrastructure, not a replacement for it. Not having control of your own data can cause problems for businesses dependent on online sales.

“No doubt many of the problems with the cloud will be addressed over time and, for some businesses, the benefits of the cloud still outweigh these disadvantages. However, businesses need a rounded picture before making costly decisions which will affect the accessibility and security of their data, decisions which will move them a step further away from control of their business operations and towards being dependent upon a cloud service provider.”

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