Skip to content

Analytical Report Defining and measuring the UK digital economy

July 2025

The digital economy covers many interconnected yet distinct fields. This study introduced a new framework to better understand the size and condition of the UK’s digital economy.

Commissioned by the Department for Science Innovation and Technology (DSIT) Cambridge Econometrics, together with The Innovation and Research Caucus and The Data City:

  • Developed a revised over-arching definition of the UK Digital Economy based on Standard Industrial Classification (SIC) codes, making it compatible with Office for National Statistics (ONS) data. The definition extended previous approaches by identifying tiers of digital activity for improved clarity.

  • Added a web-scraping and keyword-based method to this definition, helping to pinpoint sectors, technologies, and groupings within the Digital Economy that SIC codes alone cannot identify.

At the foundation of their analysis was the creation of an initial database at the enterprise level, enabling a clearer understanding of where digital activity sits across the UK economy and how it contributes to growth, productivity and employment, essential for effective policymaking. 

DSIT
Read full report

Defining and measuring the UK digital economy

Download PDF

Key findings

The UK’s digital economy is large, diverse, and highly productive (2024). Evidence across sources shows 311,800 enterprises currently active in the Digital Economy contributing £286.3bn GVA—about 13% of the UK total—and employing nearly 3 million people. Productivity is 57% above the national average. This matters because it positions the digital sector as a key engine of national economic growth and resilience. As a result, policy and investment decisions must account for both its scale and its differentiated subsectors to capture further productivity gains.

London and neighbouring regions (the South East and East of England), account for almost two-thirds (58%) of UK Digital Economy enterprises.

The refined two-tier digital economy framework addresses measurement gaps and enhances policy relevance. Supplemented by web-scraping and keyword analysis, the framework enables more accurate identification of digital subsectors and strengthens the evidence base for digital policy and investment decisions. Ongoing refinement will support deeper insights into frontier technologies.

Enterprise-level integration of datasets confirms the Digital Economy’s substantial national contribution. The synthesis of sources such as IDBR, RTIC, and UKRI demonstrates significant GVA and employment impacts, reinforcing the sector’s central role in the UK economy. Future analysis should include longitudinal tracking to monitor sector dynamics.

Stringent quality assurance enhances the reliability of digital economy estimates. Cross-validation of official and alternative datasets, coupled with independent expert review, ensures methodological rigour and increases confidence in outputs for policy and planning. Maintaining these robust QA processes will be essential as new data sources and technologies emerge.

Get in touch

If you would like to discuss this study and how the innovative framework can be applied to better understand the size and condition of the digital economy within of your sector or local economy, please contact Adam Brown.

Blog headshots

Adam Brown

Head of UK Economic & Social Policy

t: +44 (0)1223 533165

e:alb@camecon.com

View profile