The internet is worth a staggering £121bn to the UK economy, equating to around 8.3 per cent of its GDP, making it one of the most advanced G20 nations using the internet, according to a report by analyst firm Boston Consulting Group (BCG).
The firm's Connected World report also said that the internet will contribute £225bn by 2016 the UK economy, growing at a rate of 10.9 per cent, more than Germany at 7.8 per cent and the US at 6.5 per cent.
The internet economy for all G20 nations will be worth $4.2trn by 2016.
"The internet economy offers one of the world's few unfettered growth stories," said Paul Zwillenberg, a BCG partner and co-author of the report.
"Policymakers often cite GDP growth rates of around 10 per cent per year in the developing markets, but they look past similar rates close to home."
The report also noted the importance of SMBs in driving this growth of the internet economy, noting that those that took advantage of technologies to improve marketing, sales and interactions with customers saw revenues grow by 12 per cent.
This compared to four per cent from those noting taking advantage of the internet.
David Dean, senior partner and co-author of the report at BCG, said this should be a wake-up call to firms to ensure they are making the most of the internet.
"Around the world SMBs which embrace the internet are growing faster and adding more jobs than those that don't. By encouraging businesses to adopt the internet, countries can improve their competitiveness and growth prospects," he said.
Google's UK managing director Dan Cobley, welcomed the report as more evidence of the UK's ability to innovate using new technologies the internet enables.
"This report is massively encouraging and shows that the UK internet is leading the world in e-commerce," he said.
"At a time of financial uncertainty, the UK Internet economy continues to grow at an incredible rate, creating thousands of new businesses and jobs."
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