According to a new study, the UK has a much larger digital economy contributing to the overall economy, than believed by the government in the country.

The new study by the National Institute of Economic and Social Research (NIESR) said that the digital economy is about 40 per cent larger than previously believed. It found that there were a total of about 270,000 digital companies in the UK compared to only about
188,000 estimated by the government.

The study said that the government still follows a decades old classification system that excludes companies in business and domestic software, architecture, engineering and technical consulting from the overall digital economy. The study is based on data provided by Growth Intelligence, which tracks digital footprints left by companies online.

Max Nathan, a senior research fellow at NIESR, said, “Policymakers have identified the digital economy as one of the UK’s key economic strengths. That means they need to be aware of the true numbers of digital businesses. The old image of tech businesses as start-ups that make no money is out of date too: using big data we show a broad array of active businesses selling digital products and services.”

The report also found that the digital companies were recorded 25 per cent faster growth in revenues than non-digital firms in the UK.