A new report reveals that data-driven companies are vital in driving UK economic growth.
UK-based data-driven companies (DDCs) generated an estimated £343 billion in annual turnover (6% of total UK turnover), contributing £84.9 billion in GVA to the UK economy through their total employment in 2023.
The findings are based on detailed research and analysis by the Government’s Department for Science, Innovation and Technology (DSIT) using market data supplied by leading scale-up data company, The Data City. The study set out to define and estimate the scale and distribution of data-driven UK companies.
The study outcomes are expected to support targeted policies on increasing data activity to stimulate the UK economy further. The data findings also aim to answer the ‘value of data’ question by estimating the economic contribution of data-driven companies to the UK.
Specialised and diverse DDCs provide services encompassing data infrastructure like cooling, storage, hardware, and software. Diverse DDCs offer energy management services, maintaining smart grids, producing smart meters, and monitoring energy consumption using AI and IoT. Despite heavy data utilisation, these companies’ registered SIC codes range from engineering to telecom services.
Diverse DDCs often offer agency market services with embedded data use and analytics, including public communications, advertising, or call centre services. Dufrain, Actian and Beyond are just a few examples of growing, innovative DDCs.
Over 80% of the £343 billion turnover achieved by UK DDCs, is generated by large DDCs inside the London, South East and East of England regions.
The findings of the research and analysis of the UK data-driven market also reveal that there are 9,600 active, VAT-registered DDCs in the UK, of which 5,500 offer specialised data infrastructure or software development services and 4,100 offer more diverse data consultancy or management services.
The DSIT study shows that DDCs are more likely to be based inside the London, South East and East of England regions than outside it, with an average of 5 in every 1,000 businesses in these regions being a data-driven related company.
The £84.9 billion (3.8%) contribution DDCs add in GVA to the UK economy through their total employment is more than double the GVA contribution of the telecoms sector (1.5%) but smaller than that of all digital sectors (7.2%).
The report also highlights that as a rapidly growing sector, DDCs employed 1.5 million people (5% of total UK employees) in all types of roles in 2023, similar to the digital sector, which had 1.9 million filled jobs in 2022.
Large DDCs are bigger employers than large businesses in general, with 90% of DDC employees working for large companies compared to 56% of total UK employees.
The Data City’s platform, which generated all the required data collated and analysed by DSIT to produce the final report, provides real-time company data on emerging economic sectors. It uses AI technology to gather data from various sources, including open data sets and company financials. The platform is designed to help users make discoveries quickly and easily.
Its successful UK platform already comprises a database, of over 5.3 million UK companies and 350 real-time industrial classifications (RTICS). Researchers, policymakers, and investors use it to access real-time data on dynamic sectors and the companies operating within them. In addition to working with DSIT, The Data City works with global businesses, including Lloyds Banking Group and The Royal Academy of Engineering.
Alex Craven, CEO of The Data City, said: “By adding almost £85 billion in GVA through their total employment, DDCs are an increasingly vital part of the UK economy. Present in nearly all sectors of the economy and overlapping with AI and cyber security, the influence of DDCs as an emerging sector is evident and growing.
“DSIT’s study findings are highly relevant for formulating policies which aim to target data-driven companies, as they are more likely to be affected and adopt data policies. Although we’ve successfully identified the DDC landscape, their economic contribution, and which sectors of the UK economy are data-driven, more research will be required to understand further how much investment these companies contribute towards data.”
