At Last, the 1948 Show! UK government fails to recognise the existence of tens of thousands of digital companies.
Jul 24, 2013
This "news" is hardly surprising. Among many other things the coalition government also doesn't know how many people have been neglected, abused or even died in mismanaged hospitals, how many unoccupied houses there are across the land, how many illegal immigrants there are in the UK or where and how the records of millions of NHS patients ( including highly sensitive, confidential information) went adrift and disappeared forever - so why would it have reliable data on the high-tech companies it says are central to economic recovery?
According to its own classification and record-keeping system, which is based on SIC (Standard Industrial Classification), and was introduced 65 years ago, the government 'recognises' that there are some 187,600 'digital companies' in Britain. In it's report the NIESR brands the government's classification as "outdated" and says the powers-that-be simply miss and have no knowledge of many high-tech firms.
And the government estimates aren't out by a mere percentage point or two, they are out by a whopping 40 per cent. This means there are somewhere in the region of 270,000 so-called 'digital companies' in existence in the UK, not the 187,600 the government can discern through its begrimed pince-nez.
The report extrapolates from data sourced from Internet-compay tracking company, Growth Intelligence (GI). Tom Gatten, GI's CEO, comments, "This research demonstrates the need for a new way of understanding the economy, both for government and for businesses. Rather than relying on outdated codes or static lists, our new technology and internet data reveals new opportunities and insights for growth."
The report itself was actually commissioned by Google and Hal Varian, the Cookie Monster's Chief Economist says, "This is a groundbreaking and important report by NIESR not just because it shows that the spread of the digital economy into other sectors is driving growth and jobs throughout the UK but because - for the first time in 65 years - it presents us with a new way of measuring the economy."
And that's the point. Hitherto official statistics have used a very basic specification of what constitutes the digital economy based on a definition agreed when there was no such animal in existence. As a result, the NIESR report claims, tens of thousands of digital companies are being wrongly classified and so well be be missing-out on potential investment and other backing because investors who use government-provided, government-sourced information are precluded from identifying tens of thousands of investment targets.
So, the new research calls on the government to get with it and identify digital companies that are working in sectors including architecture, engineering and publishing where digital technologies are in widespread and constant use. As the report points out, digital technology "is no longer the sole preserve of start-ups and software companies."
GI 's system classifies companies in terms of products, activities and sectors and Dr. Max Nathan, a senior research fellow at NIESR, says: "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 around the country. 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.
What's more, revenue reported by digital companies is growing 25 per cent faster than that reported by non-digital companies and digital companies employ 15 per cent more staff than do those operating outside the digital sector.
in a thoroughly feeble response, an apparatchik at the UK's Office for National Statistics (ONS) said: "We are confident ONS statistics reliably measure the size and shape of the economy according to best international practice." He then adjusted his topper, hailed a hansom cab and trotted away for an early dinner of swan and chips preparatory to an evening's entertainment at Vauxhall Pleasure Gardens.
(By-the-by, At Last the 1948 Show was a UK TV comedy series made in 1967. It ran for only two series comprising of 13 episodes (of which only a few survive) and helped bridge the gap between the BBC radio series "I'm Sorry, I'll Read That Again" and Monty Python's Flying Circus on TV. It starred two of the future Python team, John Cleese and Graham Chapman and guest-starred Eric idle.)
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