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Digital economy in Hull and East Yorkshire worth almost £7bn and employs 57,000 people, report reveals

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The digital economy in Hull and East Yorkshire is worth almost £7bn and employs 57,000 people in the region, according to a new report.

The report reveals the results of a comprehensive research project which has identified the huge scale of the economic impact of digital activity locally and underlines the area’s growing reputation as a digital hotspot.

The report was published today by communications provider KC which commissioned the research to establish, for the first time, the size and impact of the digital economy in Hull and East Yorkshire.

The research conducted by specialist technology analysts Innovation Observatory found:

  • The digital economy in Hull and East Yorkshire accounts for £6.93bn per annum (24 per cent of the total local economy).
  • It employs 57,600 people (22 per cent of total employment locally).
  • The local digital economy grew by 5.5 per cent in 2014, compared to growth in the total UK economy of 2.6 per cent.
  • Companies that are more active in the digital economy have grown faster than the average and expect to continue to grow faster.
  • The strength of the region’s digital capability is contributing to business success locally.
  • The local digital economy has “clearly benefited” from KC’s deployment of its ultrafast Lightstream broadband network. 

KC managing director Gary Young, who is also chair of the Humber Local Enterprise Partnership (LEP) Digital Sector Group, said: “This research shows for the first time the huge impact of digital activity on the local economy.

“It also underlines the area’s credentials and advantages as a digital centre of excellence. Digital is a major opportunity for the region as a whole and for businesses across all sectors within it.”

The research has revealed significantly higher values for the scale of the digital economy in Hull and East Yorkshire than previously estimated. This is because it is based on a broader definition of the digital economy, reflecting that digital activity is now a significant part of many businesses.

The research defined organisations as contributing to the digital economy if they use the internet and/or connected technologies to interact or trade with consumers or businesses. It then measured the proportion of activity within organisations that could be defined as digital.

Researchers surveyed 271 local organisations of all sizes and across many sectors in Hull and the East Yorkshire, with findings from this work supported by extensive cross-checking of modelling assumptions against data sets and estimates generated by the government and other agencies.

The report found a key factor in the growth in the region’s digital economy was superfast broadband, with many respondents citing KC’s multi-million pound investment in its Lightstream fibre broadband network.

Hull is the only city in the UK where broadband officially described as “ultrafast” – delivering download speeds of at least 100Mbps (megabits per second) – is being rolled out as standard. KC’s slowest service for businesses offers 250Mbps, while its fastest delivers 1Gbps (gigabit per second) – the fastest service available in the UK.

Survey respondents said superfast broadband was “absolutely integral”, a “massive enabler” and an “absolutely key foundation on which the whole digital economy proposition depends”. Respondents with Lightstream reported a higher proportion of their revenues came from the digital economy.

Looking forward, the report concludes the future growth of the local digital economy is dependent upon:

  • The continued rollout of faster digital connectivity.
  • Availability of people with appropriate digital skills.
  • Vision and understanding of the digital economy within the bodies that have responsibility for local economic development.
  • Promotion and marketing of Hull and East Yorkshire as a good place to do digital business. 

Mr Young added: “As well as producing robust figures for revenues and employment in the local digital economy, this research has also highlighted a number of key issues and opportunities to address in order to support further growth. It’s important that decision-makers focus on these issues to ensure the region’s digital potential is fully developed.

“The research also underlines how important superfast connectivity is to business growth in the digital age and it is encouraging to see that, among the survey sample, businesses that use Lightstream reported faster growth than other companies that were surveyed.

“The results support our belief in the transformational impact of Lightstream upon the local economy and the major competitive advantage it is delivering for local businesses.”

Today’s report is the latest evidence of the importance of Hull and the wider region as a leading centre for digital technology.

Earlier this year Tech City UK’s Tech Nation report featured Hull, East Riding and Northern Lincolnshire as one of the top 16 UK digital clusters, while Hull has also joined other northern cities to form the TechNorth alliance to support significant public and private sector investment in digital businesses.

Companies that contributed to the research said the results underlined the importance of digital activity to business growth and highlighted a major opportunity for the region.

Richard Tuplin, sales and operations director of consultancy insurance business Jelf Insurance Partnership, based at Priory Park, Hull, said the business had “moved rapidly into the digital age”, with a huge switch to online ways to connect with clients and using digital technology to drive internal efficiencies.

He said: “We’re not a sexy, creative company but we do work within the digital economy. Having a digital infrastructure and focus is an enabler of excellent customer service, competitive pricing and a fantastic claims handling service. It enables us to stay current, stay ahead of our competitors and grow.”

Mr Tuplin, who is also chair of the Humber Local Enterprise Partnership (LEP) Business Forum, said the region needed to promote itself more effectively as a place for investment in digital business.

“We are very business friendly in the Humber region and we have a wealth of talent that wants to invest in and nurture the digital sector, so if you want to start a digital business this is the right place to do it.”

Jonathan Leafe, managing director of Hull-based marketing agency Strawberry, said digital activity within his business had doubled every year for the past 10 years and now accounted for up to 80 per cent of its output. Over the past year Strawberry has also moved 95 per cent of its business systems into the cloud, enabled by KC’s Lightstream ultrafast broadband network.

“Fundamentally every business is a digital business or will have to be a digital business. If they aren’t, they won’t stay in business,” he said.

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