Boom Predicted For UK Internet Industry

The UK's online industry is set to grow at an annual rate of 11%, according to a new report.

A study completed by The Boston Consulting Group reveals the UK is ranked top of all G20 nations in terms of the amount the internet contributes to its GDP.

It also shows that if the internet were isolated as a sector in its own right, then it would be the 5th largest in the UK; bigger than healthcare, education and construction.

But new internet start-ups often find it hard to find funding because banks are unwilling to take a gamble on what is seen as a risky area of business. Instead such companies often have to rely on so-called "angel investors".

James Gill, founder and chief executive of web analytics company Go Squared, said: "A lot of the fastest growing businesses right now are internet businesses.

"So many people at the banks just don't get that. It's why it's really important to have money coming in from angel investors, much like there is in Silicon Valley . It seems to be happening more and more over here in London and Europe."

The UK's geographical position makes it a very attractive place for companies to base themselves and for people to come and work.

"We can pull in talent from across Europe," said Tom Hulme, another internet entrepreneur.

"Indisputably there is some great talent, particularly from a development and engineering side, in Eastern Europe and we're seeing more and more coming to London."

The retail industry is learning just how important an internet presence is. Recent Christmas sales figures showed that those with the best websites performed better than rivals.

The UK is working, shopping, playing and sometimes just killing time online. But the UK is still some way behind much of Europe though and critics might argue that it will take a very long time to catch up the continent's leaders.

Ed Vaizey, minister for communication , said: "The best super-fast broadband in Europe doesn't just include the headline speeds, it also includes the cost.

"We have a very competitive telecoms market in the UK which means actually most people can access broadband at a decent price.

"That's a very important factor. There's no point having a super-fast pipe going past your house if you can't actually connect on to it."

Last week, the ten millionth .co.uk domain name was registered. When it comes to the internet, having the letters UK attached to your company name is highly desirable.