New analysis shows the importance of a booming tech sector to UK economic growth
A new paper today lays bare the importance of the tech sector to the UK economy as The Growth Commission launches a monthly monitor of that sector’s contribution to economic growth.
The most recent official data suggests that the tech sector is critical to UK economic growth, but the scale of its contribution is less certain because definitions of the sector vary.
Today’s Growth Commission paper, The Tech Sector in the UK economy: Understanding its critical contribution to economic growth – written by Commission member and author of The Flat White Economy, Douglas McWilliams – finds that using an output-based measurement, the tech sector accounted for 26% of growth in the last twelve months; while using a turnover-based measurement, it can be calculated to be as much as 35%. The paper also calculates annual productivity growth of 3.8% for the sector.
Growth Commissioner Douglas McWilliams said:
“There’s no doubt that the tech sector is very much driving the UK economy. Even on a narrow definition, it was responsible for one quarter of GDP growth in the past year – effectively punching four times above its sectoral weight.
“But on a broader measurement – what I call the Flat White Economy definition, after the drink enjoyed in the coffee bars of East London by so many in the sector – its contribution to service sector turnover growth is as much as 35%. And because the service sector accounted for more than the whole of GDP growth in the year to Q1 2026, it would not be unfair to claim that tech’s contribution to GDP growth on this definition is 35%, more than one third.
“This shows the importance of this sector underpinning the future of UK growth – and how it is vital that policies permitting the growth of the sector continue.”
With this in mind The Growth Commission will be paying particularly close attention to the tech sector’s fortunes over the coming months, publishing a regular UK Tech Monthly Monitor to track all the relevant data.
