Investment in digital technology will see a £232 billion boost to the UK economy by 2040, representing a 6.9 per cent increase in GDP, according to research.

The new study by Virgin Media Business and the Centre for Economics and Business Research (CEBR), which explores how more digital ways of working can support the UK’s economic recovery from Covid-19, also found that investment in tech could boost the economy by £74 billion in 2025.

By the end of the decade, sustained digital investment will increase UK GDP by £127 billion, a 4.4 per cent overall increase.

Detailed sector analysis reveals that, despite the rapid shifts many businesses have already made in response to the Covid-19 pandemic, there is still a major digital opportunity for organisations right across the economy.

According to the research, digital processes in the public sector will generate efficiency gains and cost-savings which, when invested in improved services and new infrastructure, could create a boost worth £75bn by 2040.

It also found that investments to digitalise health and social care could be worth £33 billion while transforming justice, central and local government could be worth a further £32 billion to the national economy.

The impact of investment could be worth an additional £40 billion in 2040 to the retail, professional services and construction sectors.

“After the toughest of years, the UK has a £232bn opportunity ahead of it which we must now grasp with both hands,” said Peter Kelly, managing director, Virgin Media Business. “By continuing to invest in new digital ways of working, we can seize this moment and help UK businesses to bounce back better.

He added: “Moves to accelerate digital adoption are driving extraordinary outcomes across private and public sector organisations, helping them to revolutionise how they work, deliver for customers, and provide vital services for our communities. Through investing in our digital future we will support new growth, drive the UK economy forward and help the country to rebound stronger.”

Cristian Niculescu-Marcu CFA, director of economic analysis, at Cebr, commented on the findings: “The Covid challenges facing the UK and the entire world are extremely serious. The economic impacts alone fall far short of capturing the scale of the pandemic’s toll on people’s lives and wellbeing.

He added: "Focusing on the economic implications however, history shows us that periods of economic hardship can help to catalyse technological progress and adoption, as businesses and other stakeholders seek to adapt to new realities. Within this research we have examined the potential economic impact of a wave of digital transformation, driven by the rollout of new ways of working and connecting. This could create an economic high road over the coming decades, helping the UK economy to grow while also having the flexibility to deal with future challenges."

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