World Economy

Does Google Really Add $46b to UK Economy?

Does Google Really Add $46b to UK Economy?Does Google Really Add $46b to UK Economy?

A new report by Deloitte suggests Google’s good for the UK , no matter what European (or Russian) regulators think.

For a totally not evil company, Google gets a pretty hard time from governments. First it falls foul of Brussels bureaucrats on the antitrust beat, then it gets a new UK anti-avoidance tax named after it (albeit informally) and now it even has that paragon of fair competition, Russia, complaining about its domination of Android devices–potentially demanding 15% of its profits in the country to boot, NewsNow reported.

Tired of this bad rep, Google paid Deloitte to write a report measuring the positive impact it has on the British economy. The (rather wide-ranging) headline figures: businesses using Google products support or generate at least £11 billion ($17 billion) and possibly over £30 billion ($46.24 billion) in economic activity here, and are responsible for between 216,000 and 542,000 British jobs.

“Google is a growth engine for British businesses large and small, helping them to unlock their digital potential,” said Google UK and Ireland MD Eileen Naughton. “Our technology helps companies be discovered by new customers, boosts productivity by helping teams collaborate better, and helps content creators get paid for their creativity.”

Deloitte compiled the data from publicly available sources, rather than a direct feed from Google, and attempted to estimate the search giant’s total impact on other businesses, including ‘ripple effects’ on supplier and consumer demand.  

Broken down, it found that £11-28 billion of economic activity was generated from the ad spend of UK businesses using Google Search and AdWords in 2014 (supporting 210,000-530,000 jobs), while the impact of publishers hosting adverts through Google’s Adsense was £243-545 million (5,000-10,000 jobs). Content creators on YouTube generated £55-105 million (1,000-2,000 jobs).

Deloitte said UK revenues for the app industry, meanwhile, totaled £4 billion last year, supporting 380,000 jobs, without breaking down exactly how much of that corresponded to devices using Google’s Android operating system.

Even if only half of those revenues were from Android users, though, that still gives an upper-end total of well over £30 billion–and that’s not even counting the productivity impact of services such as Google Docs and Gmail, or the start-ups it supports in its campus or indeed its direct employment of 3,900 people in Britain.

In either case, these are pretty big numbers. But the report is definitely not saying that we’re £30 billion better off because of Google. To understand how much better off we actually are, we’d need to imagine a world without Google, which Deloitte recognized was beyond the scope of its report.