The £232 billion opportunity

How Covid-driven digital change could transform the UK economy


Where do we go from here?
Download the CEBR Report to Find Out

Hard times tend to spark innovation. And 2020 was no exception.

Lockdown pressed fast forward on digital change all over the country, in almost every industry. 

For some this meant rolling out technologies and systems that were already in the plan. For many it was uncharted territory. But organisations everywhere rose to the challenge. 

The result?

A decade’s worth of progress in just a few months. 

That got us thinking.

What is the value of all this innovation? And how would that value add up if we looked at the economy as a whole?

We asked the Cebr (Centre for Economics and Business Research) to help us answer these questions and more.

The numbers tell a simple, powerful story. 

GDP could increase to £74 billion above the baseline scenario by 2025 thanks to boosted investment and fast adoption of post-Covid digital transformation.


By 2040, that figure could be £232 billion – a 6.9% increase in our national GDP.

As a country, we have an enormous opportunity here. 

Investing in digital projects will undoubtedly help organisations like yours thrive in the wake of this pandemic.

But it will also help our whole economy bounce back faster and further.


Centre for Economics and
Business Research, 2021

“Automation in computers and IT looks set
to transform the world of thought just as the spinning jenny transformed manual
labour in the Lancashire textiles industry.”


The bounce back starts here

Boosting the UK Economy

Boosting the UK Economy

This report is not about how quickly the economy recovers from the impact of the pandemic.

Instead, it is about the potential positive impact of digital transformation on that recovery when it does happen.

We know organisations that invest in digital transformation programmes sooner will see benefits sooner, and those benefits will accrue across the economy.

At the same time, those investments will also increase productivity.

The Cebr report estimates productivity gains of

  • 17% - from flexible working and working from home
  • 28% - from digital delivery of services
  • 90% - from machine learning

When scaled (e.g. due to the numbers of jobs affected) this results in a generic Covid-accelerated digital transformation coefficient of 11.9%.

And when combined with specific digital adoption curves and rates of re-investment the report estimates that such digital transformation programmes could add £74bn to UK GDP by 2025 - a 2.8% increase. This rises to £127bn by 2030 (4.4%) and £232bn by 2040 - an increase of 6.9%.


Increase in UK GDP by 2040


Private sector growth

Private sector growth

Increased investment in digital transformation projects will lead to increases in productivity.

Some of that output will, in turn, be re-invested. And the gains of that investment lead to higher GDP from the year that the investment is made.

In short, the sooner the digital transformation projects start, the sooner the benefits will be felt across the economy, and the bigger long-term impact they will have.

When we look in detail at three private sector categories (construction, professional and retail services and retail) we see a total digital transformation uplift of around £40bn in 2040.

Within those three categories, we see the biggest expected rise in retail - a 6.2% gain as the sector truly embraces digital transformation and benefits from it.


Digital transformation uplift for construction, professional and scientific services and retail


Public sector re-investment

Public sector re-investment

The model for estimating the impact of digital investment in the public sector is different, because the public sector doesn’t re-invest in quite the same way the private sector does.

Productivity gains generated by digital transformation projects can generate savings, however, and the model does assume that the government will use these savings to refocus public spending on projects to boost long term prosperity.

When applying a standard 0.1% public sector investment output elasticity the boost to GDP attributable to public sector investment is £75bn across health and social care, education and public administration and defence.


Private sector gains attributable to public sector investment


How Covid-driven digital change will boost the UK Economy

Between 2020 and 2040, UK GDP could grow by £232bn (or 6.9%) above the predicted baseline, according to Cebr research.

Impact of post-Covid digital transformation

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Public sector investment :
£75bn boost to the UK Economy


Private sector investment :
12% boost to productivity


Benefits across the UK

Local Authorities

Local Authorities

Councils nationwide have initiated or advanced transformation programmes to generate real benefits to residents and local businesses, staff and their wider communities.



From a massive rise in remote consultations through to connecting brand new hospitals in record time, healthcare has introduced changes that will now be permanent.



New technologies now provide instant access to real-time information, from when products will arrive on site to how many people are in a building at once.



Digital innovation in retail has the potential to transform the sector, speeding up processes and broadening distribution opportunities.

Professional Services

SMEs and Professional Services

Moving SMEs and professional services from an office-based infrastructure to a cloud-based one generates benefits for staff and customers alike.


The Methodology

The methodology is centered on producing a cumulative economics delta between a baseline scenario, in which there is no accelerated adoption of digital transformation initiatives, and a scenario in which there is.

The research considered a number of modelling inputs to estimate the productivity impacts of various forms of technology to derive the ‘Post Covid-19 Digital Transformation’ technology uplift coefficient.

This coefficient is then scaled to reflect the proportion of the workforce to whom it applies.

The model also estimates the rate of technological adoption across different sectors and a rate of re-investment.

All of the estimates are rooted in a detailed literature review.


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