Britain’s 'flat white economy' today 28% bigger than country's manufacturing sector

Britain’s "flat bright white economy" is now 28 % bigger than the country’s manufacturing sector and the most important driver of UK growth, based on the Centre for Economics and Business Research.

The rise of digital and imaginative businesses that define the flat white sector - a nod to just how start-ups save well on property costs by working out of coffee shops - is indeed significant that it might now contribute the just about all to the country’s gross domestic product, said the Cebr.

“With digital technologies permeating an increasing share of economical activities, the boundaries between tech and non-tech sectors happen to be beginning to blur. On some definitions the flat white economy could nowadays be almost all of GDP,” said Douglas McWilliams, deputy chairman of the Cebr, who first coined the word in his book The Flat White Economy, released in March 2016.

Mr McWilliams' observations on the tech-enabled sector particularly make reference to the types of businesses clustered around the “Silicon Roundabout” in east London.

These include education firms and the ones specialising in creative disciplines, and arts and entertainment, marketing, general market trends, telecommunications, and scientific research and development.

When he first published the book five years back, Mr McWilliams surmised that digital and creative businesses were as vital that you the UK economy mainly because the tech development sector.

“My second point was that the important factor generating the growth of the sector was migration. Skilled young people come to the UK for fun as well as jobs and wrap up stimulating the ingenuity of everyone else dealing with them,” Mr McWilliams explained.

Since that time the sector’s share of the UK economy has continued to go up.

“On our traditional, industry-based definition the sector has got risen from about 10.5 % of GDP in the first half of the 10 years to 12 % in early 2020,” Mr McWilliams said.

“Meanwhile manufacturing has fallen from about level pegging with the smooth white economy to about 9 % of GDP over the same period.”

Mr McWilliams cautions that not all tech-working with sectors are included in its definition, with Fintech excluded because it is still considered a part of finance.

“But it doesn’t appear silly to think that about 15 % of UK GDP currently is heavily predicated on tech,” he said.

Nevertheless, he warned that the Covid-19 pandemic features struck at the heart of this economy because it has lowered the incentive to move to cities.

To help the sector grow even more, Mr McWilliams said it'll need a extra user-friendly immigration insurance policy to help attract talent.

“The fitness of the flat white economy is crucial for jobs growth and for the GDP growth that generates tax receipts,” he said. “Without it we would be in a mess.”