Scottish firms 'slow to claim their share of internet opportunities'

SCOTLAND is failing to claim its share of the UK's £100 billion internet economy, the country's technology trade body has claimed.

ScotlandIS says firms north of the Border have been far slower to catch on to the opportunities offered by the internet, in particular e-commerce.

A report published by Google last week found that internet-based businesses now account for 7.2 per cent of UK GDP, making the internet a far bigger contributor to the economy than more traditional industries such as construction, transport and utilities.

The report produced for Google by the Boston Consulting Group said some 60bn is generated by online shopping and the cost of users' web connections and modems.

However, Polly Purvis, head of ScotlandIS, warned that Scottish firms are a long way behind when it comes to exploiting the internet.

Out of the top 20 websites in the UK, not a single one is operated by a Scottish company, Purvis said.

While many of the most visited websites belong to big brands such as eBay, Amazon and Argos, younger firms such as ASOS, the online fashion retailer based in North London and HotUKDeals, a discount website, also make the cut.

"We in Scotland have 10 per cent of the UK's population so we should have 10 per cent of the UK's top websites as well but we don't have that," Purvis said. "For every 1 we import we are exporting significantly more on the e-business front. For traditional industries that tends to be the other way around."

Purvis said the internet economy tends to be taken less seriously in Scotland and a lot of businesses still fail to use technology such as social media to their advantage.

"It (the internet economy] possibly isn't taken seriously because it's not understood," she said. "But this is one of the best ways to boost exports and get companies that aren't already exporting into international markets."

Scots entrepreneur Steve Leach, who founded digital marketing agency Bigmouthmedia, agreed that Scotland was lagging behind.

"Sadly there is some truth behind this," he said. "With the exception of the Scottish Government and agencies like VisitScotland, there are very few significant clients that we deal with in Scotland. Ninety-nine per cent of our client base is in England, Europe and global."

Leach said many firms have been caught out with the speed with which the internet economy has grown, particularly over the past few years."This is an industry that has popped very quickly and a lot of businesses are struggling to fully utilize what's going on right now," he said.

Donald McLaughlin, director of Cisco in Scotland, said the internet economy is an ideal way of driving growth at a time when other sectors are struggling under the weight of the public sector cutbacks.

He said the internet offers young firms, with a less established brand, the opportunity to compete with more established businesses as every company has equal access to potential clients - rather than on the high street where those companies that can afford the best sites do better.

"It represents a great opportunity, particularly at this point in time when a lot of the commentary is about growth," McLaughlin said. "For Scotland, a lot of the growth would be about driving the export market. The great thing about doing business online is getting the same footing as everyone else.

"Previously people would only have bought the more mundane things through the internet but that has changed completely now."

According to Hitwise, which compiles data on the internet, the most visited retail website in Britain is eBay UK, followed by Amazon UK and Argos. Google is the most popular website overall.