As discussed in ‘Understanding Industries & Sectors’, defining sectors is often fraught with difficulties, not least due to differences of opinion on which activities fall within a given sector. This is especially true of the so called digital sector. A distinction is often made between the digital economy and the digital sector, recognising the fact that many ostensibly non-digital businesses still engage in digital activities, whilst many digital businesses also engage in non-digital activities. The definition used here aims to capture the digital sector and is broadly congruent with the definition used by the OECD.
Digital technologies contributed £223m (GVA) to the Somerset economy in 2016. This represents 2% of the county’s total economic output, which is 0.42 times, or less than half the national average. If we look at the contributions from Somerset’s lower-tier authority areas we see that £91m is contributed by activities in South Somerset, £56.7m in Taunton Deane and £43.3m in Mendip, in each case roughly half the concentration seen at the national level. In Sedgemoor and West Somerset both the contribution and concentration of digital technology activities is much smaller. Sedgemoor contributes £26m from digital technologies, 0.26 times the national average, whilst West Somerset contributes just £6.4m, 0.18 times the national average.
This sector accounted for roughly 4,155 full-time equivalent (FTE) jobs in 2016. As with economic output this is 0.49 times, or roughly half the national average. 38% of these jobs (1,579) were in South Somerset, 25% (1,048) were in Taunton, 23% (945) were in Mendip, 11% (457) in Sedgemoor, and just 0.3% (125) in West Somerset.
Measured as GVA per FTE job, productivity in this sector in Somerset in 2016 was £53,740, narrowly higher than average productivity for the county at £50,460. At the national level, productivity in this sector is 32% higher at £71,120. Whilst we know there to be a gap in productivity between Somerset and national averages across all activities, in part accounted for by higher wages in London and the South East of England, in 2016 that gap was 14%, much smaller than productivity gap for this sector in particular. In 2016, productivity was lowest for this sector in Mendip (£45,760) and highest in South Somerset (£57,600) and Sedgemoor (£56,880).
Source: Economic Model for Somerset and the Heart of the South West (HotSW) LEP, 2018