There are more technology firms in the UK than the government estimates, according to a new report.

Research by the National Institute for Economic and Social Research (NIESR) estimates there are almost 270,000 digital companies, 40,000 more than the 187,000 claimed by the government.

NIESR argues that the government’s classification of technology firms employs a basic definition of the digital economy, overlooking tens of thousands of companies with a digital revenue stream.

Hal Varian, chief economist at Google, said: ‘This is a groundbreaking and important report by NIESR not just because it shows that the spread of the digital economy into other sectors is driving growth and jobs throughout the UK but because – for the first time in 65 years – it presents us with a new way of measuring the economy.’

By extension, the findings by the NIESR imply a greater volume of IT graduate jobs in the UK than previously thought.

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