E-commerce and ICT activity, UK: 2011

Key issues specific to this release

This is the latest annual release about e-commerce and the adoption and use of Information and Communication Technologies (ICTs) by UK businesses published by ONS. The results in this release are in respect of 2011. The source of the information is the E-commerce Survey of UK businesses.

The Inter-Departmental Business Register (IDBR) was used as the sampling frame for the 2011 survey. The survey was sent to approximately 7,700 UK businesses with 10 or more employees, in the manufacturing, distribution and service sectors.

This statistical bulletin reports e-commerce activity by UK businesses, regardless of where the business’ customer or supplier is located, or whether the activity is with households or businesses.

National Statistics

The UK Statistics Authority has reviewed this publication in their report: Assessment of compliance with the Code of Practice for Official Statistics: Statistics on E-commerce and Information and Communication Activity which was published on 27 July 2010. This review recommended that the E-commerce and ICT Activity release be designated as National Statistics, subject to ONS carrying out certain requirements. ONS carried out the necessary work to comply with the requirements in this report and as a result, the UK Statistics Authority confirmed that this release has National Statistics status.

Classification changes

The 2011 survey was based on the Standard Industrial Classification (SIC) 2007. The estimates published for 2009 were the first to be published based on SIC 2007, which replaced the SIC 2003 classification system. The estimates in this release that relate to the 2006 and 2007 survey years are based on SIC 2003. Results for the 2008 survey were originally compiled and published based on SIC 2003, and have been re-estimated based on the new SIC 2007, to enable comparisons to be made with future years.

There were changes to the e-commerce questions asked in the 2008 survey, which impacted on the published results. The Internet/non-Internet split of e-commerce transactions, that had been included since the survey began, were discontinued after the 2008 survey. This split was replaced with a breakdown of website and non-website transactions. The historical e-commerce estimates, broken down by Internet and non-Internet sales, are still available on the ONS website in the 2008 E-commerce and ICT Statistical Bulletin. As a result of the changes to the measurement of e-commerce, this release provides estimates of the values of e-commerce from 2008 onwards.

Until the 2007 survey, the definition of e-commerce sales and purchases included transactions over manually typed email. From the 2008 survey onwards, this changed and email transactions have been excluded. This means that e-commerce sales published in this release are not directly comparable with estimates previously published for 2007 and previous years.

Quality Improvement to the estimation of e-commerce sales values

Prior to this release, estimates of the values of e-commerce sales have been calculated using Annual Business Survey (ABS) total turnover data from the previous year. This method has been used since the e-commerce survey commenced in 2000. The only exception to this rule are data for 2008, which, when revised in 2009 to take account of the change from SIC 2003 to SIC 2007, were revised using ABS data for 2008. When the survey was initiated, the impact of using ABS total turnover from the previous year was not obvious, as the values of e-commerce in particular, and the economy as a whole, were growing each year. However, this changed, most notably, with the onset of the recession in 2008/09.

ABS results used to be published approximately 14 months after the year end, meaning that the previous year’s ABS data were the latest available at the time of finalising the e-commerce results. Due to improvements to the timeliness of ABS estimates, and through enhancements to the systems used to produce estimates for this release, it is now possible to use ABS data from the relevant survey year to derive estimates of e-commerce sales. This change will serve to produce more accurate estimates of e-commerce sales, as it means that the estimates of e-commerce reported by businesses are now applied to rates of turnover, from the ABS, from the same year that they relate to.

The following table shows the impact this change has had on the estimates of the values of e-commerce.

The table shows how the 2009 estimates are lower than they would have been, while the 2010 and 2011 estimates are higher than they would have been, if the change had not been introduced.

Common pitfalls in interpreting the series

This report should not be confused with the Internet Access Household and Individuals statistical bulletin. This is a separate release that contains estimates on Internet access and use of the Internet, by households and individuals, not by businesses.

Uses of the data

This bulletin provides information on the values of e-commerce sales, and the use by businesses of various types of ICT. In some cases, growth over time can be seen where ICT use has been measured on a comparable basis in previous years. Examples of this include the measurement of ICT activities such as Internet access, broadband and websites. Results are presented by business employment sizeband. This allows comparisons of the levels of e-commerce trading and ICT activity to be made between different sized businesses.

Eurostat is the primary user of the statistics. The UK provides statistics to Eurostat measuring business use of ICT and e-commerce activity, in accordance with Regulation of the European Parliament and Council 808/2004. These estimates are used to provide information that is consistent with other European Union (EU) member states, as part of progress towards measuring EU benchmarking indicators. These EU indicators compare the development and use of ICT in the EU member states, and help to provide a better understanding of the adoption of ICT and the Internet by businesses at an EU level.

ICT is considered as critical for improving the competitiveness of European industry and, more generally, to meet the demands of society and the economy. Broadband is considered to be important when measuring access to, and use of, the Internet. Broadband offers users the possibility to rapidly transfer large volumes of data and keep access lines open. The take-up of broadband is a key ICT policy-making indicator. Widespread access to the Internet, via broadband, is regarded as essential for the development of advanced services on the Internet, such as e-business, e-government or e-learning. Since 2005, the EU policy framework for ICT has been the i2010 initiative called ‘A European information society for growth and employment’ which seeks to boost efficiency throughout the EU economy by means of the wider use of ICT. Having undergone a mid-term review, an updated i2010 strategy was presented in April 2008, addressing key challenges for the period 2008-2010.

Do you make use of our estimates of e-commerce and ICT activity? If yes, we would like to hear from you (ecommerce@ons.gov.uk) and understand how you make use of these statistics. This may enable us, in the future, to better meet your needs as a user.

International context

A comparable survey is run in all countries of the European Union (EU) and also in some non-EU countries. The measurement of e-commerce and ICT activity by businesses is under continuing review and development. Eurostat plays a leading role in this and each year leads a process whereby the data requirements for the survey are reviewed and updated. Comparative data for EU countries can be found on the Eurostat website.

Results published by Eurostat in relation to the 2010 survey showed the UK to be near the top of the EU table for the proportion of total sales that were derived from e-commerce. In July 2011, ONS published a summary of how the UK results compares with the rest of the EU (38.8 Kb Pdf) .

Estimation

The estimates of the proportions of businesses are weighted to be consistent with the number and profile of businesses in the UK economy. Results weighted by number of businesses give an equal weight to business irrespective of size. This method of calculation reflects the greater number of small businesses than large ones. Therefore, estimates of proportions of businesses in 'All sizebands' are likely to be closer to the estimates for the 10 to 49 employment sizeband, than for the 1000+ employment sizeband.

Coverage

The provision of the results to Eurostat is a requirement set out in EU Regulation 808/2004. The survey collects the data necessary to meet this requirement. The estimates in this release relate to those sectors of the economy where coverage is required by Eurostat, under the terms of the Regulation and it should therefore be noted that the survey is not intended to provide full coverage of all UK ICT and e-commerce business activity.

The survey covers businesses within the following economic sectors, according to the Standard Industrial Classification (SIC) 2007.

Manufacturing: Divisions 10-33;
Utilities: Divisions 35-39;
Construction: Divisions 41-43;
Wholesale: Divisions 45-46;
Retail: Division 47;
Transport and Storage: Divisions 49-53;
Accommodation and Food Services: Divisions 55-56;
Information and Communication: Divisions 58-63;
Other Services: Divisions 68-74, 77-82, 95.1.
The sectors of the SIC 2007 not covered by the survey are as follows:
Section A Agriculture, Forestry and Fishing;
Section B Mining and Quarrying;
Division 75 Veterinary Activities;
Section O Public Administration and Defence, Social Security;
Section P Education;
Section Q Health and Social Work;
Section R Arts, Entertainment and Recreation;
Section S Other Service Activities except SIC 95.1, Repair of computers.

Estimates in this release relate to businesses with 10 or more employees. No information is collected relating to businesses with fewer than 10 employees as these are not within the coverage requirements defined by Eurostat. Until the 2004 survey, businesses with fewer than 10 employees were included in the survey, due to a specific user interest from the then Department of Trade and Industry (DTI). When this user interest ended the coverage of these businesses was discontinued, leaving the coverage from 2005 onwards as being just what was required by Eurostat under EU Regulation 808/2004. The decision to cease collection of information from these businesses was made on the grounds of resources available to run the survey and the burden placed on the businesses in requiring them to take part in the survey.

Since the DTI interest in monitoring businesses with fewer than 10 employees ended, no other specific user interest in their activity has been identified. A user survey conducted in April 2011 did not receive any feedback requesting the resumption of coverage of this group of businesses.

It is not possible to estimate what the current survey results would be if the businesses with fewer than 10 employees were still covered by the survey. However, in 2004, the last year that these businesses were included, ONS estimated that their sales represented 6.6% of total sales over the Internet. Until the 2004 survey, these businesses also had lower proportions of ICT adoption and usage than the larger businesses. This meant that estimates of the proportions of "all businesses" carrying out an ICT activity were lower in the 2004 results than in the 2005 results and onwards, when "all businesses" were defined as businesses with 10 or more employees.

Revisions to earlier years

As in previous years, estimates are subject to revision. In this release the 2008, 2009 and 2010 estimates have been revised.

Sampling variability and confidence intervals

The estimates in this release are subject to sampling variability, as are those from all sample surveys. The following confidence interval tables show estimated 95% confidence intervals for selected estimates relating to e-commerce and ICT activity. The estimates come from survey data and so have a degree of statistical error associated with them. Confidence intervals are an indication of the reliability of the estimate; the smaller the interval, the more reliable the estimate is likely to be. With regards to ‘95% confidence intervals’, we mean that if we repeated our survey 100 times, 95% of the time (95 times out of 100), the true population value would fall within the range of these confidence intervals.

Imputation

No imputations were made for contributor or item non-response, as all data items on a business’ completed questionnaire have to pass validation checks before being included in the survey results. The only exceptions to this are where, under certain conditions, a missing value data item was estimated based on other contributors in the same employment size band and SIC. For this to take place, the business had to have returned all non-value data items and all these items had to have passed the validation checks.

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