The region’s digital, or data, economy is expected to rise from £3.6bn to £4.6bn in the next seven years, growing at its current rate of 4.7 per cent.
However, if businesses used data more effectively, the figure could rise by an extra £300m to £4.9bn, according to data centre operator Digital Realty. This would make the region’s data economy bigger than the East Midlands, North East, Wales and Northern Ireland, it said.
The data economy includes the storage, retrieval and analysis of any data that produces value for businesses, such as analysing information for marketing purposes. It is worth £73.3bn to the UK economy as a whole, with Yorkshire contributing five per cent.
Rob Coupland, managing director EMEA, Digital Realty, which commissioned The Data Economy report, told The Yorkshire Post: “Historically, Yorkshire has grown at a slightly slower rate than the UK as a whole, probably because people haven’t focused on how technology can help some of the traditional sectors that are important to the region’s economy.”
The Data Economy Report, compiled by economic consultancy Development Economics, reveals that the UK is tapping less than two-thirds of the potential value of its data.
Nationally, the largest contributors to the data economy are the ICT, financial services and professional services sectors, accounting for 64 per cent. In Yorkshire, these include gaming companies like Grand Theft Auto creator Rockstar Games in Leeds and Red Kite Games in Huddersfield.
Meanwhile, York is one of eight cities in the country to show above average employment in the technology sector, putting it on a par with places like Manchester.
Now, traditional businesses are starting to realise the financial gains that using data can unlock, according to Mr Coupland.
Some Yorkshire farmers are using soil sensors to understand pesticide levels and soil conditions, which lets them finely tune what they are putting on to the fields, leading to higher yields for their crops.
Mr Coupland said: “There are some great examples but there is also a lot of untapped potential in the regions.
“The investment that is being made in superfast broadband in North Yorkshire is a great example of the kind of investment that a region needs to make to really harness this. It puts Yorkshire in a great place to unlock more potential.”
He added: “If businesses focus on three or four key areas, we will be able to accelerate the data economy significantly over the next five-10 years and create huge new value.”
Continued investment in new technologies and big data management from businesses is key along with national infrastructure and training investments from government.
“Businesses need to think of ways to apply technologies into traditional businesses,” Mr Coupland said.
“Using data to optimise and drive extra value out of sectors like farming is really important.”