Tim Pike.
The internet’s share of UK retail sales is – at 12% – the highest in the developed world. In my daily conversations with businesses and services, I find that some sectors are responding much more nimbly to the competition from internet retailers than others. In this blog I argue that the growing share of internet retailing is likely to reduce business investment, especially in buildings, but the additional capacity associated with internet retailing is likely to be a drag on retailers’ profitability that may last for many years. In my view the long-term effect on capital productivity should be positive, but the effects on labour productivity are less obvious and may be adverse.