The UK digital identity sector is on a remarkable growth trajectory, with projections indicating it will reach the height of £4 billion in revenue by 2030. This insight, provided by the Office for Digital Identities and Attributes (OfDIA), highlights the sector’s expanding economic significance and its pivotal role in the UK’s digital economy. 

We’ll dissect this news, noting the important figures and key factors as well as discuss what it means for other businesses in the UK including digital identity service providers (IDSPs) who offer efficient, certified digital identity solutions for a vast array of businesses across the UK.  

Rapid Growth in Revenue and Employment in the Digital Identity Sector

In the 2023-2024 fiscal year alone, UK digital identity firms generated a substantial £2.05 billion in annual revenue. This figure not only showcases the sector’s current strength but also signals a promising future. The industry contributes £858 million in Gross Value Added (GVA) to the UK economy and supports 10,813 full-time employees. 

Employment within the sector has demonstrated consistent and impressive growth, averaging 11.7% annually over the past five years. This steady rise underscores the sector’s resilience and its ability to create meaningful job opportunities across the country. 

A Diverse and Dynamic Industry Landscape

Currently, 270 firms are actively operating within the UK’s digital identity market. Of these, 231 are specialised providers exclusively focused on digital identity solutions, while 39 are diversified companies that offer digital identity services alongside other business offerings. This blend of dedicated and diversified firms fosters innovation and competition within the industry. 

The geographical distribution of these firms is also noteworthy. Approximately half of the companies are based in London, reaffirming the capital’s status as a leading hub for technological innovation. Additionally, significant clusters exist in the Southeast (15%) and the Northwest, which, while comprising 9% of firms, accounts for 15% of employment in the sector. This regional spread highlights the sector’s national impact and potential for further regional development. 

Exceptional Productivity and Economic Impact

The sector’s productivity levels are particularly striking. The GVA per employee stands at £79,366, which is approximately 42% higher than the UK average across all industries. This figure reflects the high-value nature of digital identity services and the specialised skills of the workforce driving this industry forward. 

Such strong productivity indicates that the digital identity sector is not only growing in size but also in efficiency and economic contribution. This positions the industry as a key player in supporting the UK’s broader economic growth and digital transformation ambitions. 

Strategic Insights from OfDIA

The Office for Digital Identities and Attributes (OfDIA), officially launched in October 2024 under the Department for Science, Innovation and Technology (DSIT), is at the forefront of supporting and regulating this rapidly evolving sector. Recognising the importance of data-driven insights, OfDIA commissioned leading consultancies Oliver Wyman, Perspective Economics, and Projects by IF to conduct a comprehensive study into the sector. 

This research delved into the industry’s size, employment trends, and revenue generation, providing a detailed understanding of its current landscape and future potential. However, the exploration does not stop here. OfDIA has announced that further research is underway to investigate market adoption, growth opportunities, potential barriers, and consumer awareness of digital identity solutions. These findings are expected to be released in 2025, offering valuable guidance for stakeholders and policymakers alike. 

Good News for IDSP Providers

This news about the potential of the digital ID market can only be a good thing for digital identity service providers (IDSP)-certified businesses like Verify 365 who are elevating various sectors with technology platforms to enable businesses to validate ID documentation and verify their clients.  

To be a certified UK IDSP, businesses must meet the UK Government’s digital identity and attributes framework (DIATF). This means they offer a digital ID solution that is reliable, secure, trustworthy and certified by the UK government. With the digital ID sector set to boom and gain further investment and attention, IDSPs will be at the forefront and required by businesses needing to validate their clients’ identity documents or complete certain checks like right-to-work and right-to-rent.  

Verify 365, like many other IDSP-certified businesses are making a difference and enabling businesses to complete checks quickly and efficiently. With the sector continuing to evolve and elevate, IDSPs can continue to thrive with demand set to increase as the industry continues to grow. 

Future Opportunities and Sector Outlook

As digital transformation continues to accelerate across all sectors, the demand for secure and efficient digital identity solutions is set to grow exponentially. The UK is well-positioned to lead in this domain, driven by its innovative firms, supportive regulatory environment, and growing consumer demand for secure digital interactions. 

The projected £4 billion revenue by 2030 underscores vast opportunities for investment, innovation, and job creation. With ongoing research and policy development, the digital identity sector is poised to play a central role in shaping the UK’s digital future. 

In conclusion, the UK digital identity sector is experiencing dynamic growth, backed by strong economic performance, innovation, and government support. This vibrant industry is not only enhancing security and convenience for businesses and consumers but also driving significant economic value for the nation.