(Reuters Life!) - The direct value of the fashion industry to the British economy is nearly 21 billion pounds ($32.75 billion) according to a study released on the eve of London Fashion Week.

BritishFashionCouncil.com

The "Value of the UK Fashion Industry" report, commissioned by the British Fashion Council (BFC), defines the industry and analyses the economic value of Britain's fashion industry for the first time, the BFC said in a statement with the report's release.

It said that fashion's wider contribution to the economy in influencing spending in other industries, ranging from IT to tourism, was calculated as more than 16 billion pounds.

"This means that, including direct, indirect, induced and 'spill over' effects, the fashion industry's total contribution to the UK economy is estimated to stand at more than 37 billion pounds," the report said.

Fashion's direct economic contribution to Gross Domestic Product (GDP) was collated by analyzing the industry's profits and wages across a wide range of fashion products and items -- including womenswear and menswear through to handbags and shoes -- plus the contribution of fashion education, fashion marketing and fashion media.

The report also highlighted the pivotal role of cutting edge British design, and showcase events such as London Fashion Week -- which runs from Sept 17-21, in driving innovation and growth within the industry itself, as well as attracting millions of visitors from across the globe every year.

"British Fashion has the talent, creativity and skills to rival anywhere in the world," Minister for the Creative Industries Ed Vaizey said in the statement. "Our new and established designers and fashion labels are internationally renowned for their unique vision at the cutting edge of this hugely important global industry."

EVOLVING

Economic consultants Oxford Economics researched and wrote the report. It was funded by a range of cross-sector organizations including: the London Development Agency (LDA), UKTI, British Fashion Council, UK Fashion & Textile Association (UKFT), Aurora Fashions, House of Fraser, Debenhams, Land Securities, Marks & Spencer and New Look.

The report said that the fashion industry directly employs 816,000 people across a wide range of jobs and is the largest employer of all the creative industries.

As the 15th largest British industry out of 81, it is similar in size to the food/beverage services and telecommunications industries and bigger than the wholesale and retail of automotives, sports activities, chemical manufacture and advertising/video sectors.

Fashion is also evolving and innovating -- with growth in online fashion retail, sustainable clothing lines, as well as modern textile R&D and manufacturing products such as sweat-resistant sports fabrics, the report said.

Britain also has some of the best fashion colleges, designers and retailers in the world and events like London Fashion Week as well as a retail environment with highly desirable shopping hubs help to attract tourists.

The report follows the findings of industry-wide consultation and highlights how the industry encompasses a wide range of professions -- from designers to manufacturers, fashion retailers, magazine publishers, journalists, fashion marketers, lecturers and business managers.

Key challenges facing the sector include the lack of business skills among smaller fashion businesses, limited awareness of the diverse opportunities in the fashion industry amongst young people and career advisors, the impact of the recession and limited access to investment, the report said.

The report also touched on growing competition from other showcasing capitals in New York, Milan and Paris which have led to scheduling woes in the past for London Fashion Week.

BFC Chairman Harold Tillman said the report was just the first step to creating a detailed national action plan for the industry which will help to support future growth and success.

"Fashion is a great British success story and this landmark piece of research underlines its true scope and economic impact."