BRIGHTON’S billion-pound digital economy is “punching above its weight”, a new study has found.

It is outstripping top university cities Oxford and Cambridge in developing virtual reality and artificial intelligence technology.

The city is ranked fourth in a new index highlighting the size and success of digital industries around the country and their potential for growth.

Brighton ranked particularly strongly in its innovation for data, virtual reality, health and artificial intelligence despite being relatively smaller than its competitors.

Reading, whose digital economy is reckoned to be ten times Brighton’s, was ranked only 11th in comparison.

Brighton and Hove was ranked in or just outside the top ten in seven of the eight categories in the UK Tech Innovation Index with only manufacturing holding the it back where it was placed only 30th out of 36.

The city’s digital economy is estimated to be equal to its tourism sector, accounting for more than one in seven jobs and supporting more than 12,000 employees earning on average more than £44,000.

More than 200 digital start-up companies were formed between 2011 and 2015 in the city. One in five is considered a high-growth company.

The city is considered a focal point for the UK’s digital industry and has attracted comparisons to San Francisco.

The index compiled by the Open Data Institute (ODI) and Digital Catapult using data on tech events, conferences and meet-ups was used to draw up the league table along with information from academic publications, local skills measures, business start-up rates and research spending.

Phil Jones, Wired Sussex managing director, said: “The results of the new Tech Innovation Index demonstrate that Brighton is one of the leading digital cities in the UK and home to a growing and thriving tech sector.

“Our ambition is for Brighton to build on its reputation as a hotbed for digital talent, a tech hub for businesses and a centre for innovation.

“The Digital Catapult Centre Brighton, led by Coast to Capital, is at the heart of this ambition and offers a way for creative and tech start-ups and small and medium enterprises to develop and share digital innovations, working with each other, as well as universities and large businesses.”

Tom Forth, head of data at ODI Leeds, said: “Our results are largely as expected, with large cities such as London, Manchester and Glasgow performing strongly and well-known over achievers such as Edinburgh, Cambridge, and Brighton punching well above their weight.”