Company Data: Real Time Industry Classification as a solution to the limitations of SIC codes.
In every piece of public economic analysis, there is a disclaimer, a waiver of responsibility, a confession of inadequacy:
“However, as stated within the project methodology, SIC codes are intended to reflect broad sectoral definitions, and their limitations are well recognised for seeking to capture the extent and contribution of.”
A modern Government Industry Report.
The Limitations of SIC Codes
This definition lays out three key issues to be aware of when using SIC classification company lists to identify organisations that operate within a sector.
The first is that the current classification system is hugely outdated. Defined before the technological explosion at the end of the century, the data lacks important detail in areas like Information Technology and Advanced Manufacturing.
The second; it has no QA in relation to accuracy and credibility. Collected at a company’s inception, it is usually the accountant or financial lead who declares what a company does and it is never checked or confirmed.
Lastly, it lacks real-time granular detail of an organisation’s sector, service and success. It is slow, inaccurate and everyone says – “it is no longer fit for purpose”.
But any company data is better than no company data and specialist consultants are experts at mitigating these shortcomings with experience, time and effective engagement techniques that mean reasonable intelligence on the size, shape and activity of a sector supply chain has been manufactured across a range of reports, infographics and economic sound-bites.
Using Technology to Define the Supply Chain
Modern technology is best served in removing the human limitation that maintains barriers to better results and we are at the start of the next great data revolution in regards to the accurate classification of company activity.
Using machine learning to facilitate the ’heavy lifting‘ of validating company data and matching just under 1 million company URLs to their financial data, has created the ability to collect real-time information on the self-declared nature of these organisations, their trading location, their diverse or non-diverse specialisms; a completely new granular level of company data that – for the first time – removes the limitations of SIC code classification when mapping a sector, comparing a region or identifying a market.
Working in Collaboration
The Data City, a spin-off from ODI Leeds and one of the UK’s brightest A.I. start-ups, consulted the UK Department for Business, Energy & Industrial Strategy (BEIS) and the Knowledge Transfer Network (as well as a range of public and private experts) to define the first ‘RTIC codes’.
These codes provide Real-Time Industry Classification that maps out new and emergent sectors such as Immersive Content, Cyber Security, IoT, Smart Cities, Circular Economy as well as timely detail on areas such as the Creative Digital sector, Advanced Manufacturing and Photonics.
By bringing together these industry leaders across a range of disciplines, the taxonomies and categorisation applied to the data will give the first ever view of the complete supply-chain, from the lower Tier sub-contractors that create the components all the way to the Tier 1 OEM’s that manufacture and assemble the final products.
For the Digital Space, we will define the level of diverse and non-diverse service provision, tracking the increased value from the developers and innovators as it moves through the technology enabled service providers.
We will be releasing information on the first 5 RTICs over the next week or so, focusing on political priorities and bringing together steering groups to create the best company lists for these and many new and as-yet undefined sectors:
- Cyber Security
- UK Craft (Makers)
- A.I. and Machine Learning
- Advanced Manufacturing
- Advanced Materials
- IT Services
For more information on these, the technology being used or the ability to become part of the next RTIC code, contact us.