In our pursuit of delivering the most insightful data possible, we have recently released an update to our proprietary Innovation measure. This update is underpinned by some important changes to the methodology, which we introduced in our initial release.
Firstly, the update is based on our latest and most enhanced company data, which encompasses even higher quality company website text.
Secondly, continuing to leverage the power of the latest XBRL-formatted company accounts, we have fine-tuned our R&D extraction technique, resulting in an even higher quality output.
In doing so, our database now encompasses R&D intensity data, quantified in pounds per employee, for 980 UK registered companies. This represents a 20% increase when compared to that of our previous release, an improvement which negates the previous requirement for supplementary data from the European Commission’s innovative companies.
Of these companies, we have determined 231 to be demonstrating evidence of high innovation, offering a comprehensive foundation for our refined classifier.
With the improved training data, the output of our updated classification has a sharper focus.
As such, we have observed a notable reduction in the number of companies falling within each of the three confidence levels for innovation. Specifically, those with a rating of 1-star or higher have decreased from 550,000 to 150,000, while 2-star or higher companies have decreased from 100,000 to 20,000, and the category of 3-star or higher companies has seen a decline from 12,000 to 2,000.
However, the output remains an estimation. Determining a company’s level of innovation solely through its website is a challenging task for humans, and it’s unreasonable to expect a computer model to do much better. Additionally, we acknowledge that R&D intensity may not always serve as a perfect indicator of innovation.
We are still eager to collaborate with partners to gain access to national innovation study microdata, which would substantially enhance our methodology. Until then, we urge customers to continue to use our Innovation measure whilst exercising caution, viewing it as a valuable tool when generating long lists, rather than a definitive measure.