Big data finds 70,000 'hidden' companies in UK Information Economy - Business Works
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Big data finds 70,000 'hidden' companies in UK Information Economy

Dr Anna Rosso, Research Fellow, NIESR Harnessing the 'Industrial Internet' is the next 'industrial revolution', with Big Data at its core. The UK must make sure it does not get left behind as other nations seize the opportunities it offers. Use of non-traditional or unstructured data sources and scraping / mining / learning tools is growing rapidly and has great potential to close knowledge gaps, bring research closer to policy and provide rich detail on fast-changing aspects of the economy says Dr Max Nathan and Dr Anna Rosso, Research Fellows at NIESR.

According to our new research using 'big data', published with Francois Bouet at Growth Intelligence, we set out alternative counts of firms in the Government's 'Information Economy' industries and compare them to estimates using conventional industry codes. It shows that the UK's Information Economy industries could be 42% larger than current estimates, with at least 70,000 extra ICT-producing companies in operation and hotspots around the country.

Dr Max Nathan, Senior Research Fellow, NIESR

Industries and products typically evolve faster than much conventional data can match. This creates problems for policymakers who want to understand growing fields like the Information Economy. The Government's 2012 Industrial Strategy identifies the Information Economy - defined as telecoms, software, computer and electronics manufacturing, and IT services - as one of seven key sectors for the UK. Ministers have developed an Information Economy strategy to help firms grow and are promoting tech clusters around the country.

We worked with data developed by Growth Intelligence to plug some of the gaps in current policy knowledge. The Growth Intelligence dataset covers the entire population of active UK companies. Using public administrative data, observed information and modelled variables built using machine learning techniques, we developed a 'sector-product' map of Information Economy firms and employ text mining to explore key features.

Our key findings are:

  • The largest numbers of Information Economy companies can be found in London (58,248 companies), Manchester (7582), Guildford and Aldershot (6172), Birmingham (5384) and Luton and Watford (4578).

  • Information Economy firms are most clustered in the West of London and 'Travel to Work Areas' like Basingstoke (LQ 1.84), Reading (1.78), Newbury (1.68), Milton Keynes (1.54), and Swindon (1.51). However, we also found hotspots around the country such as Brighton (1.53), Cambridge (1.46), Middlesbrough (1.38), Coventry (1.35), Edinburgh (1.22) and Blackpool (1.20).

  • Large cities have less local clustering because of their diverse economies, yet more detailed analysis of larger cities shows that they act as 'nurseries' for Information Economy start-ups. Five of the top ten postcode sectors for Information Economy start-ups are located in central London.

These findings should help national and local government understand the characteristics and growth potential of Information Economy firms across the country. It is also important for the research community, as it provides a 'proof of concept' exercise highlighting both pros and cons of big-data driven analysis.

The findings are significant as they show that the UK's information economy is larger, more established and perhaps more resilient than popular perceptions. Our analysis suggests a diffusion of digital platforms and products out of computer hardware and software into other parts of the economy, such as business services and engineering.

UK policymakers must invest in big data techniques

Big data can shine a light on real-world economic shifts that are moving ahead of current administrative data and classifications. Just as it is disrupting industries, technological change is disrupting how policymakers track and measure the economy. Our study shows how important it is that UK policymakers invest in big data techniques to understand the most fast-changing and dynamic sectors of the economy.

The research paper entitled 'Mapping 'information economy' businesses with Big Data: findings for the UK' is published by NIESR and Growth Intelligence and was funded by Nesta. For more information, please visit:

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