Research and analysis

Digital and Technologies Innovation Statistics – Technical Report

Published 4 June 2026

1. Summary

This technical report accompanies the Digital and Technologies Sector Statistics publication, a novel release that uses company-level data to produce economic, financial, and innovation statistics.

The innovation statistics presented include estimates of patents, Innovate UK awarded funding and number of academic spinouts for the Digital and Technologies (D&T) sector.

2. Sector Definition

This release adopts a dynamic, company-based definition of the D&T sector, rather than relying on Standard Industrial Classification (SIC) codes. This approach is intended to better capture the cross-cutting and fast-evolving nature of D&T activities, which are often poorly represented within SIC codes.

The D&T sector consists of 107,082 companies, structured around 2 components:

1. Frontier technologies (10,972 companies) – 6 priority technology areas identified in the Digital and Technologies Sector Plan in June 2025.
2. Digital (96,110 companies excluding overlaps with frontier technologies) – a set of companies comprising the wider digital component of the D&T sector.

DSIT has developed company-level sector definitions, referred to as company lists. These lists identify in-scope companies directly, rather than inferring sector membership from SIC codes. Each frontier technology area has an associated company list, and together with a corresponding list for the digital component, these are combined to form an overall D&T company list.

This definition is DSIT’s preferred definition of the D&T sector. For more detail on its construction and limitations please visit: Digital and Technologies Sector Statistics – Sector Definition.

3. Data Sources

This section details the data sources used to derive statistics on innovation for the D&T sector.

3.1 Choice of Datasets                                           

To produce innovation statistics for the D&T sector, administrative data sourced directly from the organisations that collect and maintain these records were selected to produce the innovation statistics. These data sources are detailed in sections 3.2, 3.3 and 3.4.

Using data taken directly from the original collecting organisations improves confidence in both data quality and in the methodology used to produce the figures. It also avoids relying on data that has been copied, re-formatted, or combined elsewhere, which can lead to small differences in coverage or definitions. Overall, using this data supports more consistent matching across datasets and more reliable estimates.

3.2 Innovate UK Awarded Funding

Innovate UK (IUK) publishes data on all publicly funded awards made by IUK, covering grants awarded since 2004. As the UK’s national innovation agency, IUK is a primary channel for business-led R&D funding.

The dataset includes funding from core IUK programmes funded by UK Research and Innovation (UKRI) and Department for Science, Innovation and Technology (DSIT), as well as managed programmes funded by other government departments and delivery of the Horizon Europe Guarantee.

It provides a near-complete view of public, business-facing R&D grant funding and is updated on a monthly basis. Project-level information includes the value of the award, the recipient organisation, and other organisation-level variables.

Further information is available on the IUK methodology.

3.3 Intellectual Property Office Patent Filings

The Intellectual Property Office (IPO) is the UK government body responsible for intellectual property (IP) rights, including patents, designs, trademarks and copyright.

The IPO patent filings dataset captures information on each patent filed at the IPO by UK companies, including details on the patent’s characteristics and technical classification, the decision on whether the patent was granted, and (where applicable) reasons why a patent is no longer in force, alongside other organisation-level variables.

3.4 Higher Education Statistics Agency Spinout Register

The Higher Education Statistics Agency (HESA) Spinout Register is an official dataset providing a record of active UK university spinouts, defined as a company created to commercialise intellectual property originating from a UK higher education provider.

Developed by HESA in partnership with Research England and the University of Cambridge, the Register represents a step-change in the quality and completeness of data on university commercialisation.

Further information is available on the HESA methodology.

4. Methodology

4.1 Matching Company Registration Numbers

To produce innovation statistics from the datasets described above, each record was matched to the new, company-list-based definition of the D&T sector. This matching was carried out using the Company Registration Number (CRN) as a unique identifier, as it is consistently available across all datasets.

CRNs are issued by Companies House and comprise an 8 digit number linked to a specific company. However, CRN-based matching has limitations for businesses with multi-company organisational structures, such as holdings and operating subsidiaries. The implications for this are discussed further in Section 5.2.

CRN matching is preferred for this exercise because the main alternative, matching at the level of wider enterprise groups, is more complex to implement and requires additional data on ownership structures that aren’t consistently available across the datasets used. Matching on company name alone is also possible but carries greater risk and typically results in lower match rates, for example due to differences in capitalisation or the use of abbreviations (e.g. Limited vs Ltd).

4.2 Innovate UK Awarded Funding Analysis

Innovate UK (IUK) project and participant records were matched to the D&T sector definition using CRNs, consistent with the approach described in Section 4.1. For this release, 2024 data was chosen as the most recent complete calendar year available at the time of analysis.

IUK funding was then analysed using the published awarded-funding records for each project. The full value of each award was assigned to the project start year to provide a consistent rule and avoid making assumptions about how funding is profiled over the life of a project.

The IUK dataset reports the award amount agreed at the point the project is set up (i.e. the committed award value), rather than the total amount ultimately paid. Therefore, the statistics in this release describe awarded funding commitments to D&T companies, not final expenditure. This distinction is important because final spend can differ from the original award due to factors such as project amendments, delivery changes, or early closure.

Records where a participant had withdrawn from a project were excluded from the funding totals. Withdrawals are rare and typically occur where an organisation can no longer continue to participate (for example, where the business ceases trading during the project). Excluding these cases reduces the risk of overstating support provided to the D&T sector.

4.3 IPO Patent Analysis

Intellectual Property Office (IPO) patent records were matched to the D&T sector definition using CRNs, consistent with the approach described in Section 4.1.

IPO patent microdata includes records for applications and grants. For this release, the most recent complete calendar year of data (2024) was used, as 2025 data was only available for January to July at the time of analysis.

Patents were counted only where the application was granted, and counts were assigned to the filing date (rather than the grant date). Although a patent becomes legally enforceable only once granted, the filing date is used here because it establishes the applicant’s priority/novelty position and starts the standard 20-year term.

Patents were also required to be in force at the point at which the dataset was accessed for this analysis. Applications were excluded where the ‘reason not in force’ field indicated that rights had been withdrawn or otherwise ceased. Where no reason for a patent not being in forced was recorded as ‘NULL’, the patent was treated as still being in force and retained in the analysis, reflecting the fact that the majority of patents in the dataset remain in force.

4.4 HESA Spinout Register Analysis

Spinout records from the HESA Spinout Register, as of April 2026, were matched to the D&T sector company definition using CRNs, consistent with the approach described in Section 4.1. This was used to identify which companies in the D&T sector are recorded as university spinouts, and to produce statistics on the number and proportion of D&T companies that are academic spinouts.

5. Strengths and Limitations

This section sets out the main strengths and limitations of the approach used to produce the D&T innovation statistics, including how the sector is defined, how records are linked across datasets, and how the resulting indicators should be interpreted.

5.1 Using Company Lists

Using company lists is a key strength for measuring activity in fast‑moving and emerging D&T activities, where innovation does not map cleanly to SIC codes and businesses often operate across multiple SIC codes. This approach provides more targeted coverage of relevant businesses than SIC‑based definitions.

However, company lists are produced using web‑scraping, machine‑learning, and expert validation, and are sensitive to underlying assumptions. They represent a snapshot in time and require regular updating to reflect business entry, exit, and changes in activity; as a result, historical comparisons may be affected by changes in list coverage.

For this release, the latest available lists for each frontier technology have been combined to create a single frontier technology company list. As these lists span different time periods, some newer market entrants may be excluded. In addition, differences in internal company classification frameworks across DSIT sector studies mean that some statistics may include non‑D&T activity, particularly where firms are highly diversified.

The methodology for identifying frontier technology companies will continue to be refined in future releases. Further information on the D&T company list is available at: Digital and Technologies Sector Statistics – Sector Definition.

5.2 Data Linkage and Attribution

Key strengths of this approach are the use of business-level administrative data and a transparent method (CRN matching), which enables consistent matching across datasets, supports analysis within a common sector definition, and makes the production of the statistics more reproducible. However, CRN matching links activity to a specific legal entity, which can be a limitation where businesses operate through multi-company structures (for example, where a holding company and operating subsidiaries have different CRNs). In these cases, innovation activity may be recorded against a different CRN than the one included in the sector company list (or vice versa), which can affect how activity is attributed to the D&T sector.

5.3 Interpreting Indicators

The statistics in this release should be interpreted as a set of indicators of innovation activity rather than a complete or holistic measure of innovation across the D&T sector. The choice of indicators was informed by the availability of administrative data at the required business-level granularity and by the fact that different metrics capture different parts of the innovation process. Indicator suitability also varies across the wide range of industries within D&T; for example, patenting can be a more informative measure of technological outputs in some research-intensive areas than in software- or service-led activities where innovation may be less likely to be patented. As such, patent counts represent only one proxy for innovation activity, as not all innovation results in patentable outputs and firms vary in their intellectual property protection.

A further limitation of the patent measure is that it covers only patents filed with the UK Intellectual Property Office (IPO) by UK companies. It does not capture international patent applications made through routes such as the European Patent Office (EPO) which are commonly used by UK businesses. As a result, the statistics presented here represent a partial view of patenting activity and are likely to understate the overall level of patenting among D&T companies.

In addition, there is typically a lag between patent filing and grant. As this analysis includes only patents that have been granted, more recent applications may not be reflected in the data. This will be particularly relevant for newer firms whose applications are less likely to have been processed. As a result, the measure may not fully capture recent innovation activity.

Administrative datasets are also subject to time lags and do not always provide complete coverage for the same reference periods, so comparisons across indicators may reflect differences in reporting as well as changes in underlying activity. In addition, Innovate UK awarded funding captures innovation activity supported through Innovate UK and should not be interpreted as a measure of total innovation investment in the sector, as businesses may also draw on other public and private sources of support.

6. Feedback

This is an ad-hoc statistical release using exploratory methods to produce statistics for the D&T sector. We welcome feedback on both the statistics and methods used. Please contact: economicestimates@dsit.gov.uk.