Technological innovation is relentless. This challenges the best of people to make informed decisions at the right time to avoid being disrupted, with added challenge of separating hype from reality. Against this backdrop, GlobalData has launched ‘Technology Innovation Intensity (TII)’— a proprietary data-driven model to identify leading innovation driven technologies. TII incorporates key innovation drivers from alternative datasets such as patents and deals to track a technology’s pace of innovation as well as its lifecycle stage and enables right technology bets.

Consider for instance the Technology Innovation Intensity (TII) for Cybersecurity (dark blue line) in the below infographic. When compared against multiple external benchmarks its utility as a leading indicator for a technology’s evolution becomes apparent.

First, Cybersecurity TII provides lead signal compared to Solactive Cybersecurity thematic index, generating 40%+ returns from key inflection points. Key reason for TII being predictive is because increasing share of company revenues are based on products and services built on top of advances in technological innovation – which are protected by patents. Since TII measures technology innovation, it is a lead signal for future revenue potential and consequently is predictive of share price performance. Thus, TII helps investors in assessing technology investments.

Next, adoption follows innovation, and one can see this linkage clearly from data. Google trends, which we proxy for end-user demand / tech adoption, follows trends in TII with a lag of about 2-2.5 years. This is useful for corporate strategists and decision makers to make the right strategic pivots and technology investments early on to capture oncoming trends in technology adoption.

Finally, the signal also provides 2+ years lead time in actual sales of 15+ pure-play US-based publicly listed cybersecurity firms, making TII useful for companies and peers to anticipate shifts in demand for their products and services.

To set up a free access to GlobalData’s Technologies Innovation Intensity (TII) framework, sign up here – https://www.globaldata.com/data/account/register/