Calculating the value of technology start-ups | University of Oxford

Researchers at Oxford University have developed a novel way of determining the value of new technologies in the information and communications sector, filling a significant gap in existing methods and potentially creating a decision-making tool for investors. A variety of methods are currently used to work out what new technologies are worth, from simple financial formulas to highly complex techniques, combining qualitative and quantitative models. However, the existing techniques have significant drawbacks - they are either purely theoretical and cannot be used in practice, are mainly based on past financial investment and do not reflect the value of creativity and novelty, or they rely on subjective assessments. This means they tend to have poor predictive power. Now Professor Xiaolan Fu and Dr Shaomeng Li of Oxford's Technology and Management Centre for Development (TMCD), working with Chao Ai, Head of Early Stage Investment, R&D, at Chinese information and communication technology (ICT) company Huawei Technologies Co. Ltd, have co-proposed and pioneered a new approach drawing on big data. The researchers created a database that matched all UK start-ups in the ICT sector - defined as being less than five years old between 2006 and 2015 - with records of patents granted in the relevant technology fields by the world's major patent grant offices during the same time period.