How do we get the score?
The results of the survey have been collated and weighted to provide DLA Piper’s Tech Index score.
This is based on a diffusion index which weights the percentage of respondents’ answers that are positive, negative and neutral, with the results presented as a scorecard next to each of the areas monitored. The scorecard is designed to demonstrate degrees of positive feedback, where 50 represents a neutral score, 100 represents the maximum positive score and 0 represents an entirely negative score. This score then gives an overall view of the sentiment of the respondents, and therefore the Index.
Respondents were also invited to consider the specific areas within their industry that offered the greatest opportunity for growth. A score for each of the first eight technology index questions (focused on regulation, tax, financing, talent and IP) was generated using the calculation below.
INDEX = (P1*1) + (P2*0.5) + (P3*0)
P1 = Percentage of answers that reported an improvement.
P2 = Percentage of answers that reported no change.
P3 = Percentage of answers that reported a deterioration.
Thus, if 100 percent of the panel reported an improvement the index would be 100. If 100 percent reported deterioration, then the index would be zero. If 100 percent of the panel saw no change the index would be 50 (P2 * 0.5). Therefore, an index reading of 50 means that the variable is unchanged, a number over 50 indicates an improvement, while anything below 50 suggests a decline. The higher above 50 the index is, the stronger the sentiment, for example, a reading of 55 points to a stronger increase in a variable than a reading of 52.5.
As each factor (regulation, tax, financing, talent and IP) has a different level of impact upon the growth of the technology sector, once each individual score has been calculated, the following weighting is applied:
- Regulatory = (10% + 10%) 20%
- Tax = (10% + 10%) 20%
- Financing = (15% + 10%) 25%
- Talent = 10%
- IP = 25%