Reen Blake-Carr looks at two companies providing economic and business data and assesses their similarities and differences. With thanks to Charlie Hopkirk, Black Country Consortium for his input into the development of this blog.
What is Red Flag Alert?
Red Flag Alert is a company that was founded in 2004 to help identify new business opportunities for companies by using data insights in order to help businesses grow revenue and protect their company from financial risk. Red Flag alert uses a piece of software called Red Flag that monitors a company’s financial health through the use of Gold to Amber health ratings, with Gold being really healthy and Amber being a cause for concern. The software also uses a red flag rating which ranges from 1 to 3 red flags which gives an estimate of how close a company is to closing down and liquidating its assets.
What is Data City?
Data City is a company that tries to map the emerging economy and provide users with real-time data on different sectors and the companies within them. Data City’s software is called data explorer which allows users to compare, manage, analyse and explore different companies. It also uses a greatly expanded sector reference going into more detail than the Standard Industrial Classification (SIC) 07 of sectors as the company classifies a company by exactly what they say they do on the web.
Similarities and Differences
Red Flag uses data that is collected from Companies House and other data sources which provides information on around 5 million businesses from around the UK. They provide insight into business accounts, trading addresses, directors, and industry classification which allows for the analysis of these businesses through a health rating of how they are performing. Data City, on the other hand, uses Artificial Intelligence or AI to aggregate open-sourced data sets, company financials, website text and investment data to provide real-time access to analyse and compare different companies’ data that is available on websites.
The table below highlights the differences and similarities between Red Flag and Data City software.
| Similarities | Differences |
| Red Flag and Data City allow for searches between geographical data. | Whilst Red Flag allows for in-depth geographical data at the local authority, city and district levels. Data City offers a greater range of geographies which allows the user to select geographies such as Local Enterprise Partnerships (LEPs), local authorities, cities, regions and constituencies and countries. International geographies are present for country-level comparison. |
| Both allow for searches between broad SIC codes. | Data City has a more in-depth SIC section filter. |
| Both are easy to use in terms of navigating the user interface. | Red Flag’s features are easier to use whereas, Data City has a lot more functionality, so it can be complicated to learn all its features. |
| Red Flag and Data City allow the user to find an estimate of turnover and employee count. | Red Flag uses a unique certificate rating for each individual company to analyse the company’s financial viability. |
| Data City has a proprietary system that allows companies to be classified in real-time and is self-updating. | |
| Data City has a scoring system that measures how innovative a company is. |
Data City allows the user to perform compare businesses from different sectors. You can also compare different sectors against each other. It can also be used for general analyses as well as more specific niche analyses to be conducted. For example, Data City has a scoring feature that allows the user to filter through how innovative companies are based on a one to three-star scale. This can then be combined with other filters such as sectorial and location filters to provide more granular data about businesses.
Red Flag is useful for financial purposes due to the data being very specific to the finance sector, it can be used to predict the likelihood of a business failing. This can be useful for investors to determine whether a particular company is a high or low risk to invest in.
| UK | Midlands Engine | % of which UK | WMCA(3 – LEP Area) | % of which UK | |
| Data City (All Trading addresses) | 5,107,631 | 712,579 | 14.0% | 337,392 | 6.6% |
| Data City(All registered addresses) | 5,107,631 | 634,237 | 12.4% | 291,422 | 5.7% |
| Red Flag | 2,350,895 | 321,781 | 13.7% | 89,409 | 3.8% |
The table above shows the number of business breakdowns that both Red Flag and Data City have on their software platforms. It offers a breakdown of the geography covered by the Midlands Engine, the WMCA 3 LEP area and what percentage of businesses are present from the UK total. At the national level, Data City has more businesses as it uses both trading and registered addresses it has obtained via various methods put into its software platform. Red Flag does have fewer businesses at the national level. This is due to Red Flag using data provided by the Companies House and running regular checks on their data sets to ensure it is correct and up-to-date.
This blog was written by Reen Blake-Carr, Policy and Data Analyst, City-REDI / WMREDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI / WMREDI or the University of Birmingham.