Comparison between ONS and kMatrix data for LCEGS

We are often asked how the kMAtrix data differs from traditional figures, such as those provided by the Office of National Statistics (ONS).


The purpose of this page is to provide an example, in the form of a brief description of some of the differences between the ONS Environmental Goods and Services Sector (EGSS) data and the LCEGS data provided by kMatrix. The two methodologies differ in the way data is collected, their methodologies, and in terms of their sector definitions.


kMatrix is a data house that specialises in providing evidential data for business modelling and analysis on a multi-sectoral basis.  We provide back room services to the likes of Deloitte and PWC amongst others in the UK, New Zealand, Australia, US and the EU for sectoral analysis and due diligence for sectoral development and investment. We also provide our business and technology profiling services through these channels to market, as well as direct to universities for technology spinouts and individual businesses for development purposes.  Further customers include government departments such as BEIS, Home Office and various local and regional government departments.


The ONS EGSS data is produced primarily for the purpose of national accounting.  It is sector-specific, using narrow sector definitions and takes no account of the value or supply chains in a sector.  In contrast, the kMatrix methodology was originally designed to help companies by measuring technologies or activities using small taxonomies, to assist with investment and developmental planning.  This capability was expanded to provide market data for a number of economic sectors, by creating larger taxonomies to capture as much of the market as possible, including the supply and value chains.  Each taxonomy for a sector will draw relevant activities from many other sectors, to fully capture all activity.  In this way, the LCEGS taxonomy captures activities across multiple sectors and down the value and supply chains.  This difference in what is being measured is the fundamental reason why the definitions used by ONS and LCEGS do not align.


The kMatrix methodology uses a unique process of ‘triangulation’ to measure metrics such as employment and other characteristics of a sector at varying levels of detail.  This process has been developed over 30 years and has been adopted by various governments, universities and major corporates to provide economic industry data for hard to measure sectors. It is similar in concept to the triangulation of satellites to work GPS satellite navigation systems.  The methodology uses multiple data points which can be economic or non-economic in origin, from a number of different sources to ‘triangulate’ the value of a product or service in question. 


This process is different to the methodology used by the ONS to produce the EGSS data, predominantly because the ONS data relies on self-certification of companies into SIC codes, whereas the kMatrix methodology calculates values based on multiple sources of data.  The ONS data is based on where companies choose to classify themselves. kMatrix data looks at the activities of companies and attributes those activities to different sub-sectors.  In effect, the ONS system is limited to the ability or willingness of companies to list which sectors their products or services are used in, this method is likely to produce both over and underestimates of market size as companies will attribute more or less of their activities to relevant SIC codes.  The kMatrix methodology does not rely on company cooperation but looks at their activities and breaks them down into the levels or sub-sectors they are relevant to. 


The kMatrix process operates on a ‘bottom up’ basis, meaning we look at products and services delivered, rather than company classifications and turnover, which is classed as ‘top down’ (SIC system).  The bottom up process was developed to assist individual companies based on sectoral analysis findings and provide evidential data and advice. By looking at the sector from the bottom up (by each activity, product or service), the sector can be determined in accordance with the relevant sector definition, whilst allowing the flexibility to ‘add in’ or ‘opt out’ of various activities depending on the purpose of the reporting.  ONS data itself is not used to produce kMatrix figures, but the kMatrix values can be reported out through the ONS classification system if required. 


Table 1 shows a comparison between employment analysis for the London region using the SIC classification methodology and the kMatrix methodology for the Manufacturing sector and the Construction sector.

Table 1: Comparison of 2011 - 2016 Employment Data for SIC and kMatrix in London  



2011 Jobs

2012 Jobs

2013 Jobs

2014 Jobs

2015 Jobs

 2016 Jobs

SIC based








SIC based

























Indexed numbers

for the rows above show

that growth in the manufacturing

and construction sectors is

similarfor both the SIC and

kMatrix definitions



























Sector - LCEGS is made up of elements from many different traditional sectors (including manufacturing, finance, construction, consulting and energy) therefore as a grouping it includes products and services from those sectors that together amount to the total value of the LCEGS grouping.

Scale - The ONS system only produces estimates of the sector size at the country level, whereas the LCEGS data can be provided by Country, Region, City, Local Authority etc.


Table 2 shows a summary of the main differences between the kMatrix data and the ONS EGSS data.


Table 2: kMatrix and ONS – EGSS Comparison Summary Table



kMatrix - LCEGS


Sector definition

The LCEGS sector includes the EGSS definition but expands it to include all activities that contribute and enable growth in the sector.  Those elements which are excluded from EGSS which are produced for purposes that, while beneficial to the environment, primarily satisfy technical, human and economic needs or that are requirements for health and safety are included in LCEGS if they contribute to the sector.  For more information please see Appendix 3 and Appendix 4 of this report.

The environmental goods and services sector is made up of areas of the economy engaged in producing goods and services for environmental protection purposes, as well as those engaged in conserving and maintaining natural resources.

Excluded from the scope of EGSS are goods and services produced for purposes that, while beneficial to the environment, primarily satisfy technical, human and economic needs or that are requirements for health and safety.


Sector size measurement

Triangulation of data from multiple sources

Company surveys via company self-certification

Sector sales coverage

Full value of sales for the sector, including supply and value chain

Only sector sales, not including supply or value chains

Geographic range of coverage

Global, Country, Regional, City & Local Authority


Available data includes

Sales, number of employees, number of companies, exports, growth rates (historical and forecast) & 60+ more metrics

Output, GVA, employee count and exports