Glossary

What the words mean

Every term on this site that carries a specific meaning, defined.

Last updated 6 August 2026.

Terms

Term	Meaning
NAICS	The North American Industry Classification System — the six-digit code that identifies an industry. 238210 is Electrical Contractors. Codes are revised every five years and retired codes return nothing rather than guessing.
SOC	Standard Occupational Classification — the code that identifies a JOB rather than an industry. The bridge between the two is what lets us say which licence gates which industry.
Net formation	Establishment entry rate minus exit rate, averaged over five years. The strongest predictor of subsequent industry growth we have found: rank correlation +0.57 across four backtested windows.
Decile separation	The gap in outcome between the top and bottom tenth of industries ranked by a signal. Net formation separates them by 42.6 percentage points of ten-year establishment growth.
Backtested	Scored using only data that existed at a past date, then graded against what actually happened afterwards. A backtest that uses later data is flattering and worthless.
Descriptive only	A figure that is true and has no measured relationship with what happens next. Establishments per firm is descriptive: it tells you whether an industry scales to many sites, and predicts nothing about growth.
Covered weight	How many of a rubric's 100 points were actually evidenced. A score is computed from the covered points only, and the uncovered ones are named.
Brier score	How wrong a stated confidence was, squared. Lower is better. It is computed from CONFIDENCE rather than the merit score, because a score of 67 is not a claim of 67% odds.
Pre-registered test	A metric, a threshold and a date, recorded at the moment a verdict is issued and not editable afterwards. It is what makes a later claim of accuracy checkable rather than asserted.
VOID	A pre-registered test that was never actually run. It is not a pass and not a failure, contributes to no calibration in either direction, and keeps its original prediction on the record with the reason it was voided.