The measurement of Innovation

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The measurement of Innovation

• An historical perspective
• The Frascati Manual and the Oslo Manual
• ST indicators
• Innovation indicators
• Some evidence from innovation surveys
• Concluding remarks

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Development of indicators
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The linear model

• Research-based
• Sequential
• Tecnocratic

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The Chain Link Model
Chain Linked Model of Innovation
Kline Rosenberg
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Definition of research and development (Frascati
Manual)

• RD is defined as creative work undertaken on a
  systematic basis in order to increase the stock
  of knowledge including knowledge of man, culture
  and society, and the use of this stock of
  knowledge to devise new applications.

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Technological innovation(Oslo Manual)

• Technological innovations comprise new products
  and processes and significant technological
  changes of products, services and processes.
• An innovation has been implemented if it has been
  introduced on the market (product and service
  innovation) or used within a production process
  (process innovation).

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Technological innovation(Oslo Manual)

• Innovations involve a series of scientific,
  technological, organisational, financial and
  commercial activities.
• The product or process should be new (or
  rignificantly improved) to the firm (it does not
  necessarily have to be new to the relevant market)

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Science and technology indicators

• ST indicators may be defined as a series of data
  designed to answer questions about -
  the state of the science and technology
  enterprise,
  - its internal structure,
  - its
  relationships with the outside world, and - the
  degree ST is meeting the goals set it, and about
  its evolution.

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Science and technology indicators

• Statistical data are the basic elements (atoms)
  with which indicators (molecules) are
  constructed.
• The questions indicators have to answer concern
  aspects which can be tacked using quantitavive
  techniques.

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Science and technology indicators

• RD
• Patents
• Bibliometrics
• Technological balance of payments
• Human resources for ST
• Trade in high-tech products

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Resources Scale vs Intensity RD Expenditure
(OECD)
0,04
Sweden
0,035
0,03
Japan
Finland
US
France
0,025
the Netherlands
Germany
Denmark
Intensity- Share of GDP spent on RD
0,02
UK
Belgium
Ireland
0,015
Austria
Italy
0,01
Portugal
Spain
0,005
Greece
0
100
1000
10000
100000
1000000
Scale- Total Expenditure in RD (PPP
logarithmic scale)
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Output publications vs expenditure
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Scientific and technological capacities in OECD
Fonte Caracostas Muldur (1998)
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Main indicators from innovation surveys

• Number of innovating firms
• by sector
• by firm size
• Cost of innovation
• Percentage of sales due to new products

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The Community Innovation Survey (CIS)The
harmonised EU/OECD questionnaire

• General information about the firm
• Type of innovation (product, process)
• Sources of information for innovation
• Objectives of innovation
• Factors hampering innovation
• Cost of innovation
• Impact of innovation

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Innovation in EU source Community Innovation
Survey, OCT-PT
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The Community Innovation Survey (CIS)The
harmonised EU/OECD questionnaire

• RD
• Cooperation in innovation
• User sector of innovation
• Public policies for innovation
• Impact of innovation on employment, the
  environment, firms organisation

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Innovative firms in manufacturing and services in
Italy (1990-92)
Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Objectives of innovation Manufacturing in
Italy1994-96 (percentage of firms for which the
factor is very relevant)
Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Obstacles to innovation Manufacturing in
Italy1994-96 (percentage of firms for which the
factor is relevant)
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Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Sources of information for innovation
Manufacturing in Italy1994-96(percentage of
firms for which the factor is relevant)
Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Innovating firms in manufacturing in Italy
(1994-96)
Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Cost of innovation (percentage) - Italy (1990-92)
Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Service firms which have carried out innovation
activities in Italy 1993-1995 (percentage)

• 13.8
• 18.5
• 12.7
• 52.2
• 28.9
• 12.2
• 53.8

• RD
• Design
• Know-how
• Software
• Training
• Marketing
• Investment

Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
28
Innovation activities of service firms
(percentages)
Firms which have carried out the activity
Innovation expenditure

• RD 13.8
• Design 18.5
• Know-how 12.7
• Software 52.2
• Training 28.9
• Marketing 12.2
• Investment 53.8
• Total -

• 23.7
• 8.1
• 3.5
• 14.1
• 2.6
• 1.9
• 46.0
• 100.0

Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Innovation expenditure of Italian service firms
Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Innovation expenditure (percentages)
Service firms (1993-95)
Manufacturing firms (1990-92)

• RD 23.7
• Design 8.1
• Know-how 3.5
• Software 14.1
• Training 2.6
• Tooling-up, patents -
• Marketing 1.9
• Investment 46.0
• Total 100.0

• 35.8
• 7.4
• -
• -
• -
• 8.1
• 1.5
• 47.2
• 100.0

Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Lessons from the CIS survey (1994-1996)
Percentage of innovating firms
Manufacturing firms
Service firms

• Germany 83
• Austria 81
• Ireland 79
• Finland 69
• Spain 53
• Italy 50 Poland 34
• Turkey 33

• 82
• 64
• 62
• 46
• -
• 31
• -
• -

Institute for Studies on Scientific Research and
Documentation National Research Council of Italy
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Concluding remarks

• Innovation can be measured
• We have learnt a lot from innovation surveys and
  other indicators
• Still many challenges ahead of us

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Lessons learned

• Technological innovation is quite a diffused
  phenomenon
• There are wide differences across sectors and
  size of firm
• Firms rely on a wide range of innovation sources
  investment, RD and software are the major
  components of firms' innovation expenditure

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Lessons learned

• Major obstacles for introducing technological
  innovation are of an economic nature - i.e. cost
  and risk too high
• Technological information is drawn mainly from
  outside suppliers of equipment, materials and
  components as well as from in-house technical
  departments
• Internal sources of information are much more
  important than public research institutions

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Some challenges

• Software
• Services
• Organisation
• Information and communication technologies
• Biotechnologies
• Employment
• Environmental sustainability

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Growth of Knowledge-based industries
OECD(2000)
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Incentives to BERD1990-1998
SOURCE OCDE (1999).
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Some challenges

• Further development of theories in the
  knowledge-based economy
• Innovation surveys allow to take into account
  complexity
• Linkage with other industrial data
• Risk of too much information
• The advantage of international comparability
  (Big science)