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Measuring innovation

National training workshopAmman, Jordan

18-20 October 2010

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Measuring Innovation

Oslo Manual: Guidelines for collecting

and interpreting innovation data

UIS - Annex (OM, 2005): Innovation Surveys in Developing Countries

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What is innovation?

Innovation and economic development;

Innovation is more than R&D;

Innovation is the implementation of:

(Technological innovation)

• New or significantly improved product (good/service) or process;

(Non-tech. innovation)

• New marketing or organisational method.

Types of innovation:

Product;

Process;

Marketing;

Organisational.

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Why measure innovation?

Innovation policy should be evidence-based;

Innovation data...

• to better understand innovation and its relation to economic growth;

• to provide indicators for benchmarking national performance.

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The innovation measurement framework

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Diffusion and degree of novelty

Diffusion… • How innovations spread;

• Economic impact;

New to the Firm / Market / World;

Disruptive innovations;• Significant impact on a market;

• Impact of innovations (as opposed to their novelty);

• May become apparent only long after introduction.

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Innovation activities

Innovation activities:

All scientific, technological, organisational, financial and commercial steps which (intended to) lead to the implementation of innovations;

Some innovation activities are themselves innovative, others are not novel activities but are necessary;

R&D that is not directly related to the development of a specific innovation.

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Innovation activities

For product and process innovations:

• Intramural (in-house) R&D;

• Acquisition of R&D (extramural R&D);

• Acquisition of other external knowledge;

• Acquisition of machinery, equipment and other capital goods;

• Other preparations for product and process innovations;

• Market preparations for product innovations;

• Training.

Preparations for marketing innovations:

• Activities related to the development and implementation of new marketing methods.

Preparations for organisational innovations:

• Activities undertaken for the planning and implementation of new organisation methods.

* Expenditures

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Kinds of innovation activities

Successful - in having resulted in the implementation of a new innovation (though not necessarily commercially successful);

Ongoing - work in progress, which has not yet resulted in the implementation of an innovation;

Abandoned - before the implementation of an innovation.

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Classifying firms by degree of innovativeness

Innovative firm: • The innovations need not have been a commercial

success;

Innovation-active firm:• Regardless of whether the activity resulted in the

implementation of an innovation;

Potentially innovative firm:• Innovation efforts but no achieved results (period);

• Key element for innovation policy;

• (Annex).

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Factors influencing innovation

Objectives: Motives for innovating;

Effects: Outcomes of innovations;• Competition, demand and markets; Production and

delivery; Workplace organisation; Other (Table 9);

Hampering factors:• Reasons for not starting innovation activities at all, or

factors that slow innovation activity or have a negative effect on expected results;

• Cost, Knowledge, Market and Institutional factors + Reasons not to innovate (Table 10).

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Linkages

Linkages connections with other agents;

Source, cost, level of interaction;

Types of external linkages:

• Open information sources;

• Acquisition of knowledge and technology;

• Innovation co-operation.

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Sources for transfers of knowledge and technology

Open information

sources

Sources for purchases of knowledge

& technology

Co-operation partners

Internal sources within the enterprise: R&D / Production / Marketing / Distribution Other enterprises within the enterprise group

** * *

External market and commercial sources:Competitors Other enterprises in the industry Clients or customersConsultants / consultancy firms SuppliersCommercial laboratories

***

**

**

***

******

Public sector sources:Universities and other higher education institutionsGovernment / public research institutesPrivate non profit research institutesSpecialised public innovation support services

****

****

****

General information sources:Patent disclosures / Professional conferences, meetings, literature and journals / Fairs and exhibitions / Professional associations, trade unions / Other local associations / Informal contacts or networks / Standards or standardisation agencies / Public regulations

*

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Data collection

The “subject” approach

• Innovative behaviour and activities of the firm as a whole

Should R&D and innovations surveys be combined?

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Example - pdt innov/degree of novelty

(Product innovations) Yes No

New or significantly improved goods? ( ) ( )

New or significantly improved services? ( ) ( )

(Degree of novelty) Yes No

New to your market? ( ) ( )

Only new to your firm? ( ) ( )

During the three years 200X to 200Y, did yourenterprise introduce:

Were any of your product innovations during the threeyears 200X to 200Y:

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Example - innovation activities and expenditures for pdt and pcs innov

(Innovation activities and expenditures forprocess and product innovations)

Yes NoAmount of

expenditureIn-house R&D ( ) ( ) $

External R&D ( ) ( ) $

Acquisition of machinery, equipment and software ( ) ( ) $

Acquisition of external knowledge ( ) ( ) $

Training for innovative activities ( ) ( ) $

Market introduction of innovations ( ) ( ) $

Other (preparations) ( ) ( ) $

During the three years 200X to 200Y, did your enterprise engage in thefollowing innovation activities:

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Example - organisational innovation

(Organisational innovations) Yes NoNew business practices for organisingprocedures

( ) ( )

New methods of organising workresponsibilities and decision making

( ) ( )

New methods of organising external relationswith other firms or public institutions

( ) ( )

During the three years 200X to 200Y, did your enterpriseintroduce:

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Example - co-operation

Within country

Abroad

A. Other enterprises within your enterprise group ( ) ( )

B. Suppliers of equipment, materials, components, or software ( ) ( )

C. Clients or customers ( ) ( )

D. Competitors or other enterprises in your sector ( ) ( )

E. Consultants, commercial labs, or private R&D institutes ( ) ( )

F. Universities or other higher education institutions ( ) ( )

G. Government or public research institutes ( ) ( )

LocationType of innovation co-operation partner

During the three years 200X to 200Y, did your enterprise co-operate on anyof your innovation activities with other enterprises or institutions?( ) Yes ( ) No

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Example - hampering factors

High Medium LowNot

relevantExcessive perceived economic risks ( ) ( ) ( ) ( )

Innovation costs too high ( ) ( ) ( ) ( )

Lack of appropriate sources of finance ( ) ( ) ( ) ( )

Organisational rigidities within the enterprise ( ) ( ) ( ) ( )

Lack of qualified personnel ( ) ( ) ( ) ( )

Lack of information on technology ( ) ( ) ( ) ( )

Lack of information on markets ( ) ( ) ( ) ( )

Insufficient flexibility of regulations or standards ( ) ( ) ( ) ( )

Lack of customer responsiveness to new goods or services ( ) ( ) ( ) ( )

Economic factors

Internal factors

Other factors

Degree of importanceHampering Factors

If your enterprise experienced any hampering factors during the period 200X-200Y, please gradethe importance of the relevant factors.

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Developing countries

Developing countries 3rd OM standards, but

adaptations;

LA: the Bogotá Manual (RICYT, 2001);

UIS: Annex to 3rd OM…

Innovation Surveys in Developing Countries.

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Characteristics of innovation in developing countries

Size and structure of markets and firms;

Instability;

Informality;

Particular economic and innovation environments;

Reduced innovation decision-making powers;

Weak innovation systems;

Elements of innovation.

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Innovation measurement in developing countries

Incorporation of the concept of potentially innovative firm;

Measurement priorities - why / what / how:

• Innovation capabilities (HR, Linkages, Quality assurance systems, ICTs);

• Expenditure on innovation activities;

• Organisational innovation.

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Adaptations

ICTs in innovation surveys• Strategic use of new technologies (“Front office” vs. “Back office”);

Linkages• Agents + Types + Location;

Innovation Activities• Hardware purchase and Software purchase (split);• Industrial design and Engineering activities (split);• Lease or rental of machinery, equipment and other capital goods;• In-house software system development;• Reverse engineering;

Human resources and training

Quality and environmental management

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Methodological issues for developing country contexts

Weakness of statistical systems;

Questionnaire design;

Survey application;

Frequency;

Publication;

Difficulties…• Lack of appreciation of the importance of innovation;• Managers are secretive about finance;• Lack of adequate legislative base.

Will be discussed in the next session

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Thank you!Thank you!

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m.schaaper@uis.unesco.org