The measurement of innovation Advanced Workshop “Science, Technology and Society” Lisbon, 24 November 1999 The measurement of innovation Giorgio Sirilli Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Outline of the presentation Definition and measurement of innovation R&D and innovation Science and technology indicators The “Oslo Manual” Some evidence from innovation surveys Concluding remarks Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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). Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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

Definition of research and development (Frascati Manual) R&D 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. Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Science and technology indicators S&T 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 S&T is meeting the goals set it, and about its evolution. Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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

Science and technology indicators R&D Innovation surveys Patents Bibliometrics Technological balance of payments Human resources for S&T Trade in high-tech products Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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

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

The linear model Research-based Sequential Tecnocratic Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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

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

Development of indicators Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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

The Community Innovation Survey (CIS) The harmonised EU/OECD questionnaire R&D Cooperation in innovation User sector of innovation Public policies for innovation Impact of innovation on employment, the environment, firm’s organisation Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Main indicators from innovation surveys Number of innovating firms –by sector –by firm size Cost of innovation Percentage of sales due to new products Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Innovative firms in manufacturing and services in Italy ( ) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Innovating firms in manufacturing in Italy ( ) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Objectives of innovation Manufacturing in Italy (percentage of firms for which the factor is very relevant) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Obstacles to innovation Manufacturing in Italy (percentage of firms for which the factor is relevant) 42 Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Sources of information for innovation Manufacturing in Italy (percentage of firms for which the factor is relevant) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Cost of innovation (percentage) - Italy ( ) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Service firms which have carried out innovation activities in Italy (percentage) R&D Design Know-how Software Training Marketing Investment Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Innovation activities of service firms (percentages) R&D 13.8 Design 18.5 Know-how 12.7 Software 52.2 Training 28.9 Marketing 12.2 Investment 53.8 Total Firms which have carried out the activity Innovation expenditure Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Innovation expenditure of Italian service firms Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Innovation expenditure (percentages) R&D 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 Service firms ( ) Manufacturing firms ( ) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Lessons from the CIS survey ( ) Percentage of innovating firms Germany 83 Austria 81 Ireland 79 Finland 69 Spain 53 Italy 50 Poland 34 Turkey Manufacturing firms Service firms Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Concluding remarks Innovation can be measured We have learnt a lot from innovation surveys and other indicators Still many challenges ahead of us Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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, R&D and software are the major components of firms' innovation expenditure Institute for Studies on Scientific Research and Documentation National Research Council of Italy

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

Some challenges Software Services Organisation Information and communication technologies Biotechnologies Employment Environmental sustainability Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Some challenges Indicators: a “heavy ship” Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Some challenges Risk of too much information Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Some challenges The advantage of international comparability (“Big science”) Institute for Studies on Scientific Research and Documentation National Research Council of Italy

Some challenges Further development of theories in the knowledge-based economy Innovation surveys allow to take into account complexity Linkage with other industrial data Institute for Studies on Scientific Research and Documentation National Research Council of Italy