Innovation is one of the basic foundations of any dynamic economy. The (current) problem with the concept of innovation is that its own relevancy has rendered the term almost meaningless. Innovation has become just another management (and government) buzz-word, a fad. It is thus essential, if we are to manage innovation efficiently and define sound policies to foster it, that we can agree on what we are talking about and, more to the point, how to measure it.
On the terminology side of that effort, we have initiatives like the Spanish UNE-166000 set of standards that aim to define concepts and approaches related to innovation, innovative projects and innovation management systems. The basic framework is closely related to that of other management standards like the ISO 9000 for quality management systems or the ISO 14000 for environmental management systems.
So far so good but, more than delimiting which are the processes that we will refer to as innovations, what we really need to learn is how to measure their outcomes and results. This is in no way an easy task, because the innovative process permeates all the levels and sectors of a modern economy. Economists frequently use Total Factor Productivity (pdf) as the best measure to estimate the impact of innovation, but it hasn't been established in any meaningful way that every increment in TFP is attributable to innovation. Innovation diffusion, crucially, has an important effect in TFP without any new innovation taking place. Determining what are the subjacent causes for increases in worker productivity isn't exactly straightfoward.
Nonetheless, some efforts are being undertaken in this field. The most thorough one that I know of is this one: Measuring Innovation in the 21st Century Economy. It's been produced by the U.S. Department of Commerce and with the participation of some industry heavyweights (like the CEOs of Microsoft, IBM, Medtronics...). The report is really insightful and I strongly recommend reading it for anyone interested in innovation policies and metrics, but don't expect it to ultimately clear all the blurry parts of the innovation picture.
If what you want to measure is the volume and activities of the innovative process, instead of its ultimate efect on the economy, the best reference I know of is the OECD Oslo Manual. It's a must read.
(Thanks to orgtheory.net)
On the terminology side of that effort, we have initiatives like the Spanish UNE-166000 set of standards that aim to define concepts and approaches related to innovation, innovative projects and innovation management systems. The basic framework is closely related to that of other management standards like the ISO 9000 for quality management systems or the ISO 14000 for environmental management systems.
So far so good but, more than delimiting which are the processes that we will refer to as innovations, what we really need to learn is how to measure their outcomes and results. This is in no way an easy task, because the innovative process permeates all the levels and sectors of a modern economy. Economists frequently use Total Factor Productivity (pdf) as the best measure to estimate the impact of innovation, but it hasn't been established in any meaningful way that every increment in TFP is attributable to innovation. Innovation diffusion, crucially, has an important effect in TFP without any new innovation taking place. Determining what are the subjacent causes for increases in worker productivity isn't exactly straightfoward.
Nonetheless, some efforts are being undertaken in this field. The most thorough one that I know of is this one: Measuring Innovation in the 21st Century Economy. It's been produced by the U.S. Department of Commerce and with the participation of some industry heavyweights (like the CEOs of Microsoft, IBM, Medtronics...). The report is really insightful and I strongly recommend reading it for anyone interested in innovation policies and metrics, but don't expect it to ultimately clear all the blurry parts of the innovation picture.
If what you want to measure is the volume and activities of the innovative process, instead of its ultimate efect on the economy, the best reference I know of is the OECD Oslo Manual. It's a must read.
(Thanks to orgtheory.net)
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