danish centre for studies in research and research analysis knowledge economy – challenges for...

Danish Centre for Studies in Research and Research Analysis

Knowledge Economy – Challenges for Measurement Luxembourg, December 8-9, 2005

Innovation measurement: present and future challenges

Carter Bloch


OutlineThe Oslo Manual revision – how well is

the new Oslo Manual able to meet policy (and other) needs?

Discuss the main changes to the Oslo Manual for collection of innovation data.

Oslo Manual addresses many of these policy needs, but too early to fully assess the usefulness of innovation data based on new guidelines


Oslo Manual revision impacted by recent developments in theory, policy and the economy

Innovation concept

Innovation measurement

Policy Changes

in the economy


The concept of innovation

Greater focus given to:Innovation as a systemKnowledge transfer and linkagesFirms’ ability to absorb and utilize new and

existing knowledgeMarket driven innovation – customer

interaction and later stages of innovation


Firm innovation has many dimensions

Service (and manufacturing)

innovationsNew network and value chain configurations

Organisational innovations

Technology- and product based innovations

Deliverysystems

Customer interfaces

Based on: J. Kuusisto, 2005


Major economic trendsMajor economic developments have had large

influence on innovation processes: Globalisation

Knowledge flows, linkages, new markets, competitive pressures

Information and communication technologies ICT in products and processes, increase in potential for access

to new knowledge...and in demands on firms’ ability to exploit this potential

Increasing importance of services Service sector large and growing, increased focus on service

products in manufacturing firms


Policy objectives – the Lisbon strategy

Focus on ’full scope’ of innovationTransformation of research and

technologies into innovationsPolicy oriented to wide range of sectorsRegional dimensionPublic sector innovationIntegrate/promote innovation in other

policy areas (horizontal approach)


Oslo Manual revision – overview of the changes

Broadening the definition of innovation to include organisational changes and new marketing methods

New chapter on linkages in the innovation process

Novelty: new to the marketInnovation activities include preparations

for marketing and organisational innovations


Product and process innovations

A product innovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics.

A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.

Removal of ’technological’ from definitions Otherwise only minor changes



An organisational innovation is the implementation of a new organizational method in the firm’s business practices, workplace organization or external relations.

Business practices are routines and procedures for how work conducted.

Workplace organisation includes organisational structure, distribution of work responsibilities

External relations


Marketing innovations

A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.

Draws on 4P’s marketing model:Product design that does not change functional

characteristicsNew sales channels or outletsNew methods in product promotion or presentationUse of new pricing strategies


Types of linkagesOpen information sources: openly available information

that does not require the purchase of technology or intellectual property rights, or interaction with the source.

Acquisition of knowledge and technology: purchases of external knowledge and/or knowledge and technology embodied in capital goods (machinery, equipment, software) and services, which do not involve interaction with the source.

Innovation co‑operation: active co‑operation with other enterprises or public research institutions for innovation activities (which may include purchases of knowledge and technology).

Purpose: form framework on innovation linkages that incorporates existing measurement and updates it, to better identify specific types of linkages.


Broadening the definition of innovation – main goals

Build framework better suited to measure innovation in services, with more complete coverage of innovation in manufacturing

Make it possible to examine how prevalent and important are ”non-technological” forms of innovation for performance.

Identifying ’integrated innovations’- innovations that span a number of different types of innovations (and thus potentially imply a coordinated innovation effort within the firm).


Illustration using Danish CIS4 data (Note: unweighted, preliminary)

13%

20%

9%

2%

1%

Product-Process innovations


Marketing innovations 3%

15%

Product-process innovators: 49%Marketing and/or organisational innovation only: 13%Non-innovators: 38%


DK CIS4 - Shares of innovative firms (% total, unweighted)

Innovation type All firms Manufacturing ServiceProduct 36% 42% 33%Goods 28% 39% 22%Services 20% 13% 24%Product and Marketing 12% 11% 13%Goods and Marketing 9% 11% 8%Service and Marketing 8% 4% 11%Prod. and Organisational 21% 23% 19%Process 39% 46% 34%Proc. and Organisational 49% 55% 45%Product and/or Process 22% 25% 21%All 4 types of innovations 9% 9% 10%


DK CIS4 - Shares of innovative firms (% total, unweighted)

Innovation type All firms Manufacturing Service

Marketing 18% 15% 20%

Marketing methods 14% 9% 17%

Product design 9% 8% 9%

Organisational 39% 37% 41%

Business practices/ Workplace organisation 37% 35% 39%

External relations 19% 19% 19%

Marketing and/or Organisational 42% 38% 44%


Overall assessmentNew Oslo Manual expands coverage of types of

innovations and linkages to reflect changes in policy and concepts.

However, a full assessment of their usefulness can only be made once data collected/analyzed using new guidelines

Usefulness of data also depends on how data is utilized (international comparability and composite indicators).


Overall assessmentOther related policy areas not covered, or only

briefly covered in new OM

Overall coverage of marketing and organisational innovations somewhat limited – though there are also limits to how much they can be covered in surveys

Public sector innovation is important topic, but still in early stages of development (in terms of measurement)

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