INSTITUTO POLITECNICO NACIONAL

ALUMNOSBUSTOS BERNAL PAMELADE LOS REYES PARDO ALEJANDRAGARCA DAS ANIELAGMEZ LPEZ DULCELPEZ GARCA LUIS ALBERTOURIBE MARTNEZ ERIKAOSLO MANUALThis manual has been endorsed by the OECD Committee for Scientific and Technological Policy (CSTP), the OECD Committee on Statistics (CSTAT) and the Eurostat Working Party on Science, Technology and Innovation Statistics (WPSTI).

Chapter 1Objectives and Scope of the ManualINTRODUCTION

INTRODUCTION 1st Edition1992 2nd Edition1997 3rd Edition2005

Factors influencing the scope of the Manual

What is measurable?What is it of value to measurable?

7Scope of the ManualSector coverage

9TYPES OF INNOVATIONSThe Manual defines four types of innovations that encompass a wide range of changes in firms activities:

Involve significant changes in the capabilities of goods or services. Both entirely new goods and services and significant improvements.

Represent significant changes in production and delivery methods. 10Refer to the implementation of new organizational methods.These can be changes in business practices, in workplace organization or in the firms external relations.

Marketing innovations involve the implementation of new marketing methods. These can include changes in product design, in product promotion, and in methods for pricing goods and services. DIFFUSION AND THE DEGREE OF NOVELTYAn innovation does not need to be developed by the firm itself but can be acquired from other firms or institutions through the process of diffusion.Diffusion is the way in which innovations spread, through market or non-market channels. Without diffusion, an innovation has no economic impact. Three other concepts for the novelty of innovations are: new to the market, new to the world and disruptive innovations. There are two main reasons for using new to the firm as the minimum requirement of an innovation. First, adoption of innovations is important for the innovation system as a whole. Furthermore, the learning process in adopting an innovation can lead to subsequent improvements in the innovation and to the development of new products, processes and other innovations.1112PROVIDING DATA ON THE KEY ISSUESInnovation comprises a number of activities that are not included in R&D, such as later phases of development for production and distribution, support activities such as training and market preparation, and development and implementation activities for innovations such as new marketing methods.INNOVATION ACTIVITIES AND EXPENDITURES

13During a given period, a firms innovation activities may be of three kinds: 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.Expenditures are measured on the basis of the sum of these three kinds of activity over a given period of time. An alternative would be to collect information on total expenditures on activities related to individual innovations. It is hoped that, firms will find it in their own interest to cost their innovation activities.

14FACTORS INFLUENCING INNOVATIONThe objectives of the firm may involve products, markets, efficiency, quality or the ability to learn and to implement changes. The forces that drive innovation activities are: as competition and opportunities for entering new markets. Innovation activities can be hampered by a number of factors. These include economic factors, such as high costs or lack of demand, factors specific to an enterprise, such as lack of skilled personnel or knowledge, and legal factors, such as regulations or tax rules.

THE INNOVATING FIRM AND THE IMPACT OF INNOVATION The innovative firm is one that has introduced an innovation during the period under review. Innovative firms can be distinguished by the types of innovations they have implemented; they may have implemented a new product or process, or they may have implemented a new marketing method or organizational change.15

16 Impacts of innovations on firm performance range from effects on sales and market share to changes in productivity and efficiency. Important impacts at industry and national levels are changes in international competitiveness and in total factor productivity.The outcomes of product innovations can be measured by the percentage of sales derived from new or improved products.

LINKAGES IN THE INNOVATION PROCESS The innovative activities of a firm partly depend on the variety and structure of its links to sources of information, knowledge, technologies, practices and human and financial resources. Each linkage connects the innovating firm to other actors in the innovation system: government laboratories, universities, policy departments, regulators, competitors, suppliers and customers. Three types of external linkages are identified. Open information sources provide openly available information that does not require the purchase of technology or intellectual property rights, or interaction with the source. 17Some Survey IssuesThere are two main approaches to collecting data on innovations:The subject approach starts from the innovative behavior and activities of the firm as a whole. The idea is to explore the factors influencing the innovative behavior of the firm (strategies, incentives and barriers to innovation) and the scope of various innovation activities, and above all to examine the outputs and effects of innovation. These surveys are designed to be representative of all industries so that the results can be grossed up and comparisons made between industries.

The object approach involves the collection of data about specific innovations (usually a significant innovation of some kind or a firms main innovation). The approach involves collecting some descriptive, quantitative and qualitative data about the particular innovation at the same time that data is sought about the firm.Some Survey Issues

Chapter 4Institutional ClassificationsTHE APPROACHThe institutional approach focuses on the characteristic properties of the innovative firm, and all characteristics of innovation activities, and their inputs and outputs, are classified to one class or subclass according to the units principal activity.

THE UNITS A clear distinction has to be made between the reporting and the statistical units. The primary statistical unitThe enterprise unit is the appropriate primary statistical unit in innovation surveys in most cases. The enterprise unit should, however, not be confused with the entity legal unit. While legal units are independent in a legal sense, they may not necessarily constitute independent economic entities with decision-making autonomy for their productive activities. The enterprise is generally the most appropriate statistical unit. It includes: Enterprises that consist of a single legal unit that engages primarily in one kind of economic activity. Enterprises that are a group of legal units, where the individual legal units cannot be considered separate economic entities, including:Legal units that are vertically or horizontally integrated in the enterprise.Individual legal units that perform ancillary functions, including R&D.

Industrial classification proposed for innovation surveys in the business enterprise sector based on ISIC Rev. 3.1 and NACE Rev. 1.1

1. Only enterprises in the business sector should be included, following the Frascati Manual, 163-168. For this NACE/ISIC-group (73), data on the product field should also be collected, following the Frascati Manual, 272.Classification by main economic activity

Classifications by sizeIt is recommended that size should be measured on the basis of number of employees. This recommendation is in line with similar proposals in other manuals in the Frascati family. Given the strata requirements in sample surveys, and given that innovation activities other than R&D are widely performed by small and medium-sized units, it is recommended that size classes include smaller firms. In order to maintain international comparability while at the same time allowing flexibility in the number of size classes.The following size classes are recommended as a minimumOther classificationsIt is recommended that when enterprises are the statistical units in innovation surveys they should be classified as follows

Classification of statistical units for innovation surveys by type of institution

Other classifications: General enterprise characteristics. Chapter 6MEASURING INNOVATION ACTIVITIESIntroduction

Components and coverage of innovation activitiesCreative 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 applicationsCollecting data on innovation activities.Collecting data on innovation activities.Activities for marketing and organizational innovationsQualitative data on innovation activity.Other measurement issues.The subject approach vs. The object approach.