Can innovation be measured

Microdata-based indicators are useful to reflect differences in innovation performance across firms. These indicators can characterise firms by size, by industry, and other relevant subgroups of firms. The themes selected for econometric analysis included the determinants of innovation and the impact on productivity; modes of innovation, including non-technological innovation; and the incentive effect of IPR on innovation.

A labour force survey can provide useful data to analyze the effects of labour force characteristics e. In addition, household microdata e. MSTI database link to the database provides a set of indicators link to the document that reflect the level and structure of the efforts undertaken by OECD Member countries and seven non-member economies Argentina, China, Romania, Russian Federation, Singapore, South Africa, Chinese Taipei in the field of science and technology from on.

These data include final or provisional results as well as forecasts established by government authorities. It is the foremost international source of guidelines for the collection and use of data on innovation activities in industry.

Since the manual was first developed by OECD and Eurostat in , it has been updated twice, the third edition published in While previous editions emphasised technological product and process TPP innovation, the latest edition extends the scope of the surveys to marketing and organisational innovation. It identifies four types of innovation: product, process, marketing and organisational innovations, and places new emphasis on the role of linkages including collaboration in innovation.

Yet, patent-based indicators suffer from several weaknesses and, as a result, they should be designed and interpreted with care see Aspects and availability of patent data.

Other types of registered intellectual property rights, such as trademarks, design rights and utility models, can provide additional relevant information for innovation policy. Bibliometrics is a set of methods to statistically analyze scientific and technological output. Bibliometrics can be used to measure the impact of specific articles, authors, and publications on scientific disciplines e.

It is an important tool in evaluating research activities, laboratories and scientists, as well as the scientific specialisations and performance of countries OECD, What output formats provide measures related to innovation? Stat The IPP. It will allow users to interact with and visualise data, and aid them in gaining an appreciation of the relative positioning of their country.

The various nodes of the OECD Innovation Policy Platform gather a set of indicators about key characteristics, actors, and determinants of innovation for each of the following thematic modules:. Country Reports. Annex I. When deciding on your innovation metrics, we recommend to measure both inputs and outputs as measuring only either one of them is bound to yield one-sided results.

Keep also in mind that if you want to change your output, you must most likely change the input first. In practice, an investment can be for example money, time or talent devoted to a specific activity related to innovation management.

Measuring inputs is a great way to gain insight into how your resource allocation or innovation portfolio matches your strategy and can be considered to also cover metrics regarding the process itself: e.

We think that in general, input metrics are a great starting point for measuring innovation in the early stage because input metrics are responsive. In general, input metrics are a great starting point for measuring innovation because they are responsive. When measuring inputs, you're able to react to changes sooner. One example of this is an idea challenge , where your goal is to get as many actionable ideas as possible in a certain, limited period of time. In this case, many would probably focus on measuring the number of new ideas generated to drive engagement.

In this case, instead of just measuring the total amount of new ideas created by the participants , it would be more relevant to measure the number of ideas that will be implemented after or during the challenge, which technically speaking would be more of an output metric. In other words, output metrics measure the results your innovation investments have yielded. Output metrics measure the results your innovation investments have yielded and indicate if your investments are actually turning into something useful.

Here are some examples of output metrics :. In general, organizations are more likely to rely on outputs than inputs. Although outputs are satisfying to measure, they are typically less actionable as they often don't tell you what wen't well or what went wrong. In addition, changes in output metrics show only a certain time after the activities have taken place, which especially in the case of disruptive innovation, can be quite a long time.

Therefore, it might not be smart to focus on measuring ROI too early. Instead, in the beginning it would be smarter to assess the time horizon, i. In later stages, it makes more sense to pay closer attention to outputs. We usually like to divide innovation metrics into five different categories , each of which can have both input and output metrics. The first four of the five categories represent each of the different aspects of innovation management, whereas the remaining one focuses on business and product related metrics.

In this chapter, we'll briefly introduce each category and provide you with some simple examples of innovation metrics in each of these categories. Keep in mind that while it's valuable to acknowledge how each of the five aspects affect your innovation management process, it's not necessary to have concrete metrics to measure all of the following aspects.

Capabilities refer to the different abilities the organization has for creating and managing innovation and revolves primarily around people. Capabilities refer to the abilities , practical skills , unique insights and know-how of the people. In addition, it also covers the tacit knowledge , and other information capital , as well as financial capital needed to create innovation.

A digital prototype is less costly than a hand-made model, and is more cheaply modifiable after input from customers, employees and critics. The first step is to interview potential customers in a company and elicit from them dilemmas they face currently, the issues they must resolve to move on, and the energy-absorbing puzzles that are impeding growth of their business.

For example, how should an executive reconcile higher profits for the company with sharing gains with suppliers who have contributed to these profits? We work with our clients to refine their dilemmas and then create instruments to measure the extent to which the company is resolving them — for example, by asking stakeholders to grade the scale of the problem and the likelihood of a short-term solution being achieved, each on a 1—10 scale. We all have an innate ability to think innovatively.

While we cannot measure things created in themselves and nor should we try , we can measure aspects of the innovation process and create environments that reduce the barriers to innovation. By doing so, we can greatly increase the chances of innovation occurring in our companies. Y axis: How realistic and down to earth is your company seeing things as they really are? He is a leading thinker and author on the paradoxical nature of value creation and the creator of Dilemma Theory.

Trompenaars Hampden-Turner Consulting is a BearingPoint business partner providing training and consulting services in the areas of globalisation, mergers and acquisitions, corporate identity and sustainability, as well as training and leadership development on leveraging diversity and developing cultural awareness and competence.

About Us Who we are We deliver management and technology consulting with a difference. Find out more. Our People Our people and our way of working is what makes us different. Hot Topics Trends that are shaping the opportunities of tomorrow Find out more. The Holy Grail Capturing and measuring what it means to innovate has long been the dream of social scientists, albeit as elusive as the search for the Holy Grail.

While no one uses quite the same terms, the structure remains similar, and it is here that answers lie Many have tried to define innovation over the years. The origins of innovation and creativity thinking Perhaps the first recorded insights on the nature of innovation can be seen in the plays of ancient Greece, where innovation is spurred on by the mingling of comedy and tragedy, the first element laughing with you out of folly, the second evoking anguish and tears.

Should innovation be left to chance? According to a recent article in the New Yorker magazine the average Japanese company receives times more written ideas then the average American company. How to motivate the organization to deliver across all stages of the process?

Simply evaluate every supervisor and manager on the number of written implemented ideas that they are receiving from their employees. You reverse the process. When a worker comes up with an idea, it is the job of the manager to listen and help the worker implement it. I go to my supervisor and tell him her about the problem and he only tells me to be more careful. Go ask Mike to teach you how to do it. You ask the worker. You just ask. Then watch the innovation and creativity work.

Look, if the Japanese can do it so can we. In my experience, the most important thing is to keep the measures simple and focused on what is important to measure — not what is easy to measure. We did a major survey with Rice and Stanford several years ago, and the major finding was that companies were measuring what was easy to measure instead of what was important, and most were measuring far too many things. The next most important thing is to link these measures and metrics with reward and recognition systems — both are equally important.

In that spirit I would recommend that the following three types of measures be incorporated into a balanced innovation scorecard and linked to performance evaluation and reward and recognition systems. Innovation results are difficult to measure because they include results from a completion of ideas and projects in the innovation pipeline and b the expansion of innovation capacity at the firm.

Chips Chipalkatti leans towards the latter by using the Innovation Sales Rate percentage of sales of new products as a measure, while Normon Bodek focuses on capacity expansion by using the measure of number of ideas per person. Troy Geesaman and others would like to include both including measurements for learning through failures. David Silverstein reminds us that innovation projects across a portfolio and innovation projects executed in series by any individual will inherently have higher than average failure rate than other types of projects.

Marc Chason provides further insight by writing that innovation should be managed with long-term perspectives with short-term deliverables and goals.

The long-term perspective allows for experimentation and learning while the short-term deliverables communicate quick wins and momentum to carry through the long term. Victor Fernandes has a more holistic view of innovation results and provides a broader list of elements to measure.

The I-BSC organizes the key measures into leading, in-process and lagging indicators. It measures the a risk adjusted value and size, shape and speed of innovation projects pipeline, b investment in new platforms, partners, and competences, c new earnings and revenue contributed by the pipeline. It is clear that innovation results are not easy to measure.

Far too many companies measure what is easy to measure but not what is important to measure and get it wrong. Innovation management is a system and the innovation breakthroughs require the whole organization to work as a team.

Innovation measures should be similarly encompass the organization. Senior leaders should be rewarded for harvesting a pipeline real sales and for building a pipeline future sales. Their scorecards should be designed to milking the pipeline and also replenishing it, even during a financial crisis or a focus on Six Sigma. What are the best metrics for measuring innovation performance?

There is no best metric, since single measurement processes can sometimes negatively impact the innovation processes they are attempting to measure. Preferably, a suite of metrics should be used to measure the innovation process.

To this end, there are objective and subjective metrics. Subjective metrics include attaining reach-out goals and roadmap targets.