State of the Nation 2010

4. Recent Developments in Measuring Innovation

New surveys are in development and in the field. A number of countries and international organizations are also working on measuring innovation that occurs as a result of changes in business processes, organization or marketing or through investments in intangible assets. Canada's 2009 Survey of Innovation and Business Strategy (SIBS) and the United States' 2009 Business R&D and Innovation Survey (BRDIS) are new surveys that made data available for analysis in 2010. Future analysis can draw on data to enable comparisons with Europe's Community Innovation Survey (CIS). The United Kingdom's National Endowment for Science, Technology and the Arts (NESTA) Innovation Index and the Organisation for Economic Co-operation and Development's (OECD) Measuring Innovation: A New Perspective (2010) explore possible future indicators. However, producing comparative analysis is some time away, as protocols have yet to be developed for standardization of data.

4.1 Canada — Survey of Innovation and Business Strategy

The 2009 Survey of Innovation and Business Strategy (SIBS) sampled over 6,000 companies. Survey questions address the motivation for innovation, spending on innovation activities, collaboration and the results expected from innovation. This survey is discussed in greater detail in Section 6.1.3.

4.2 United States — Business R&D and Innovation Survey

After years of absence from the measurement of innovation, the U.S. National Science Foundation's Division of Science Resources Statistics, in collaboration with the Economic Directorate of the Bureau of the Census, has conducted a new Business R&D and Innovation Survey (BRDIS). The stratified sample of 40,000 firms, with five or more employees, includes a census of large R&D performers, the 50 largest firms, based on payroll, in each state, and a sample of other firms drawn from the U.S. Census Bureau's Business Register. It went into the field as a pilot survey in January 2009 and R&D estimates were released in 2010.

The survey included the propensity for firms to innovate, and related variables, broken down by industry. It also referred to the number of firms that do and do not perform R&D, providing an understanding of the place of R&D in the business strategies of small, medium and large companies. Results from the new survey can be used to track the impact of new programs on the industrial distribution of innovation.

Europe's Community Innovation Survey (CIS) has been running at regular intervals since 1992 and provided a model for the 2005 innovation survey in Canada and for the innovation questions used in the U.S. BRDIS. CIS data are available from Eurostat, the statistical office of the European Commission. Aggregate data for the 27 European Union (EU) member states, and some other countries, are presented in the European Innovation Scoreboard, which has recently been revised to become the Innovation Union Scoreboard.

4.3 United Kingdom — Pilot National Endowment for Science, Technology and the Arts Innovation Index

The National Endowment for Science, Technology and the Arts (NESTA) Innovation Index seeks to better understand innovation at the firm level through capturing 'hidden innovation' and investigating the different ways that innovation occurs in nine industries. NESTA developed a firm-level innovation survey that was tailored to the dominant modes of innovation in each industry. Industries covered included energy production, accountancy services, specialist design, consultancy services, construction, architectural services, software and information technology (IT) services, legal services and automotive. Results were published in November 2009.

The survey asked firms about how they: obtained new ideas from elsewhere; turned ideas into products; and commercialized innovation (i.e., used innovative goods and services to make money).

The survey uncovered significant levels of hidden innovation in several industries where levels of traditional R&D investment are low, and found that hidden innovation was also important for high R&D industries. For every sector surveyed, except the energy production sector, where the effect was noted as small, innovative firms showed higher sales growth than non-innovators. This methodology is experimental and has not been used in national data-gathering efforts.

4.4 Organisation for Economic Co-operation and Development — Measuring Innovation: A New Perspective

In its 2010 Measuring Innovation: A New Perspective report, the OECD presented new indicators along with novel ways of looking at traditional ones. It included measures of expenditure on "innovation" as opposed to "R&D" by firm size. Expenditure on innovation includes: total expenditure by firms on R&D that they perform in-house or externally; acquisition of other external knowledge (e.g., patents, licences and trademarks); and acquisition of machinery, equipment and software. Canadian data for this indicator were 2005 data and only for manufacturing.

Using data from 21 countries, the report concluded that firms receiving public support for innovation invested 40 percent to 70 percent more than those who did not. It is also suggested that higher levels of company investment in innovation lead to elevated sales of new-to-market products and higher productivity.4

New work was undertaken to capture investments in intangible assets. The OECD divided these into computerized information, which includes software and databases; innovative property, which includes scientific R&D, mineral exploration, copyright and licence costs, and product development, design and research; and economic competencies, which include brand equity, firm-specific human capital and organizational capital. Work in this area does not yet include standardized methods and definitions. It does show that investments in intangibles are larger than investments in machinery and equipment in the U.S. and Sweden. Estimates of the contribution of intangible assets to labour productivity growth show that these explain a good portion of multifactor productivity growth in some OECD countries.

Another highlight is the measure of "new-to-market" product innovators with and without R&D as a percentage of innovators. This indicator shows that a large share of firms develop their innovation without performing any R&D.

4OECD (2010), Measuring Innovation: A New Perspective, p. 78. Return to text