Feb28

Innovation Metrics

05:49 pm on Feb 28th 2009

Point: Measure innovation from a variety of lenses, not just one

Story: The Information Technology and Innovation Foundation (ITIF) conducted a 40-country study of innovation, ranking countries on competitiveness. The ITIF used 16 metrics grouped into 6 categories:

  1. Human Capital
    * Higher Education Attainment
    * Science & technology Researchers
  2. Innovation Capacity
    * Corporate Investment in R&D
    * Government Investment in R&D
    * Share & Quality of World’s Scientific and Technical Publications
  3. Entrepreneurship
    * Venture Capital
    * New Firms
  4. Information Technology Infrastructure
    * E-Government
    * Broadband Telecommunications
    * Corporate Investment in IT
  5. Economic Policy Factors
    * Effective Corporate Tax Rates
    * Ease of Doing Business
  6. Economic Performance
    * Trade Balance
    * Foreign Direct investment Inflows
    * GDP per Working-Age Adult
    * Productivity

Action: Translate these country-level metrics to your organization. For example, Human Capital metrics: the education level of your employees, the skills employees must have to meet customer needs; Innovation Capacity: how much do you invest in R&D or in innovation? How well do you understand your industry, technology and the specific markets where you compete? Entrepreneurship: do you encourage employees to suggest ideas? Do you have processes in place to evaluate and fund those ideas? IT Infrastructure: do you invest in IT and software to let your employees communicate and collaborate easily? Economic Policy: do you minimize barriers to innovation, like bureaucracy and silos? Economic Performance: how many innovations do you have per employee?

For more information, see the ITIF’s report The Atlantic Century: Benchmarking EU & US Innovation and Competitiveness

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5 Comments »Innovation, Metrics, Productivity

5 Responses to “Innovation Metrics”

  1. Claire Walter Mar 1st 2009 at 12:56 pm 1

    I can’t get that link to “The Atlantic Century….” to take, but it would be interesting to know which of the 40 ranks where.

  2. Andrea Meyer Mar 1st 2009 at 02:49 pm 2

    Thanks for catching that, Claire. I changed the link now so that you see the country rankings and can then click to read the report. (Apparently it isn’t possible to link directly to the report itself, even though no registration is required.)

  3. Marcy Rodney Mar 3rd 2009 at 08:43 am 3

    this is a good one, Andrea — wouldn’t it be interesting to see this kind of multi-faceted approach applied to the top say, 100 companies in each cap bracket?

  4. Andrea Meyer Mar 5th 2009 at 03:43 pm 4

    Yes, I would love to see this kind of approach applied to companies! Have you seen anything like it? About the closest I can think of is something like Business Week’s Innovation Index, which looks companies that BW has identified as innovators and tracks their performance daily in the stock market. (http://www.businessweek.com/innovate/global_index/) That’s still a far cry from what you’re suggesting, which would be much more precise and effective. If you do find anything along the lines of the multi-faceted approach, please share it with us here, or just give me a pointer, and I’ll explore it further.

  5. Braden Kelley Mar 6th 2009 at 04:45 pm 5

    Interesting that people keep trying to make innovation capacity comparisons by looking at the $$$ invested in R&D. I guess it is harder to measure how flexible a country’s organizations are or how able they are to generate new businesses and reinvent themselves.

    @innovate