What Metrics Does the Oslo Manual Recommend for Measuring Innovation?

The Oslo Manual recommends several metrics for measuring innovation, focusing on capturing the diverse nature of innovation activities and their impacts.

Innovation Types and Activities

Product and Process Innovations: The manual distinguishes between innovations that change business products (goods or services) and those that change business processes. Metrics should capture the introduction of new or significantly improved products or processes within a business[4].
Business Process Innovations: This includes metrics for core product-related activities and support activities such as logistics, distribution, and information systems. Surveys should measure the incidence and impact of these innovations[2][3].

Measurement Framework

Survey-Based Measurement: The Oslo Manual provides guidelines for survey-based measurement of innovation, emphasizing the collection of data on innovation activities, capabilities, and external factors influencing innovation in firms[3].
Innovation Indicators: The manual suggests constructing indicators to analyze innovation data, focusing on both the outcomes (new products or processes) and the processes (activities leading to innovations)[3].

Data Collection and Analysis

International Comparability: The Oslo Manual promotes international comparability of innovation data by providing a common framework for collecting and reporting data across different countries[4].
Use of Innovation Data: It emphasizes using innovation data for statistical indicators and analysis to understand economic and social changes, assess contributions to social and economic goals, and evaluate policy effectiveness[1][3].

These metrics aim to provide a comprehensive understanding of innovation’s role in modern economies, facilitating better policy-making and strategic business decisions.

Innovation Framework

An innovation is a new or improved product or process (or combination thereof) that differs significantly from previous products or processes and has been introduced on the market or brought into use by the firm.

• Product innovation: A new or improved good or service introduced to the market.
• Business process innovation: A new or improved business process implemented within the firm.

Innovation can and should be measured.

Knowledge is a basis for innovation.

An innovation must be new or significantly improved compared to what was previously available.

An innovation must have potential utility or actual use.

Value creation or preservation are the goal of innovation.

An innovation MUST be implemented, which differentiates it from concepts like invention.

The manual provides a taxonomy of business functions that can be subject to innovation.

All developmental, financial, and commercial activities undertaken by a firm intended to innovate.

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