Paul Trott, Innovation Management and New Product development 4th Edition, Chapter 2 case Study: European Scoreboard

1. Chapter 2 MAKT
515
Case study:
European
innovation
Scoreboard

2. The reason behind the
scoreboard :
 Increase competition and globalization.
 The EU wanted to increase its efforts to
improve the Union’s performance in
innovation.
 The Union set itself a goal of becoming
the most competitive and dynamic
knowledge based economy in 10 years

3. How the EU achieve its plans?
 Came out with a strategy to build on the economic
convergence that had been developed over the
past 10 years in the EU single market and to
coordinate an “open method” of development
policies for creating new skills, knowledge and
innovation.

4. The idea of Scoreboard
 To indicate the performance of a
member state
 Conducted every year as way of
assessing the performance of member
countries
 Essentially a benchmarking
exercise, where the EU can assess its
performance against other countries, like
Japan and US.

5. The Function of the Score
board:
 The innovation scoreboard is designed to
complement the structural indicators, like
education systems, financial systems for
raising capital, levels of employment, etc.

6. Five areas that the scoreboard
pay attention to:
Innovation inputs:
1. Innovation drivers: the five indicators measure
the structural conditions necessary for innovation
potential.
2. Knowledge creation: the five indicators here
measure the investments in R&D
activities, considered as key elements for a
successful knowledge-based economy.
3. Innovation and entrepreneurship. The six
indicators in this category measure the efforts
towards innovation at the level of the firm.

7. Five areas that the scoreboard
pay attention to:
Innovation outputs:
4. Applications: the five indicators here
measure the performance, expressed in
terms of labor and business
activities, and their value added in
innovative sectors.
5. Intellectual property: the five indicators
in this category measure the achieved
results in terms of successful know-how.

8. The history of scoreboard
The scoreboard approach has been carried
out for the last five years
During this period, there have been lot of
improvements in many areas, most notably
there are some areas which the EU countries
lead the world, indicating that there is
potential for member states to learn and
replicate best practice.

9. Table 2.3 shows the five main categories have 26 indicators and
the primary data sources for each indicator
INPUT – INNOVATION DRIVERS
1.1 S&E graduates per 1000 population aged 20-29 EUROSTAT
1.2 Population with tertiary education per 100 population aged 25-64 EUROSTAT, OECD
1.3 Broadband penetration rate (number of broadband lines per 100 EUROSTAT
population)
1.4 Participation in life-long learning per 100 population aged 25-64 EUROSTAT
1.5 Youth education attainment level (% of population aged 20-24 having EUROSTAT
completed atleast upper secondary education)
INPUT – KNOWLEDGE CREATION
2.1 Public R&D expenditures (% of GDP) EUROSTAT, OECD
2.2 Business R&D expenditures (% of GDP) EUROSTAT, OECD
2.3 Share of medium-high-tech and high-tech R&D (% of manufacturing R&D EUROSTAT, OECD
expenditures)
2.4 Share of enterprises receiving public funding for innovation EUROSTAT (CIS4)
INPUT – INNOVATION & ENTREPRENEURSHIP
3.1 SMEs innovating in-house (% of all SMEs) EUROSTAT (CIS3)
3.2 Innovative SMEs co-operating with others (% of all SMEs) EUROSTAT (CIS4)
3.3 Innovation expenditures (% of total turnover) EUROSTAT (CIS4)
3.4 Early-stage venture capital (% of GDP) EUROSTAT
3.5 ICT expenditures (% of GDP) EUROSTAT
3.6 SMEs using organisational innovation (% of all SMEs) EUROSTAT (CIS4)

10. Table 2.3 shows the five main categories have 26 indicators
and the primary data sources for each indicator
OUTPUT – APPLICATIONS
4.1 Employment in high-tech services (% of EUROSTAT
total workforce)
4.2 Exports of high technology products as a EUROSTAT
share of total exports
4.3 Sales of new-to-market products (% of total EUROSTAT (CIS4)
turnover)
4.4 Sales of new-to-firm products (% of total EUROSTAT (CIS4)
turnover)
4.5 Employment in medium-high and high- EUROSTAT
tech manufacturing (% of total workforce)
OUTPUT – INTELLECTUAL PROPERTY
5.1 EPO patents per million population EUROSTAT
5.2 USPTO patents per million population EUROSTAT, OECD
5.3 Triadic patent families per million EUROSTAT, OECD
population
5.4 New community trademarks per million OHIM
population
5.5 New community designs per million OHIM
population

11. Q1: In the case study, what are the
limitations of such types of “league
tables”?
 A1: it is generally regarded as over
simplistic, largely because the economic
conditions of the member countries are so
very different and all have a wide variety
of strengths and weakness

12. Q2: why are the factors listed on the
scoreboard necessary but not
sufficient?
 Because innovation varies greatly from
industry to industry and from firm to
firm, for example, some industries are far
more competitive than others; hence it is
context dependent, and because these
indicators itself don’t guarantee that
innovation will occur.

13. Q3: there are five key areas being
assessed. What other areas do you
think should be included?
 There should be an area that is dedicated
to studying potential risks and threats in
case of any emergency, natural disaster
or any unexpected event that might
occur, like wars, conflicts, financial
crisis…etc.

14. Q4: what do the findings of table
2.3 show?
 They show the five indicators areas with their 26
indicators, and the source of the data used to
measure the indicators, and help to classify the
countries into 4 distinct groups:
 Leading Countries: like Germany, Finland and
Denmark.
 Average performance: like UK, Netherlands, and
Norway.
 Catching up: such as Hungary, Portugal and
Greece.
 Losing ground: like Spain, Bulgaria, and Turkey.

15.  The object of the scoreboard was not to
compare between the countries, but to
identify the strengths and weaknesses, but
due to the media using the data for
comparing between countries, the EU
recognized that this how analyst and
commentators liked to see the finding, so it
went along and it shows comparison, Which
is illustrated in figure 2.7:

16. The Figure shows the summary innovation
index (SII) on the vertical axis, and the
average growth rate in the Horizontal axis.

17. Q5: why is the scoreboard likely to
be of little practical help?
 TheScoreboard may be helpful
practically because it and aid
governmental policymakers to determine
where is the best place to invest
substantial sums of money and where not
to.

18. Thank
You