This power point precisely presents the guidelines for collecting and interpreting innovation data. It is very helpful for individuals and organization who are doing innovation research

1. Basic concepts of
innovation

2. Measuring Innovation
• Guidelines for collecting and
interpreting innovation data,
• OM presents guidelines for
collecting data on:
• the general process of innovation (e.g.
innovation activities, expenditures &
linkages),
• the implementation of significant changes
in the firm (i.e. innovations),
• the factors that influence innovation
activities, and
• the outcomes of innovation.

3. Why measure innovation?
• Innovation and economic development;
• Innovation is more than R&D;
• Innovation policy should be evidence-based;
• Innovation data…
• Understanding of innovation and its relation to economic
growth;
• Indicators for benchmarking national performance.

4. What is innovation?
• Innovation is the implementation of:
• New or significantly improved product or process;
• New marketing or organisational method.
Implementation:
 A new or improved product is implemented when it is
introduced on the market;
 New processes, marketing methods or organisational
methods are implemented when they are brought into
actual use in the firm’s operations.

5. The innovation measurement framework

6. Types of innovation – Product (1)
• Product Innovation:
• Introduction of a good or service that is new or significantly
improved with respect to its characteristics or intended
uses;
• New products: different characteristics or intended uses
from previous products;
• Significantly improvements: changes in materials,
components, and other characteristics that enhance
performance.

7. Types of innovation – Product (2)
• Product Innovation - examples:
• New products:
• The first microprocessors;
• The first digital cameras;
• The first portable MP3 player;
• Significantly improvements:
• Introduction of ABS braking, GPS navigational systems,
or other subsystem improvements in cars;
• The use of breathable fabrics in clothing;
• Improvements in internet banking services, such as
greatly improved speed and ease of use.
Brought to
market

8. Types of innovation – Process (1)
• Process Innovation:
• Implementation of a new or significantly improved
production or delivery method (changes in techniques,
equipment and/or software);
• Intended to: decrease unit costs of production or delivery,
increase quality, or produce or deliver new or significantly
improved products.

9. Types of innovation – Process (2)
• Process Innovation - examples:
• Introduction of a bar-coded goods-tracking system;
• Introduction of GPS tracking devices for transport
services;
• Implementation of computer-assisted design for
product development;
• Implementation of a new reservation system in a travel
agency.

10. Types of innovation – Marketing (1)
• Marketing Innovation:
• Implementation of a new marketing method involving
significant changes in product design or packaging, product
placement, product promotion or pricing;
• Better addressing customer needs, opening up new
markets, or newly positioning a firm’s product on the
market  increasing firm’s sales;
• Marketing method NOT previously used - part of a new
marketing concept or strategy;
• For both new and existing products.

11. Types of innovation – Marketing (2)
• Marketing Innovation:
• Product design or packaging: changes in form and
appearance that do not alter products’ functional or user
characteristics + changes in the packaging;
• Product placement: new sales channels;
• Product promotion: new concepts for promoting firms’
goods and services;
• Pricing: new pricing strategies to market the firms’ goods
or services.

12. Types of innovation – Marketing (3)
• Marketing Innovation - examples:
• Development and introduction of a fundamentally new
brand symbol;
• First use of a significantly different media - product
placement in a television programme;
• Introduction for the first time of a franchising system.

13. Types of innovation – Organisational (1)
• Organisational Innovation:
• Implementation of a new organisational method in the
firm’s business practices, workplace organisation or
external relations;
• Increase firm’s performance by reducing
administrative/transaction costs, improving workplace
satisfaction, accessing non-tradable assets, or reducing
costs of supplies;
• Organisational method NOT used before - result of
strategic decisions taken by management.

14. Types of innovation – Organisational (2)
• Organisational Innovation:
• Business practices: implementation of new methods for
organising routines and procedures for the conduct of
work;
• Workplace organisation: new methods for distributing
responsibilities and decision making among employees for
the division of work within and between firm activities +
new concepts for the structuring of activities;
• External relations: new ways of organising relations with
other firms or public institutions.

15. Types of innovation – Organisational (3)
• Organisational Innovation - examples:
• First implementation of a database of best practices;
• Establishment of new types of collaborations with
research organisations;
• First implementation of an organisational model that
gives the firm’s employees greater autonomy in
decision making and encourages them to contribute
their ideas.

16. Diffusion and degree of novelty
By definition, all innovations must contain a degree of novelty:
• New to the firm;
• New to the market:
• Market is defined as the firm and its competitors and it can include a geographic region
or product line.
• New to the world;
• when the firm is the first to introduce the innovation for all markets and industries,
domestic and international.
A related concept is a radical or disruptive innovations:
• defined as an innovation that has a significant impact on a market and on the
economic activity of firms in that market;
• The focus is on impact of innovations as opposed to their novelty;
• May become apparent only long after introduction,
• Difficult to measure

17. Example – product innovation/degree of novelty
(Product innovations) Yes No
New or significantly improved goods? ( ) ( )
New or significantly improved services? ( ) ( )
(Degree of novelty) Yes No
New to your market? ( ) ( )
Only new to your firm? ( ) ( )
During the three years 200X to 200Y, did your
enterprise introduce:
Were any of your product innovations during the three
years 200X to 200Y:

18. Example – organisational innovation
(Organisational innovations) Yes No
New business practices for organising
procedures
( ) ( )
New methods of organising work
responsibilities and decision making
( ) ( )
New methods of organising external relations
with other firms or public institutions
( ) ( )
During the three years 200X to 200Y, did your enterprise
introduce: