This document discusses several common indicators used to measure science, technology and innovation in economies. It describes metrics such as productivity growth accounting, research and development spending, patent counts and citations, bibliometric analysis of publications and citations, and data from innovation surveys. These indicators are used to analyze factors like technological change, knowledge diffusion, economic growth, and the impact of science on standards of living.
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Lecture 5 - Indicators of innovation and technological change: R&D and patents
1. Science-, Technology and Innovation
Indicators
Merit course – 2006
Productivity (growth accounting & total factor
productivity)
Research and Development (R&D)
Patents & patent citations
Bibliometrics (publications & citations)
Innovation surveys
2. Total factor productivity
“The economist’s answer to measuring the
impact of science and technology”
An indirect way
Links innovation to it’s most important impact:
the increase in the standard of living
3. Growth accounting
Tinbergen/Abramovitz/Solow:
dQ dA dK dL
f A fK A fL .
dt dt dt dt
A fK K A fL L
ˆˆ ˆ ˆ
QA K L.
Q Q
ˆˆ ˆ ˆ
AQ L K.
L K
Figure 6. Substitution and technological change in the
production function
A measure of technological change or a
measure of our ignorance?
6. Research and Development (R&D)
Defined strictly in the Frascati Manual
(OECD)
– This defines R&D as the development of new
knowledge and new practical applications of
knowledge (research such as exploration of new
oil fields is excluded)
– Provides a practical manual for collection R&D
statistics, e.g. categories of R&D performers, R&D
funders, R&D categories, etc.
– R&D data systematically available since early
1960s
7.
8.
9.
10. Endogenous technological change –
R&D
Non-military R&D as Total R&D as a % of R&D researchers as a % R&D financed by
a % of GDP GDP % of total employment businesses
3.5 3.5 11 75
10
3.0 3.0 70
9
2.5 2.5 65
8
7
2.0
2.0 60
6
1.5
1.5 55
5
4
1.0
1.0 50
EU
EU
OECD
US
EU
OECD
US
OECD
EU
Japan
US
OECD
Japan
US
Japan
Japan
Q AR K 1 L ,
11. BERD and productivity
Country α ρ
France 0.860 (0.000) -0.031 (0.273)
United Kingdom 0.421 (0.023) 0.395 (0.067)
Japan 0.478 (0.000) 0.155 (0.000)
United States 0.521 (0.000) 0.237 (0.000)
Table 1. Estimations results for the equation including business R&D as a production factor,
1959 - 1999.
2.50
2.00
1.50
1.00
0.50
0.00
1950 1960 1970 1980 1990 2000 2010
France United Kingdom Japan United States
12. Patents
Output indicator
Counts of patents are a raw indicator: they do
not provide any information about the
commercial use or value (many patents are
never used)
The propensity to patent innovations differs
greatly between sectors (e.g.,
pharmaceuticals high, aerospace low)
Patent counts sensitive to bureaucracy at the
patent office
13. International patenting
Patents in large international markets are
considered the best indicators (USPTO, EPO)
But these are influenced by the home country
bias
A solution is to look at “Triad patents”
(patents applied for in EU-US-JP), or, more
generally, at patent equivalents in the various
systems (OECD database)
– Based on priority numbers
14.
15.
16.
17. Specialization indicators
Take the share of a country in a sector (1)
Take the share of the country in total (2)
Divide (1) by (2)
This is an indicator of specialization (<1 or
>1)
But it is asymmetric: negative specialization in
[0,1], positive specialization in [1, ∞]
– Solution: take ln()
– Solution: (X+1)/(X-1)
18.
19. Patent citations
Patents cite other patents (and non-patent
literature)
This may be taken as indicator of
technological relatedness, or even technology
spillovers
– Used to measure international spillovers, or the
geographical concentration of spillovers
But remember that patent citations are a legal
instrument, aimed at excluding patentable
knowledge
20.
21. The bureaucratic factor
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1980 1985 1990 1995 2000 2005
citations to patents citations to non-patent literature
22. Bibliometrics – measuring science
Counting publications
– Based on available databases, which have
particular biases towards specific fields of science,
and towards publications in English
Citations as a measure of “visibility” or quality
Do scientific publications contribute to a
“world stock” of knowledge or to “national
stocks”?
Cooperation: co-publishing
Networks of knowledge flows: citations
23.
24.
25.
26.
27.
28. Innovation indicators
Emerged out of the fear that R&D indicators
provide a limited picture of innovation
– R&D is an input, and there might be differences in
efficiency of turning inputs into outputs
– Innovation is a broader process than just R&D
(chain-linked model)
Community Innovation Survey (CIS) in
Europe: a panel of innovation data
Now also innovation surveys outside Europe
(e.g., Brazil, South Africa)
29. Measuring Innovation and Innovation
expenditures
Did your enterprise have any
– Product innovations new to the firm?
– Product innovations new to the market?
– Process innovations
– Service innovations
List expenditure in the following catagories:
– R&D
– New machinery and equipment
– Acquisition of external technology
– Design of new products
– Training related to innovation
– Marketing of new products
30. Distribution of sales
Share of total sales of
– Unchanged products
– Slightly improved products
– Product innovations (new to the firm, new to the
market)
31. The process of innovation
Importance of knowledge sources
– E.g., universities, clients, suppliers, competitors,
PROs
Problems related to innovation
– Etc. finance, regulations, etc.