Let’s be perfectly honest. It’s not clear that we really know how to measure innovation.
First, our definition of what constitutes innovation remains, as we’ve written here previously, remains fuzzy.
Second, it’s not clear that we have the ability to measure the things that really count about innovation. As Einstein put it
Not everything that counts can be measured. Not everything that can be measured counts.
But that doesn’t mean we shouldn’t continue to try.
Probably the most comprehensive attempt to measure innovation at macro national levels is INSEAD’s Global Innovation Index (GII) — a comparative index ranking 125 economies — most recently published in 2011.
I recently had lunch in Geneva with Daniela Benavente, one of its authors who lives here to better understand how the GII was developed.
The GII uses 80 indicators to produce a composite ranking of countries. The exact methodology used is beyond the scope of what we can cover here but the introductory chapter to the GII provides an in-depth exploration of the statistical framework used. This includes five input pillars capturing elements of national economies that are enablers for innovative activities: (1) institutions, (2) human capital and research, (3) infrastructure, (4) market sophistication, and (5) business sophistication. It also includes two output pillars capturing evidence of innovation outputs: (6) scientific outputs and (7) creative outputs. Each pillar is divided into sub-pillars composed of individual indicators. For example, the infrastructure input pillar includes a sub-indicator using the ITU’s ICT Development Index (IDI) data on information and communication technologies (ICT) access and use.
The conclusion from my discussions with Daniela is that measuring innovation and particularly its impact is still a “work in progress”.
But big thanks have to go to my old friend Bruno Lanvin and his team at the eLAB at INSEAD for tackling such a difficult challenge.
Depending on the statistical methodologies used, innovation country rankings can substantively differ across other innovation indices. These include, inter alia, the BCG/NAM International Innovation Index, the Innovation Union Scoreboard, the Global Innovation Index from the Economist Intelligence Unit and the Global Competitiveness Index from the World Economic Forum.
What is evident from all of these efforts is that innovation does not occur in isolation. One detects a commonality of factors that need to be present to facilitate innovation at national levels. To put it otherwise, innovation arises out of the intersection of a series of interacting initiatives across multiple sectors performed by a broad group of actors — including governments, institutions, firms and, increasingly, ICT-enabled users.
