Measuring innovation intensity: alternatives for implementation in CIS2018

Transcription

1 Measuring innovation intensity: alternatives for implementation in CIS2018 José CERVERA, DevStat ESTAT/G/2015/006

2 Contents and structure of presentation New methods for the quantitative measurement of innovation intensity Conceptual issues: definitions of innovation intensity Operationalisation: measurement of innovation intensity Direct measurement at the project level Direct measurement at firm-level - based on qualitative variables - based on quantitative variables Indirect measurement at firm-level Model-based measurement of intensity

3 Innovation intensity in the revision of OM Measuring innovation activities and capabilities in firms 4.1 Management of change and innovation 4.2 Measuring innovation efforts Statistical operationalisation of the concept of innovation intensity Innovation profiles (characterisation of businesses by reference to innovation /innovation activities) Intensity reflecting innovation management Intensity as quantitative measure of effort Innovation intensity as indicator Innovation indicators and analysis

4 Conceptual issues: definition of innovation intensity Intensity vs Propensity Propensity to innovate Innovation intensity related to the decision to undertake innovation-related activities related to the relative effort of a firm allocated to innovationrelated activities compared with its overall activity

5 Conceptual issues: definition of innovation intensity Intensity vs Propensity Propensity to innovate Innovation intensity related to the decision to undertake innovation-related activities related to the relative effort of a firm allocated to innovationrelated activities compared with its overall activity Propensity of engaging in - Acquisition of machinery, equipment.. - Acquisition of software - In-house R&D - External R&D - Amount invested in - Acquisition of machinery, equipment.. - Acquisition of software - In-house R&D - External R&D -

6 Operational issues: definition of innovation intensity based on self-assessment Percentage of innovative firms = Estimate of propensity to innovate = aggregate dichotomous variable recorded by selfassessment Limited relevance of the indicator percent of innovative enterprises to segment (profile) diverse innovation strategies/ capabilities/ behaviour/outputs; at the firm level, it oversimplifies the process of innovation

7 Conceptual issues: definition of innovation intensity Input, activity and output intensities INPUT ACTIVITIES OUTPUT Multi-variable approach to define intensity Expenditure in innovationrelated activities by type of activity; Break down by intramuros /extramuros activities Human resources allocated to innovation activities Recording the type of innovation-related activities performed (intramuros / extramuros) Innovation projects Related to successful introduction of innovative activities

8 Expenditure in R&D (% of turnover) Understanding innovation with more tan one variable? Acquisition of equipment, machinery (% of turnover)

9 Expenditure in R&D (% of turnover) Measuring by total innovation expenditure confounds the quantitative strategies Internal R&D External R&D Acquisition of equipment, machinery (% of turnover)

10 Operationalisation: measurement of innovation intensity Input intensity: Direct measurement at firm-level by quantitative variables INPUT Expenditure on innovation activities By type of activity or asset By intramuros/extramuros HR in innovation intramuros activities Number of employees (FTE) dedicated to innovation Labour cost of innovation Comparison (ratios) To firm performance or resources Total expenditure/consumption Total sales Total workforce Total innovation expenditure per employee (FTE) Total labour cost To sector data

11 Expenditure in R&D (% of turnover) Measuring innovation expenditure per activity confounds the qualitative strategies Internal R&D External R&D << Acquisition of equipment, machinery (% of turnover)

12 Operationalisation: measurement of innovation intensity Activity intensity: Direct measurement at firm-level by qualitative variables ACTIVITIES Breakdown by activities performed by firms: Large variety of activities, directly linked to innovations or necessary to get external inputs required for innovation: R&D, SW development and database activities, IP-related, design and other creative work, marketing, organisational development, intangible investment Involving internal and external resources Formal (projects) or informal

13 Operationalisation: measurement of innovation intensity Output intensity: Direct measurement at firm-level by quantitative variables OUTPUT Success of implementing innovation activities Number of innovations introduced Number of patents registered Total sales due to new or improved goods and services

14 Expenditure in R&D (% of turnover) Segmenting innovators based on quantitative and qualitative variables Defines innovation projects Does not define innovation projects Acquisition of equipment, machinery (% of turnover)

15 Operationalisation: measurement of innovation intensity Activity intensity: Direct measurement at project-level ACTIVITIES Collecting data on innovation projects contributes to investigating the diversity of innovation activities Organisation of innovation activities as projects vs informal innovation For companies organising innovation as projects, project-level data can be collected (e.g. nr of projects by status, project duration, resources allocated) Possibility of restricting to «most important innovation project» for greater accuracy Requires the definition of innovation projects

16 Operationalisation: measurement of innovation intensity Activity intensity: Direct measurement at project-level Concept of Innovation Project : intersection of project management and innovation literature (Oxford Handbook of Innovation Management, 2013) Possible reference to Frascati Manual s definition of R&D projects: Specific purpose Identifiable outcomes Management (planning, timing, resources, stakeholders) Experiences exist (ZEW) Possible indicators: Organisation of innovation by projects Total expenditure in innovation projects (as share of total expenditure or turnover), broken down by success status of the project Total staff allocated to innovation projects (as share of total staff) broken down by success status of the project.

17 Expenditure in R&D (% of turnover) Segmenting innovators based on quantitative and qualitative variables and comparing with sector Less innovation expenditure compared to its sector,but different strategy Defines innovation projects Does not define innovation projects Not particularly intensive innovator compared to its sector Acquisition of equipment, machinery (% of turnover)

18 Operationalisation: measurement of innovation intensity Indirect measurement at firm-level: Model-based measurement INPUT Input intensity: De Jong (2000): 17 dichotomous variables related to the input, the process and the output to obtain an innovation intensity scale using structural linear models (LISREL). OUTPUT Output intensity: Mairesse and Mohnen (2001) : innovativeness defined as the difference between the observed percentage of innovative sales and the estimated one for a given country, industry and size. Models require adjustment to complex sample surveys, skills in NSOs and cross-country harmonisation of variables in the model

19 Relevant CIS2018 themes for the measurement of innovation intensity (input-activity-output) Theme Theme 1: Basic Enterprise description Theme 2: Business model and strategy of Enterprise Theme 3: Knowledge-based asset creation/ Theme 4: Innovation activities and expenditures Theme 5: Innovation implementation Theme 6: Knowledge flows Theme 7: Innovation environment Theme 8: Innovation outcome and impact Relevance for measurement of innovation intensity Not specific only to provide reference variables/denominators (turnover, nr employees Not relevant Yes activities, expenditure by activity Yes release of new or improved godos/services, customisation, new marketing channels, measures to reduce cost, improved processes, uniqueness of most important innovation Some (who develops product / process innovations, cooperation in inn. Activities, IP behaviour, facilitating business functions) Not relevant Some turnover from innovative products

20 Data collection issues Response burden of direct measurement Breakdown by activity (not necessarily related to accounting systems) Time use of employees / recording time for innovation Modularisation (themes) Themes 3,5,6,8 are relevant for innovation intensity measurement Censoring observations in direct measurement Filtering out non-innovators by self-assessment may lead to underestimation of innovation effort Data quality Cognitive testing (interpretation) vs experimental testing (implementation) of the questionnaire Experimental testing involve designing test cases for different wording of questions and layout Preparation of guidelines, incl. within-record validation rules Coherence across business surveys (to be considered within FRIBS) Calculation of innovation intensity by comparison with sector data

21 Data analysis issues: Statistical methods Identifying determinants to engage in innovation activities 2K dichotomous variables describe the engagement in K innovation activities at internal/external level (ACTIVITY INTENSITY) Multivariate logit models Explaining the allocation of resources to innovation K positive variables describe the investment/expenditure in each innovation category, adding up to Total Expenditure in Innovation (INPUT INTENSITY) Multivariate Tobit models (truncated response variables) Compositional data analysis (what to do with zero investments?) Profiling innovation strategies Cluster analysis of binary vectors (describing the engagement in innovation activities), using non-euclidean distances Unsupervised learning, latent methods Explaining the relationship between input & activities and output (and impact) Linkage with other sources (business surveys, financial récords) Multivariate regression Tree regression (model-free)

22 Conclusions Potential contribution for CIS2018 Possible operational definition of intensity by a selection of innovation-related activities including the breakdown by place of implementation (intramuros/extramuros) and the investment in different innovation-enabling assets measurement on innovators / all firms without censoring Ideas for profiling firms based on activities and resources allocated to innovation, richer than the dichotomy innovator /non-innovator a relative (to its own resources) allocation of resources to a series of activities (largely corresponding to those selected above) higher than the average values in the firm s industry or size class measurement at the level of projects