Download Innovation: the transfer function of Science and Technology

Innovation indicators: how
reliable?
J.P.CONTZEN
Instituto Superior Técnico
Lisbon, February 6th, 2004
How to interpret EC indicators? (1)


The European Commission is publishing
since a decade a set of S&T indicators
(Professor Antonio Ruberti’s initiative)
They are now dealing also with issues
linked to the Knowledge-based economy:
investment in the KBE and performance
of the KBE. Do these indicators provide a
insight in the efficiency of the Innovation
process?
How to interpret EC indicators? (2)

Doubts can be formulated about such
insight:

Component indicators for the composite
indicator of investment in the KBE do not
take into account the efforts –money and
people – involved in the innovation
transformation process itself, neither the
efforts put in developing markets and
applications
EXTERNAL
FACTORS
SYSTEM
PARAMETERS
OTHER
INNOVATION
INPUTS
KC
INPUT
PARAMETERS
KNOWLEDGE
CREATION
INT. or EXT.
SOCIETAL
DEMAND
KC OUTPUT
EXTERNAL
CONDITIONS
INNOVATION
OUTPUTS
INNOVATION
SOCIETAL
DEMAND
APPLICATIONS
IN SOCIETY
INT. or EXT.
How to interpret EC indicators? (3)



Component indicators for the composite
indicator of performance in the KBE mix
scientific outputs, education success, patents
output with such end products as productivity
and facilitators such as E-commerce.
Where are indicators such as job creation,
creation of enterprises, etc.?
Nowhere, there is an attempt to correlate an
investment of 5-to 10 years ago with the
current performance.
How to interpret EC indicators? (4)

Interpretation of some data in terms of
innovation performance are hazardous:

For employment in high tech and medium
high tech industries as % of total
employment, the Czech Republic comes first,
followed by Germany, Slovenia, Sweden,
Hungary, Ireland, Finland, Slovakia, Italy, all
above EU 15 average. Does that mean the
Eastern European countries are champions in
Innovation or simply they attract FDI?
How to interpret EC indicators? (5)
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
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The same applies mutatis mutandis to the value added
of high tech and medium high tech industries as % of
total gross value added: Ireland is first, Malta is
second! Romania does better than Portugal!
Again, high tech exports as % of total exports yield
results that require further analysis: Malta comes first
before Ireland, Luxemburg. UK and France follow
For patents, Switzerland is a clear leader. Did this lead
translate in success for the Swiss industry?
How to interpret EC indicators? (6)

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In summary, great care should be
exercised in using such figures
Some indicators do exist that give a
clearer picture such as total
entrepreneurial activity, business angels
prevalence, new venture capital funds
raised relative to GDP, investment by
institutionals in venture capital.