Urenio Watch Watch: Innovation Measurement

Innovation Performance

European Trend Chart on Innovation outlines five methods for calculating a composite innovation index from a number of analytical indicators. These methods may be useful for estimating overall innovation performance of countries, regions, industry sectors, even companies. For each method the advantages and disadvantages are presented.

1. Number of indicators above the mean minus the number below the mean (SII).

2. Summing percentage differences from the mean

3. Standardized values (z scores) for each indicator

4. Re-scaled values. The rescaled scores vary within the identical range for each indicator (0 to 1).

5. Best performance. (Special case of Method 4)

Compilations of innovation indicators that have developed a composite index either give equal weightings to each indicator or give a subjective weighting in simple units such as ‘0.5’ or ‘0.75’. The rationale for the use of simple weightings is that it is impossible to carefully calculate weights without a measure of the latent phenomena, such as national innovative capability.

More: Innovation Scoreboard 2003, Technical Paper No 6, Methodology Report, pp. 2-3

Source: http://trendchart.cordis.lu/scoreboards/scoreboard2003/pdf/eis_2003_tp6_methodology.pdf