Urenio Watch Watch: Innovation Measurement

Knowledge Assessment Methodology

The World Bank Institute´s Knowledge for Development (K4D) program helps developing countries make more effective use of knowledge for their overall economic and social development. The K4D program provides knowledge assessment and policy development services, capacity building and skills enhancement services. As part of its toolkit, the K4D program uses a Knowledge Assessment Methodology (KAM) that helps to benchmark how an economy compares with its neighbors, competitors, or others it wishes to emulate.

The knowledge assessment methodology (KAM) helps countries understand their strengths and weaknesses in making the transition to the knowledge economy. It is thus useful in identifying the challenges and opportunities that a country faces, and where it may need to focus policy attention or future investments. In so doing, the KAM provides a preliminary knowledge economy assessment of a country, which can form the basis for more detailed sector-specific work.

The KAM consists of a set of 80 structural and qualitative variables that serve as proxies for the aforementioned four pillars that are critical to the development of a knowledge economy. The comparison is undertaken for a group of 128 countries which includes most of the developed OECD economies and over 90 developing countries.

The Basic Scorecard uses three variables as proxies to describe each of the four Knowledge Economy (KE) pillars: (1)n Economic Incentive and institutional Regime, (2) Education, (3) Innovation, and (4) Information Communications & Technology, plus two variables that describe economic and social performance.

Two versions have been developed: The default weighted Basic Scorecard version, in which the three Innovation variables are weighted by population, and the unweighted Basic Scorecard version in which the same three Innovation variables are presented in terms of absolute values.

In Innovation, absolute size of resources matters, because there are strong economies of scale in the production of knowledge and because knowledge is not consumed in its use. Populous countries, such as India and China, have a critical mass of innovative capacity which is not reflected when scaled by population.

In the Basic Scorecard mode, a country or region’s performance is depicted in a scorecard format with the values for each variable shown – depending on the selection made – either in normalized or nominal value format. The comparison can be done for two points in time (1995 -or closest available- and for the most recent available year).

The mode also allows for bar chart and diamond chart comparisons, also for two points in time, where the aggregate performance in each of the four KE pillars is demonstrated. The bar chart also allows for demonstration of performance in the aggregate Knowledge Economy Index (KEI) and Knowledge Index (KI). The user may also choose to plot up to three regions or countries in the same scorecard or diamond chart only for one period at a time.

KAM also contains four other modes which allow the user to:

    Create his/her own scorecard by using any combination of variables (80 in total) grouped in seven functional clusters to compare up to two countries or regions using data for the most recent available year. The graphic comparison is represented in a scorecard format. The list of 80 variables includes both the weighted and unweighted Innovation variables.
    Make cross-country comparisons of up to 20 countries in a bar chart format. By selecting the World option the user can compare countries from the complete sample list of 128 countries included in the database. Each bar chart represents the most recent aggregate KEI score for a selected region or country, split into the four KE pillars.
    Make global knowledge economy comparisons which are plotted in a chart based on their performance in the Basic Scorecard knowledge indicators in two points in time (1995 and most recent). The graph is split by a 45 degree line. Those countries or regions that are plotted below the line indicate a regression in their performance throughout time. The countries or regions that are marked above the line signify improvement throughout time, while those countries that are plotted on the line indicate stagnation.