Science-, Technology and Innovation Indicators

Merit course – 2006� Productivity (growth accounting & total factor

productivity)� Research and Development (R&D)� Patents & patent citations� Bibliometrics (publications & citations)� Innovation surveys

Total factor productivity

� “The economist’s answer to measuring the impact of science and technology”

� An indirect way� Links innovation to it’s most important impact:

the increase in the standard of living

Growth accounting

� Tinbergen/Abramovitz/Solow:

� A measure of technological change or a measure of our ignorance?

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Figure 6. Substitution and technological change in theproduction function

Growth accounting results (Solow)

TFP growth for the Netherlands, 1921-2002

80

90

100

110

120

130

140

150

1920 1940 1960 1980 2000

Research and Development (R&D)

� Defined strictly in the Frascati Manual (OECD)– This defines R&D as the development of new

knowledge and new practical applications of knowledge (research such as exploration of new oil fields is excluded)

– Provides a practical manual for collection R&D statistics, e.g. categories of R&D performers, R&D funders, R&D categories, etc.

– R&D data systematically available since early 1960s

Endogenous technological change –R&D

Non-military R&D as a % of GDP

1.0

1.5

2.0

2.5

3.0

3.5

EU

Japa

n

US

OE

CD

Total R&D as a % of GDP

1.0

1.5

2.0

2.5

3.0

3.5

EU

Japa

n

US

OE

CD

R&D researchers as a % of total employment

4

5

6

7

8

9

10

11

EU

Japa

n

US

OE

CD

% R&D financed by businesses

50

55

60

65

70

75

EU

Japa

n

US

OE

CD

Q�AR �K 1��L �,Q�AR �K 1��L �,

BERD and productivity

0.00

0.50

1.00

1.50

2.00

2.50

1950 1960 1970 1980 1990 2000 2010

France United Kingdom Japan United States

Country αααα ρρρρ

France 0.860 (0.000) -0.031 (0.273)

United Kingdom 0.421 (0.023) 0.395 (0.067)

Japan 0.478 (0.000) 0.155 (0.000)

United States 0.521 (0.000) 0.237 (0.000)Table 1. Estimations results for the equation including business R&D as a production factor,1959 - 1999.

Patents

� Output indicator� Counts of patents are a raw indicator: they do

not provide any information about the commercial use or value (many patents are never used)

� The propensity to patent innovations differs greatly between sectors (e.g., pharmaceuticals high, aerospace low)

� Patent counts sensitive to bureaucracy at the patent office

International patenting

� Patents in large international markets are considered the best indicators (USPTO, EPO)

� But these are influenced by the home country bias

� A solution is to look at “Triad patents”(patents applied for in EU-US-JP), or, more generally, at patent equivalents in the various systems (OECD database)– Based on priority numbers

Specialization indicators

� Take the share of a country in a sector (1)� Take the share of the country in total (2)� Divide (1) by (2)� This is an indicator of specialization (<1 or

>1)� But it is asymmetric: negative specialization in

[0,1], positive specialization in [1, ∞]– Solution: take ln()– Solution: (X+1)/(X-1)

Patent citations

� Patents cite other patents (and non-patent literature)

� This may be taken as indicator of technological relatedness, or even technology spillovers– Used to measure international spillovers, or the

geographical concentration of spillovers

� But remember that patent citations are a legal instrument, aimed at excluding patentable knowledge

The bureaucratic factor

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1980 1985 1990 1995 2000 2005

citations to patents citations to non-patent literature

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Bibliometrics – measuring science

� Counting publications– Based on available databases, which have

particular biases towards specific fields of science, and towards publications in English

� Citations as a measure of “visibility” or quality� Do scientific publications contribute to a

“world stock” of knowledge or to “national stocks”?

� Cooperation: co-publishing� Networks of knowledge flows: citations

Innovation indicators

� Emerged out of the fear that R&D indicators provide a limited picture of innovation– R&D is an input, and there might be differences in

efficiency of turning inputs into outputs– Innovation is a broader process than just R&D

(chain-linked model)

� Community Innovation Survey (CIS) in Europe: a panel of innovation data

� Now also innovation surveys outside Europe (e.g., Brazil, South Africa)

Measuring Innovation and Innovation expenditures

� Did your enterprise have any– Product innovations new to the firm?– Product innovations new to the market?– Process innovations– Service innovations

� List expenditure in the following catagories:– R&D– New machinery and equipment– Acquisition of external technology– Design of new products– Training related to innovation– Marketing of new products

Distribution of sales

� Share of total sales of– Unchanged products– Slightly improved products– Product innovations (new to the firm, new to the

market)

The process of innovation

� Importance of knowledge sources– E.g., universities, clients, suppliers, competitors,

PROs

� Problems related to innovation– Etc. finance, regulations, etc.