Title: The Innovation Output Indicator 2017: Methodology Report
Authors: VERTESY DANIEL
Publisher: Publications Office of the European Union
Publication Year: 2017
JRC N°: JRC108942
ISBN: 978-92-79-76474-5 (pdf)
ISSN: 1831-9424 (online)
Other Identifiers: EUR 28876 EN
OP KJ-NA-28876-EN-N (online)
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC108942
DOI: 10.2760/971852
Type: EUR - Scientific and Technical Research Reports
Abstract: This report presents the 2017 update of the Innovation Output Indicator (IOI), which is a composite indicator published by the European Commission since 2013 aiming to quantify the extent to which ideas for new products and services carry an economic added value and are capable of reaching the market. Beyond offering the latest figures for the underlying indicators and composite index, this current edition discusses the revision of the component that measures employment dynamism in fast-growing enterprises in innovative sectors. The new definition aims to simplify the interpretation of the indicator, which now compares countries’ performance in terms of the share of employment in fast-growing enterprises in innovative sectors, rather than weighting sectoral innovation coefficients with sectoral shares of employment in high-growth enterprises. The report also discusses in details how changes in the definition of this component affect the outcomes. The rest of the components, measuring technological innovation by patents, the share of highly skilled labor force feeding into the economic structure of a country, as well as the competitiveness of knowledge-intensive goods and services, remain unchanged with regards to previous editions. Composite results show that the EU is slightly outperformed by the US, while both are trailing Israel and Japan. There is no evidence of convergence, the gap between the EU with respect to the US as well as Japan has persisted over time. When comparing European countries, we notice that Ireland, Sweden, the UK and the Netherlands are among the leaders, whereas we find Croatia, Romania and Lithuania at the end of the ranking. Multivariate statistical analysis shows that it is important to benchmark a country’s performance not only according to its composite scores, but also according to the various components. Most notably, the component measuring employment in fast-growing enterprises in innovative sectors shows a weak, positive association with the rest of the components. This may be interpreted as two aspects of Schumpeterian dynamics, where R&D-based and entrepreneurship-based innovation may require specific, dedicated policies.
JRC Directorate:Joint Research Centre Corporate Activities

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