Innovation is the practical implementation of ideas that result in the introduction of

new goods or services or improvement in offering goods or services.[1] ISO TC 279 in

the standard ISO 56000:2020 defines innovation as "a new or changed entity, realizing
or redistributing value".[2] Others have different definitions; a common element in the
definitions is a focus on newness, improvement, and spread of ideas or technologies.

Innovation often takes place through the development of more-effective products,

processes, services, technologies, art works[3] or business
models that innovators make available to markets, governments and society.

Innovation is related to, but not the same as, invention:[4] innovation is more apt to
involve the practical implementation of an invention (i.e. new / improved ability) to make
a meaningful impact in a market or society,[5] and not all innovations require a new
invention.[6]

Technical innovation often manifests itself via the engineering process when the
problem being solved is of a technical or scientific nature. The opposite of innovation
is exnovation.

Definition
[edit]

Surveys of the literature on innovation have found a variety of definitions. In 2009,

Baregheh et al. found around 60 definitions in different scientific papers, while a 2014
survey found over 40.[7] Based on their survey, Baragheh et al. attempted to formulate a
multidisciplinary definition and arrived at the following:

"Innovation is the multi-stage process whereby organizations transform ideas into

new/improved products, service or processes, in order to advance, compete and
differentiate themselves successfully in their marketplace"[8]
In a study of how the software industry considers innovation, the following definition
given by Crossan and Apaydin was considered to be the most complete. Crossan and
Apaydin built on the definition given in the Organisation for Economic Co-operation and
Development (OECD) Oslo Manual:[7]

Innovation is production or adoption, assimilation, and exploitation of a value-added

novelty in economic and social spheres; renewal and enlargement of products, services,
and markets; development of new methods of production; and the establishment of new
management systems. It is both a process and an outcome.
American sociologist Everett Rogers, defined it as follows:

"An idea, practice, or object that is perceived as new by an individual or other unit of
adoption"[9]
According to Alan Altshuler and Robert D. Behn, innovation includes original invention
and creative use. These writers define innovation as generation, admission and
realization of new ideas, products, services and processes.[10]

Two main dimensions of innovation are degree of novelty (i.e. whether an innovation is
new to the firm, new to the market, new to the industry, or new to the world) and kind of
innovation (i.e. whether it is process or product-service system innovation).
[7]
Organizational researchers have also distinguished innovation separately from
creativity, by providing an updated definition of these two related constructs:

Workplace creativity concerns the cognitive and behavioral processes applied when
attempting to generate novel ideas. Workplace innovation concerns the processes
applied when attempting to implement new ideas. Specifically, innovation involves some
combination of problem/opportunity identification, the introduction, adoption or
modification of new ideas germane to organizational needs, the promotion of these
ideas, and the practical implementation of these ideas.[11]
Peter Drucker wrote:

Innovation is the specific function of entrepreneurship, whether in an existing business,

a public service institution, or a new venture started by a lone individual in the family
kitchen. It is the means by which the entrepreneur either creates new wealth-producing
resources or endows existing resources with enhanced potential for creating wealth.[12]
Creativity and innovation
[edit]

In general, innovation is distinguished from creativity by its emphasis on the

implementation of creative ideas in an economic setting. Amabile and Pratt in 2016,
drawing on the literature, distinguish between creativity ("the production of novel and
useful ideas by an individual or small group of individuals working together") and
innovation ("the successful implementation of creative ideas within an organization").[13]

Economics and innovation

[edit]

In 1957 the economist Robert Solow was able to demonstrate that economic
growth had two components. The first component could be attributed to growth
in production including wage labour and capital. The second component was found to
be productivity. Ever since, economic historians have tried to explain the process of
innovation itself, rather than assuming that technological inventions and technological
progress result in productivity growth.[14]

The concept of innovation emerged after the Second World War, mostly thanks to the
works of Joseph Schumpeter (1883–1950) who described the economic effects of
innovation processes as Constructive destruction. Today, consistent neo-
Schumpeterian scholars see innovation not as neutral or apolitical processes.[15]
[16]
Rather, innovation can be seen as socially constructed processes. Therefore, its
conception depends on the political and societal context in which innovation is taking
place.[17] According to Shannon Walsh, "innovation today is best understood as
innovation under capital" (p. 346).[18] This means that the current hegemonic purpose for
innovation is capital valorisation and profit maximization, exemplified by the
appropriation of knowledge (e.g., through patenting), the widespread practice
of Planned obsolescence (incl. lack of repairability by design), and the Jevons paradox,
that describes negative consequences of eco-efficiency as energy-reducing effects tend
to trigger mechanisms leading to energy-increasing effects.[19]

Types
[edit]

Several frameworks have been proposed for defining types of innovation.[20][21][22]

Sustaining vs disruptive innovation

[edit]

An 1880 penny-farthing (left), and a

1886 Rover safety bicycle with gearing

One framework proposed by Clayton Christensen draws a distinction between

sustaining and disruptive innovations.[23] Sustaining innovation is the improvement of a
product or service based on the known needs of current customers (e.g. faster
microprocessors, flat screen televisions). Disruptive innovation in contrast refers to a
process by which a new product or service creates a new market (e.g. transistor radio,
free crowdsourced encyclopedia, etc.), eventually displacing established competitors.[24]
[25]
According to Christensen, disruptive innovations are critical to long-term success in
business.[26]

Disruptive innovation is often enabled by disruptive technology. Marco Iansiti and Karim
R. Lakhani define foundational technology as having the potential to create new
foundations for global technology systems over the longer term. Foundational
technology tends to transform business operating models as entirely new business
models emerge over many years, with gradual and steady adoption of the innovation
leading to waves of technological and institutional change that gain momentum more
slowly.[27][additional citation(s) needed] The advent of the packet-switched communication
protocol TCP/IP—originally introduced in 1972 to support a single use case for United
States Department of Defense electronic communication (email), and which gained
widespread adoption only in the mid-1990s with the advent of the World Wide Web—is
a foundational technology.[27]

Four types of innovation model

[edit]

Another framework was suggested by Henderson and Clark. They divide innovation into
four types;

 Radical innovation: "establishes a new dominant design and, hence, a new set of core
design concepts embodied in components that are linked together in a new architecture."
(p. 11)[28]
 Incremental innovation: "refines and extends an established design. Improvement occurs
in individual components, but the underlying core design concepts, and the links between
them, remain the same." (p. 11)[28]
 Architectural innovation: "innovation that changes only the relationships between them
[the core design concepts]" (p. 12)[28]
 Modular Innovation: "innovation that changes only the core design concepts of a
technology" (p. 12)[28]
While Henderson and Clark as well as Christensen talk about technical innovation there
are other kinds of innovation as well, such as service innovation and organizational
innovation.

Non-economic innovation
[edit]

As distinct from business-centric views of innovation concentrating on generating profit

for a firm, other types of innovation include: social innovation, religious innovation,
[29]
sustainable innovation (or green innovation),[30] and responsible innovation.[31]

Open innovation
[edit]

One type of innovation that has been the focus of recent literature is open innovation or
"crowd sourcing." Open innovation refers to the use of individuals outside of an
organizational context who have no expertise in a given area to solve complex
problems.[32]

User innovation
[edit]

Similar to open innovation, user innovation is when companies rely on users of their
goods and services to come up with, help to develop, and even help to implement new
ideas.[32]

History
[edit]
See also: Innovation economics

Innovation must be understood in the historical setting in which its processes were and
are taking place.[17] The first full-length discussion about innovation was published by the
Greek philosopher and historian Xenophon (430–355 BCE). He viewed the concept as
multifaceted and connected it to political action. The word for innovation that he
uses, kainotomia, had previously occurred in two plays by Aristophanes (c. 446 – c.
386 BCE). Plato (died c. 348 BCE) discussed innovation in his Laws dialogue and was
not very fond of the concept. He was skeptical to it both in culture (dancing and art) and
in education (he did not believe in introducing new games and toys to the kids).
[33]
Aristotle (384–322 BCE) did not like organizational innovations: he believed that all
possible forms of organization had been discovered.[34]

Before the 4th century in Rome, the words novitas and res nova / nova res were used
with either negative or positive judgment on the innovator. This concept meant
"renewing" and was incorporated into the new Latin verb word innovo ("I renew" or "I
restore") in the centuries that followed. The Vulgate version of the Bible (late 4th century
CE) used the word in spiritual as well as political contexts. It also appeared in poetry,
mainly with spiritual connotations, but was also connected to political, material and
cultural aspects.[33]

Machiavelli's The Prince (1513) discusses innovation in a political setting. Machiavelli

portrays it as a strategy a Prince may employ in order to cope with a constantly
changing world as well as the corruption within it. Here innovation is described as
introducing change in government (new laws and institutions); Machiavelli's later
book The Discourses (1528) characterises innovation as imitation, as a return to the
original that has been corrupted by people and by time.[citation needed] Thus for Machiavelli
innovation came with positive connotations. This is however an exception in the usage
of the concept of innovation from the 16th century and onward. No innovator from the
renaissance until the late 19th century ever thought of applying the word innovator upon
themselves, it was a word used to attack enemies.[33]

From the 1400s[citation needed] through the 1600s, the concept of innovation was pejorative –
the term was an early-modern synonym for "rebellion", "revolt" and "heresy".[35][36][37][38][39] In
the 1800s[timeframe?] people promoting capitalism saw socialism as an innovation and spent
a lot of energy working against it. For instance, Goldwin Smith (1823-1910) saw the
spread of social innovations as an attack on money and banks. These social
innovations were socialism, communism, nationalization, cooperative associations.[33]

In the 20th century, the concept of innovation did not become popular until after the
Second World War of 1939–1945. This is the point in time when people started to talk
about technological product innovation and tie it to the idea of economic growth and
competitive advantage.[40] Joseph Schumpeter (1883–1950), who contributed greatly to
the study of innovation economics, is seen as the one who made the term popular.
Schumpeter argued that industries must incessantly revolutionize the economic
structure from within, that is: innovate with better or more effective processes and
products, as well as with market distribution (such as the transition from the craft shop
to factory). He famously asserted that "creative destruction is the essential fact
about capitalism".[41] In business and in economics, innovation can provide a catalyst for
growth when entrepreneurs continuously search for better ways to satisfy
their consumer base with improved quality, durability, service and price - searches
which may come to fruition in innovation with advanced technologies and organizational
strategies.[42] Schumpeter's findings coincided with rapid advances
in transportation and communications in the beginning of the 20th century, which had
huge impacts for the economic concepts of factor endowments and comparative
advantage as new combinations of resources or production techniques constantly
transform markets to satisfy consumer needs. Hence, innovative behaviour becomes
relevant for economic success.[43]

Process of innovation
[edit]

An early model included only three phases of innovation. According to Utterback (1971),
these phases were: 1) idea generation, 2) problem solving, and 3) implementation.[44] By
the time one completed phase 2, one had an invention, but until one got it to the point of
having an economic impact, one did not have an innovation. Diffusion was not
considered a phase of innovation. Focus at this point in time was on manufacturing.

A prime example of innovation involved the boom of Silicon Valley start-ups out of
the Stanford Industrial Park. In 1957, dissatisfied employees of Shockley
Semiconductor, the company of Nobel laureate William Shockley, co-inventor of
the transistor, left to form an independent firm, Fairchild Semiconductor. After several
years, Fairchild developed into a formidable presence in the sector.[which?] Eventually,
these founders left to start their own companies based on their own unique ideas, and
then leading employees started their own firms. Over the next 20 years this process
resulted in the momentous startup-company explosion of information-technology firms.
[citation needed]
Silicon Valley began as 65 new enterprises born out of Shockley's eight former
employees.[45]

All organizations can innovate,[46] including for example hospitals, universities, and local
governments.[47] The organization requires a proper structure in order to retain
competitive advantage. Organizations can also improve profits and performance by
providing work groups opportunities and resources to innovate, in addition to
employee's core job tasks.[48] Executives and managers have been advised to break
away from traditional ways of thinking and use change to their advantage.[49] The world
of work is changing with the increased use of technology and companies are becoming
increasingly competitive. Companies will have to downsize or reengineer their
operations to remain competitive. This will affect employment as businesses will be
forced to reduce the number of people employed while accomplishing the same amount
of work if not more.[50]

For instance, former Mayor Martin O'Malley pushed the City of Baltimore to use CitiStat,
a performance-measurement data and management system that allows city officials to
maintain statistics on several areas from crime trends to the conditions of potholes. This
system aided in better evaluation of policies and procedures with accountability and
efficiency in terms of time and money. In its first year, CitiStat saved the city $13.2
million.[51] Even mass transit systems have innovated with hybrid bus fleets to real-time
tracking at bus stands. In addition, the growing use of mobile data terminals in vehicles,
that serve as communication hubs between vehicles and a control center, automatically
send data on location, passenger counts, engine performance, mileage and other
information. This tool helps to deliver and manage transportation systems.[52]

Still other innovative strategies include hospitals digitizing medical information

in electronic medical records. For example, the U.S. Department of Housing and Urban
Development's HOPE VI initiatives turned severely distressed public housing in urban
areas into revitalized, mixed-income environments; the Harlem Children's Zone used a
community-based approach to educate local area children; and the Environmental
Protection Agency's brownfield grants facilitates turning
over brownfields for environmental protection, green
spaces, community and commercial development.

Further information: Demand articulation

Sources of innovation
[edit]

Innovation may occur due to effort from a range of different agents, by chance, or as a
result of a major system failure. According to Peter F. Drucker, the general sources of
innovations are changes in industry structure, in market structure, in local and global
demographics, in human perception, in the amount of available scientific knowledge,
etc.[12]

Original model of three phases of the process of Technological

Change

In the simplest linear model of innovation the traditionally recognized source

is manufacturer innovation. This is where a person or business innovates in order to sell
the innovation.

Another source of innovation is end-user innovation. This is where a person or company

develops an innovation for their own (personal or in-house) use because existing
products do not meet their needs. MIT economist Eric von Hippel identified end-user
innovation as the most important source in his classic book on the subject, "The
Sources of Innovation".[53]

The robotics engineer Joseph F. Engelberger asserts that innovations require only three
things:

1. a recognized need
2. competent people with relevant technology
 3. financial support[54]
The Kline chain-linked model of innovation[55] places emphasis on potential market
needs as drivers of the innovation process, and describes the complex and often
iterative feedback loops between marketing, design, manufacturing, and R&D.

In the 21st century the Islamic State (IS) movement, while decrying religious
innovations, has innovated in military tactics, recruitment, ideology and geopolitical
activity.[56][57]

Facilitating innovation
[edit]

Innovation by businesses is achieved in many ways, with much attention now given to
formal research and development (R&D) for "breakthrough innovations". R&D help spur
on patents and other scientific innovations that leads to productive growth in such areas
as industry, medicine, engineering, and government.[58] Yet, innovations can be
developed by less formal on-the-job modifications of practice, through exchange and
combination of professional experience and by many other routes. Investigation of
relationship between the concepts of innovation and technology transfer revealed
overlap.[59] The more radical and revolutionary innovations tend to emerge from R&D,
while more incremental innovations may emerge from practice – but there are many
exceptions to each of these trends.

Information technology and changing business processes and management style can
produce a work climate favorable to innovation.[60] For example, the software tool
company Atlassian conducts quarterly "ShipIt Days" in which employees may work on
anything related to the company's products.[61] Google employees work on self-directed
projects for 20% of their time (known as Innovation Time Off). Both companies cite
these bottom-up processes as major sources for new products and features.

An important innovation factor includes customers buying products or using services. As

a result, organizations may incorporate users in focus groups (user centered approach),
work closely with so-called lead users (lead user approach), or users might adapt their
products themselves. The lead user method focuses on idea generation based on
leading users to develop breakthrough innovations. U-STIR, a project to
innovate Europe's surface transportation system, employs such workshops.
[62]
Regarding this user innovation, a great deal of innovation is done by those actually
implementing and using technologies and products as part of their normal activities.
Sometimes user-innovators may become entrepreneurs, selling their product, they may
choose to trade their innovation in exchange for other innovations, or they may be
adopted by their suppliers. Nowadays, they may also choose to freely reveal their
innovations, using methods like open source. In such networks of innovation the users
or communities of users can further develop technologies and reinvent their social
meaning.[63][64]

One technique for innovating a solution to an identified problem is to actually attempt an

experiment with many possible solutions.[65] This technique was famously used
by Thomas Edison's laboratory to find a version of the incandescent light
bulb economically viable for home use, which involved searching through thousands of
possible filament designs before settling on carbonized bamboo.

This technique is sometimes used in pharmaceutical drug discovery. Thousands of

chemical compounds are subjected to high-throughput screening to see if they have any
activity against a target molecule which has been identified as biologically significant to
a disease. Promising compounds can then be studied; modified to improve efficacy and
reduce side effects, evaluated for cost of manufacture; and if successful turned into
treatments.

The related technique of A/B testing is often used to help optimize the design of web
sites and mobile apps. This is used by major sites such
as amazon.com, Facebook, Google, and Netflix.[66] Procter & Gamble uses computer-
simulated products and online user panels to conduct larger numbers of experiments to
guide the design, packaging, and shelf placement of consumer products.[67] Capital
One uses this technique to drive credit card marketing offers.[66]

Goals and failures of innovation

[edit]

Scholars have argued that the main purpose for innovation today is profit
maximization and capital valorisation.[68][17] Consequently, programs of organizational
innovation are typically tightly linked to organizational goals and growth objectives, to
the business plan, and to market competitive positioning. Davila et al. (2006) note,
"Companies cannot grow through cost reduction and reengineering alone... Innovation
is the key element in providing aggressive top-line growth, and for increasing bottom-
line results".[69] One survey across a large number of manufacturing and services
organizations found that systematic programs of organizational innovation are most
frequently driven by: improved quality, creation of new markets, extension of
the product range, reduced labor costs, improved production processes, reduced
materials cost, reduced environmental damage, replacement of products/services,
reduced energy consumption, and conformance to regulations.[69]

Different goals are appropriate for different products, processes, and services.
According to Andrea Vaona and Mario Pianta, some example goals of innovation could
stem from two different types of technological strategies: technological
competitiveness and active price competitiveness. Technological competitiveness may
have a tendency to be pursued by smaller firms and can be characterized as "efforts for
market-oriented innovation, such as a strategy of market expansion and patenting
activity."[70] On the other hand, active price competitiveness is geared toward process
innovations that lead to efficiency and flexibility, which tend to be pursued by large,
established firms as they seek to expand their market foothold.[70] Whether innovation
goals are successfully achieved or otherwise depends greatly on the environment
prevailing in the organization.[71]
Organization-internal innovation failures
[edit]

Failure of organizational innovation programs has been widely researched and the
causes vary considerably. Some causes are external to the organization and outside its
influence of control. Others are internal and ultimately within the control of the
organization. Internal causes of failure can be divided into causes associated with the
cultural infrastructure and causes associated with the innovation process itself. David
O'Sullivan wrote that causes of failure within the innovation process in most
organizations can be distilled into five types: poor goal definition, poor alignment of
actions to goals, poor participation in teams, poor monitoring of results, and poor
communication and access to information.[72]

Environmental and social innovation failures

[edit]

Innovation is generally framed as an inherently positive force, delivering growth and

prosperity for all, and is often deemed as both inevitable and unstoppable.[17] In this
sense, future innovations are often hailed as solutions to current problems, such
as climate change. This business-as-usual approach would mean continued and
increased globalization as well as quick innovation cycles which supposedly will
maximize the competitiveness of processes, in the end leading to Eco-economic
decoupling or Green growth. Yet, it is unclear whether innovative solutions will be
capable of solving the climate crisis: According to Mario Giampietro and Silvio
Funtowicz (2020), this positive framing of innovation "demonstrates [a] lack of
understanding of the biophysical roots of the economic process and the seriousness of
the sustainability crisis".[73] This is due to the fact that innovation can be understood in its
specific historic and cultural context: The prevailing hegemonic view on innovation, as
emphasized by Ben Robra et al. (2023), aligns closely with capitalist mode of
production, shown by the mantra of 'innovate or die.'[17] From this viewpoint, innovation is
primarily driven by the imperative of capital accumulation, serving the sole purpose of
increasing returns, neglecting societal needs such as a clean environment or social
equality and in general the biophysical limits of our planet.[74][75]

Diffusion
[edit]
Main article: Diffusion of innovations
Diffusion of innovation research was first started in 1903 by seminal researcher Gabriel
Tarde, who first plotted the S-shaped diffusion curve. Tarde defined the innovation-
decision process as a series of steps that include:[76]

1. knowledge
2. forming an attitude
3. a decision to adopt or reject
4. implementation and use
5. confirmation of the decision
Once innovation occurs, innovations may be spread from the innovator to other
individuals and groups. This process has been proposed that the lifecycle of innovations
can be described using the 's-curve' or diffusion curve. The s-curve maps growth of
revenue or productivity against time. In the early stage of a particular innovation, growth
is relatively slow as the new product establishes itself. At some point, customers begin
to demand and the product growth increases more rapidly. New incremental innovations
or changes to the product allow growth to continue. Towards the end of its lifecycle,
growth slows and may even begin to decline. In the later stages, no amount of new
investment in that product will yield a normal rate of return.

Innovation adoption[77] of several common household items in

the U.S.[78] (more charts)

The s-curve derives from an assumption that new products are likely to have "product
life" – i.e., a start-up phase, a rapid increase in revenue and eventual decline. In fact,
the great majority of innovations never get off the bottom of the curve, and never
produce normal returns.

Innovative companies will typically be working on new innovations that will eventually
replace older ones. Successive s-curves will come along to replace older ones and
continue to drive growth upwards. In the figure above the first curve shows a current
technology. The second shows an emerging technology that currently yields lower
growth but will eventually overtake current technology and lead to even greater levels of
growth. The length of life will depend on many factors.[79]

Measuring innovation
[edit]

Measuring innovation is inherently difficult as it implies commensurability so that

comparisons can be made in quantitative terms. Innovation, however, is by definition
novelty. Comparisons are thus often meaningless across products or service.
[80]
Nevertheless, Edison et al.[81] in their review of literature on innovation
management found 232 innovation metrics. They categorized these measures along
five dimensions; i.e. inputs to the innovation process, output from the innovation
process, effect of the innovation output, measures to access the activities in an
innovation process and availability of factors that facilitate such a process.[81]

There are two different types of measures for innovation: the organizational level and
the political level.

Organizational-level
[edit]
The measure of innovation at the organizational level relates to individuals, team-level
assessments, and private companies from the smallest to the largest company. Measure
of innovation for organizations can be conducted by surveys, workshops, consultants, or
internal benchmarking. There is today no established general way to measure
organizational innovation. Corporate measurements are generally structured
around balanced scorecards which cover several aspects of innovation such as
business measures related to finances, innovation process efficiency, employees'
contribution and motivation, as well benefits for customers. Measured values will vary
widely between businesses, covering for example new product revenue, spending in
R&D, time to market, customer and employee perception & satisfaction, number of
patents, additional sales resulting from past innovations.[82]
Political-level
[edit]
For the political level, measures of innovation are more focused on a country or
region competitive advantage through innovation. In this context, organizational
capabilities can be evaluated through various evaluation frameworks, such as those of
the European Foundation for Quality Management. The OECD Oslo Manual (1992)
suggests standard guidelines on measuring technological product and process
innovation. Some people consider the Oslo Manual complementary to the Frascati
Manual from 1963. The new Oslo Manual from 2018 takes a wider perspective to
innovation, and includes marketing and organizational innovation. These standards are
used for example in the European Community Innovation Surveys.[83]
Other ways of measuring innovation have traditionally been expenditure, for
example, investment in R&D (Research and Development) as percentage of
GNP (Gross National Product). Whether this is a good measurement of
innovation has been widely discussed and the Oslo Manual has incorporated
some of the critique against earlier methods of measuring. The traditional
methods of measuring still inform many policy decisions. The EU Lisbon
Strategy has set as a goal that their average expenditure on R&D should be 3%
of GDP.[84]

Indicators
[edit]

Many scholars claim that there is a great bias towards the "science and
technology mode" (S&T-mode or STI-mode), while the "learning by doing, using
and interacting mode" (DUI-mode) is ignored and measurements and research
about it rarely done. For example, an institution may be high tech with the latest
equipment, but lacks crucial doing, using and interacting tasks important for
innovation.[85]

A common industry view (unsupported by empirical evidence) is that

comparative cost-effectiveness research is a form of price control which reduces
returns to industry, and thus limits R&D expenditure, stifles future innovation and
compromises new products access to markets.[86] Some academics claim cost-
effectiveness research is a valuable value-based measure of innovation which
accords "truly significant" therapeutic advances (i.e. providing "health gain")
higher prices than free market mechanisms.[87] Such value-based pricing has
been viewed as a means of indicating to industry the type of innovation that
should be rewarded from the public purse.[88]

An Australian academic developed the case that national comparative cost-

effectiveness analysis systems should be viewed as measuring "health
innovation" as an evidence-based policy concept for valuing innovation distinct
from valuing through competitive markets, a method which requires strong anti-
trust laws to be effective, on the basis that both methods of
assessing pharmaceutical innovations are mentioned in annex 2C.1 of
the Australia-United States Free Trade Agreement.[89][90][91]

Indices
[edit]

Several indices attempt to measure innovation and rank entities based on these
measures, such as:

 Bloomberg Innovation Index

 "Bogota Manual"[92] similar to the Oslo Manual, is focused on Latin America and the
Caribbean countries.[citation needed]
 "Creative Class" developed by Richard Florida[citation needed]
 EIU Innovation Ranking[93]
 Global Competitiveness Report
 Global Innovation Index (GII), by INSEAD[94]
 Information Technology and Innovation Foundation (ITIF) Index
 Innovation 360 – From the World Bank. Aggregates innovation indicators (and
more) from a number of different public sources
 Innovation Capacity Index (ICI) published by a large number of international
professors working in a collaborative fashion. The top scorers of ICI 2009–2010
were: 1. Sweden 82.2; 2. Finland 77.8; and 3. United States 77.5[95]
 Innovation Index, developed by the Indiana Business Research Center, to measure
innovation capacity at the county or regional level in the United States[96]
 Innovation Union Scoreboard, developed by the European Union
 innovationsindikator for Germany, developed by the Federation of German
Industries (Bundesverband der Deutschen Industrie) in 2005[97]
 INSEAD Innovation Efficacy Index[98]
 International Innovation Index, produced jointly by The Boston Consulting Group,
the National Association of Manufacturers (NAM) and its nonpartisan research
affiliate The Manufacturing Institute, is a worldwide index measuring the level of
innovation in a country; NAM describes it as the "largest and most comprehensive
global index of its kind"[citation needed][99]
 Management Innovation Index – Model for Managing Intangibility of Organizational
Creativity: Management Innovation Index[100]
 NYCEDC Innovation Index, by the New York City Economic Development
Corporation, tracks New York City's "transformation into a center for high-tech
innovation. It measures innovation in the City's growing science and technology
industries and is designed to capture the effect of innovation on the City's
economy"[101]
 OECD Oslo Manual is focused on North America, Europe, and other rich economies
 State Technology and Science Index, developed by the Milken Institute, is a U.S.-
wide benchmark to measure the science and technology capabilities that furnish
high paying jobs based around key components[102]
 World Competitiveness Scoreboard[103]