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Introduction to the Oslo Manual:main definitions (Part I)
ECO - UIS Regional Workshop onScience, Technology and Innovation (STI) Indicators
Tehran, Iran8-10 December 2013
Luciana Marins, UIS
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Measuring Innovation
Oslo Manual: Guidelines for collecting
and interpreting innovation data
UIS - Annex (OM, 2005): Innovation Surveys in Developing Countries
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Why measure innovation?
Innovation and economic development;
Innovation is more than R&D;
Innovation policy should be evidence-based;
Innovation data…
• Understanding of innovation and its relation to economic growth;
• Indicators for benchmarking national performance.
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What is innovation?
Innovation is the implementation of:
• New or significantly improved product or process;
• New marketing or organisational method.
Implementation: A new or improved product is implemented when it is
introduced on the market;
New processes, marketing methods or organisational methods are implemented when they are brought into actual use in the firm’s operations.
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The innovation measurement framework
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Types of innovation - Product (1)
Product Innovation:
• Introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses;
• New products: different characteristics or intended uses from previous products;
• Significantly improvements: changes in materials, components, and other characteristics that enhance performance.
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Types of innovation - Product (2)
Product Innovation - examples:• New products:
» The first microprocessors;» The first digital cameras;» The first portable MP3 player;
• Significantly improvements: » Introduction of ABS braking, GPS navigational systems, or
other subsystem improvements in cars;» The use of breathable fabrics in clothing;» Improvements in internet banking services, such as greatly
improved speed and ease of use.
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Types of innovation - Process (1)
Process Innovation:
• Implementation of a new or significantly improved production or delivery method (changes in techniques, equipment and/or software);
• Intended to: decrease unit costs of production or delivery, increase quality, or produce or deliver new or significantly improved products.
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Types of innovation - Process (2)
Process Innovation - examples:
» Introduction of a bar-coded goods-tracking system;
» Introduction of GPS tracking devices for transport services;
» Implementation of computer-assisted design for product development;
» Implementation of a new reservation system in a travel agency.
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Types of innovation - Marketing (1)
Marketing Innovation:
• Implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing;
• Better addressing customer needs, opening up new markets, or newly positioning a firm’s product on the market increasing firm’s sales;
• Marketing method NOT previously used - part of a new marketing concept or strategy;
• For both new and existing products.
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Types of innovation - Marketing (2)
Marketing Innovation:
• Product design or packaging: changes in form and appearance that do not alter products’ functional or user characteristics + changes in the packaging;
• Product placement: new sales channels;
• Product promotion: new concepts for promoting firms’ goods and services;
• Pricing: new pricing strategies to market the firms’ goods or services.
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Types of innovation - Marketing (3)
Marketing Innovation - examples:
» Development and introduction of a fundamentally new brand symbol;
» First use of a significantly different media - product placement in a television programme;
» Introduction for the first time of a franchising system.
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Types of innovation - Organisational (1)
Organisational Innovation:
• Implementation of a new organisational method in the firm’s business practices, workplace organisation or external relations;
• Increase firm’s performance by reducing administrative/transaction costs, improving workplace satisfaction, accessing non-tradable assets, or reducing costs of supplies;
• Organisational method NOT used before - result of strategic decisions taken by management.
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Organisational Innovation:
• Business practices: implementation of new methods for organising routines and procedures for the conduct of work;
• Workplace organisation: new methods for distributing responsibilities and decision making among employees for the division of work within and between firm activities + new concepts for the structuring of activities;
• External relations: new ways of organising relations with other firms or public institutions.
Types of innovation - Organisational (2)
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Organisational Innovation - examples:
» First implementation of a database of best practices;
» Establishment of new types of collaborations with research organisations;
» First implementation of an organisational model that gives the firm’s employees greater autonomy in decision making and encourages them to contribute their ideas.
Types of innovation - Organisational (3)
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Diffusion and degree of novelty
Degree of novelty: • Firm;• Market;• World.
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Example - product innovation/degree of novelty
(Product innovations) Yes No
New or significantly improved goods? ( ) ( )
New or significantly improved services? ( ) ( )
(Degree of novelty) Yes No
New to your market? ( ) ( )
Only new to your firm? ( ) ( )
During the three years 200X to 200Y, did yourenterprise introduce:
Were any of your product innovations during the threeyears 200X to 200Y:
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Example - organisational innovation
(Organisational innovations) Yes NoNew business practices for organisingprocedures
( ) ( )
New methods of organising workresponsibilities and decision making
( ) ( )
New methods of organising external relationswith other firms or public institutions
( ) ( )
During the three years 200X to 200Y, did your enterpriseintroduce:
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Types of innovation - example
Innovation in a restaurant: • Product innovation: delivery (new service);• Process innovation: new type of oven (new equipment
used in the production process);• Organisational innovation: new delivery unit (new
organisational unit/model);• Marketing innovation: billposting (new media for
promoting the delivery service).
Note. Source: Adapted from Heinlo, A. (2011). Measuring R&D&I in Estonia. Almaty, Kazakhstan S&T Indicators Workshop. (PowerPoint Presentation)
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Exercise…
Exercise 1:
Types of Innovation
