Measuring Innovation

For consumers, the evidence of innovation- whether it be a new, more advanced phone or a more efficient, fuel-saving car- can be fairly obvious.  But, as Gregory Ferenstein highlighted earlier this month, measuring that progress- as well as the multitude of other advances in technology developed and marketed by U.S. firms each year can be a difficult task.  Faced with a world where the simple awarding of patents no longer reflects trends in innovation and business practices, Director of the U.S. Patent and Trademark Office David Kappos recently called for the institution of a new way of measuring innovation.

The question of how to measure innovation in an increasingly changing global economic system is not new.  In 2008, building on the proposals of an Advisory Committee on Measuring Innovation in the 21st Century Economy, then-Secretary of Commerce Carlos Gutierrez instituted new ways of recording innovation within the federal government.  According to a press release, included among the changes was a greater focus on the connection between gains in productivity and advances in innovation.  Towards this end, Secretary Gutierrez announced that the Bureau of Economic Analysis would examine this connection through a “supplemental innovation account” based on factors such as patents, as well as advances in human capital.

At the time that the Department of Commerce released its findings, Stephen J. Dubner  also weighed in on the question, asking several industry experts how they would measure innovation.  Among the insights offered by these experts- who included authors of business publications, academics, and executives- were that because innovation is a process and different types of innovation proceed in different ways, it can be difficult to measure the phenomena.  Within individual firms, ExpoTV.com executives Daphne Kwon and Bill Hildebolt emphasized the close connection between past failure and innovation, and measuring innovation through so-called “failure metrics” including the rate of failure.

Posted by Rachel Barker

Sources: Fast Company, Freakonomics.com, U.S. Department of Commerce,

Photo Credit: David Kappos, Under Secretary of Commerce for Intellectual Property and Director of United States Patent and Trademark Office-Geneva Press Briefing courtesy of flickr user US Mission Geneva

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