Innovation indicators: Towards a User's guide

The increased use of innovation indicators is observed in policy sphere. Several reasons are attributed for this increased use: first, access to data on innovation increased as the result of over half a century of efforts made by international organizations and researchers in this field; second, an increase in types and number of innovation indicators; third, its increased use in business contexts with the understanding that innovation is an integral part of business performance, which further spurred the use and development of innovation indicators (Soete and Freeman, 2009); fourth, the expansion in geographical coverage of countries, particularly in emerging countries of Latin America, Asia and Africa (Gault, 2010) making innovation indicators more policy (politics) relevant in a wider variety of countries, e.g. by allowing to benchmark and compare countries' innovation performance; and fifth, the innovation indicators (in particular, the composite indicator but any indicator if used in ranking countries) became a communicative tool in public debate, in the backdrop of recent emphasis on 'evidence based policy' and 'participatory decision making' in the policy domain (OECD, 2012). Considering innovation indicators are intended to improve the performance of innovation policy, their increasing use is generally good news. Nevertheless, due to the increase in diversity in type and context in which indicators are being applied there is an increased occurrence of inappropriate use and misinterpretation of innovation indicators in the policy sphere. This paper first describes the specific cases then tries to generalize the problem aiming to build a general guideline or check list on the appropriate use of innovation indicators.