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{{other uses}}Innovation in its modern meaning is "a new idea, creative thoughts, new imaginations in form of device or method".WEB,weblink Innovation, Merriam-Webster,, 2016-03-14, Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.JOURNAL, Maranville, S., Entrepreneurship in the Business Curriculum, Journal of Education for Business, 68, 27–31, 10.1080/08832323.1992.10117582, 1992, Such innovation takes place through the provision of more-effective products, processes, services, technologies, or business models that are made available to markets, governments and society. An innovation is something original and more effective and, as a consequence, new, that "breaks into" the market or society.JOURNAL, 10.1016/j.hitech.2009.02.002, Questioning two myths in innovation literature, The Journal of High Technology Management Research, 20, 40–51, 2009, Frankelius, Per, Innovation is related to, but not the same as, invention,WEB,weblink This Is The Difference Between 'Invention' And 'Innovation', Kim, Bhasin, 2012-04-02, Business Insider, as innovation is more apt to involve the practical implementation of an invention (ie new / improved ability) to make a meaningful impact in the market or society,MAGAZINE,weblink What's the Difference Between Invention and Innovation?, Forbes, 2015-09-10, and not all innovations require an invention. Innovation often{{quantify|date=April 2018}} manifests itself via the engineering process, when the problem being solved is of a technical or scientific nature. The opposite of innovation is exnovation.While a novel device is often described{{by whom?|date=April 2018}} as an innovation, in economics, management science, and other fields of practice and analysis, innovation is generally considered to be the result of a process that brings together various novel ideas in such a way that they affect society. In industrial economics, innovations are created and found{{by whom?|date=April 2018}} empirically from services to meet growing consumer demand.Growth in Services. Meeting of the OECD Council at Ministerial Level, 2005. Organisation for Economic Co-operation and DevelopmentBOOK, 10.1787/9789264079663-en, Consumer Policy Toolkit, 2010, 9789264079656, Organisation for Economic Co-operation and Development, WEB
, EPSC - European Commission,
Innovation also has an older historical meaning which is quite different. From the 1400s through the 1600s, prior to early American settlement, the concept of "innovation" was pejorative. It was an early modern synonym for rebellion, revolt and heresy.JOURNAL, Mazzaferro, Alexander, "Such a Murmur": Innovation, Rebellion, and Sovereignty in William Strachey's "True Reportory", Early American Literature, 2018, 53, 1, 3–32, 10.1353/eal.2018.0001, BOOK, Mazzaferro, Alexander McLean, "No newe enterprize" (Doctoral dissertation), 2017, Rutgers University, Camden, New Jersey,weblink 19 February 2019, NEWS, Lepore, Jill, The Disruption Machine What the gospel of innovation gets wrong,weblink 19 February 2019, The New Yorker, June 23, 2014, NEWS, Green, Emma, Innovation: The History of a Buzzword,weblink 19 February 2019, The Atlantic, June 20, 2013,


A 2014 survey of literature on innovation found over 40 definitions. In an industrial survey of how the software industry defined innovation, the following definition given by Crossan and Apaydin was considered to be the most complete, which builds on the Organisation for Economic Co-operation and Development (OECD) manual's definition:Edison, H., Ali, N.B., & Torkar, R. (2014). Towards innovation measurement in the software industry. Journal of Systems and Software 86(5), 1390–407. According to Kanter, innovation includes original invention and creative use and defines innovation as a generation, admission and realization of new ideas, products, services and processes.BOOK, Innovation in American Government: Challenges, Opportunities, and Dilemmas, Brookings Inst Pr, 9780815703587, 1997-06-01, Two main dimensions of innovation were degree of novelty (patent) (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 processor product-service system innovation). In recent organizational scholarship, researchers of workplaces have also distinguished innovation to be separate from creativity, by providing an updated definition of these two related but distinct constructs:}}

Inter-disciplinary views

Business and economics

In business and in economics, innovation can become a catalyst for growth. With rapid advancements in transportation and communications over the past few decades, the old-world concepts of factor endowments and comparative advantage which focused on an area's unique inputs are outmoded for today's global economy. Economist Joseph Schumpeter (1883–1950), who contributed greatly to the study of innovation economics, 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 market distribution, such as the connection from the craft shop to factory. He famously asserted that "creative destruction is the essential fact about capitalism".BOOK, Schumpeter, J. A., Joseph Schumpeter, 1943, Capitalism, Socialism, and Democracy, Routledge, 6, 81–84, 978-0-415-10762-4, Entrepreneurs continuously look for better ways to satisfy their consumer base with improved quality, durability, service and price which come to fruition in innovation with advanced technologies and organizational strategies.Heyne, P., Boettke, P. J., and Prychitko, D. L. (2010). The Economic Way of Thinking. Prentice Hall, 12th ed. pp. 163, 317–18.A prime example of innovation involved the explosive boom of Silicon Valley startups out of the Stanford Industrial Park. In 1957, dissatisfied employees of Shockley Semiconductor, the company of Nobel laureate and co-inventor of the transistor William Shockley, left to form an independent firm, Fairchild Semiconductor. After several years, Fairchild developed into a formidable presence in the sector. Eventually, these founders left to start their own companies based on their own, unique, latest ideas, and then leading employees started their own firms. Over the next 20 years, this snowball process launched the momentous startup-company explosion of information-technology firms. Essentially, Silicon Valley began as 65 new enterprises born out of Shockley's eight former employees.WEB,weblink Silicon Valley History & Future,, 2016-03-14, Since then, hubs of innovation have sprung up globally with similar metonyms, including Silicon Alley encompassing New York City.Another example involves business incubators – a phenomenon nurtured by governments around the world, close to knowledge clusters (mostly research-based) like universities or other Government Excellence Centres – which aim primarily to channel generated knowledge to applied innovation outcomes in order to stimulate regional or national economic growth."MEMBERWIDE">FIRST= TZAMERET H.FIRST2= TOR HELGEFIRST3= ANDREW, 2015-07-01, Knowledge flow in Technological Business Incubators: Evidence from Australia and Israelvolume= 41–42, 11–24, 10.1016/j.technovation.2015.03.002,


In the organizational context, innovation may be linked to positive changes in efficiency, productivity, quality, competitiveness, and market share. However, recent research findings highlight the complementary role of organizational culture in enabling organizations to translate innovative activity into tangible performance improvements.JOURNAL, 10.1111/j.1540-6210.2012.02529.x, Benefiting from Public Sector Innovation: The Moderating Role of Customer and Learning Orientation, Public Administration Review, 72, 4, 550–559, 2012, Salge, Torsten Oliver, Vera, Antonio, Organizations can also improve profits and performance by providing work groups opportunities and resources to innovate, in addition to employee's core job tasks.JOURNAL, 10.1111/1464-0597.00951, Sparkling Fountains or Stagnant Ponds: An Integrative Model of Creativity and Innovation Implementation in Work Groups, Applied Psychology, 51, 3, 355–387, 2002, West, Michael A., Peter Drucker wrote:}}According to Clayton Christensen, disruptive innovation is the key to future success in business.JOURNAL, Christensen, Clayton & Overdorf, Michael, 2000, Meeting the Challenge of Disruptive Change,weblink Harvard Business Review, The organization requires a proper structure in order to retain competitive advantage. It is necessary to create and nurture an environment of innovation. Executives and managers need to break away from traditional ways of thinking and use change to their advantage. It is a time of risk but even greater opportunity.MIT Sloan Management Review Spring 2002. "How to identify and build New Businesses" The world of work is changing with the increase in the use of technology and both companies and businesses 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.Anthony, Scott D.; Johnson, Mark W.; Sinfield, Joseph V.; Altman, Elizabeth J. (2008). Innovator's Guide to Growth. "Putting Disruptive Innovation to Work". Harvard Business School Press. {{ISBN|978-1-59139-846-2}}.While disruptive innovation will typically "attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly," foundational innovation is slower, and typically has the potential to create new foundations for global technology systems over the longer term. Foundational innovation 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.NEWS, Iansiti, Marco, Lakhani, Karim R.,weblink The Truth About Blockchain, Harvard Business Review, Harvard University, January 2017, 2017-01-17, a foundational technology: It has the potential to create new foundations for our economic and social systems., 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.All organizations can innovate, including for example hospitals, universities, and local governments.JOURNAL, 19104264, 2009, Salge, T. O., Hospital innovativeness and organizational performance: Evidence from English public acute care, Health Care Management Review, 34, 1, 54–67, Vera, A., 10.1097/01.HMR.0000342978.84307.80, 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 aids 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.Perez, T. and Rushing R. (2007). "The CitiStat Model: How Data-Driven Government Can Increase Efficiency and Effectiveness". Center for American Progress Report. pp. 1–18. 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.Transportation Research Board (2007). "Transit Cooperative Research Program (TCRP) Synthesis 70: Mobile Data Terminals". pp. 1–5. TCRP (PDF).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.


There are several sources of innovation. It can occur as a result of a focus effort by 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 different changes in industry structure, in market structure, in local and global demographics, in human perception, mood and meaning, in the amount of already available scientific knowledge, etc.(File:Technological Change.jpg|thumb|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 an agent (person or business) innovates in order to sell the innovation. Specifically, R&D measurement is the commonly used input for innovation, in particular in the business sector, named Business Expenditure on R&D (BERD) that grew over the years on the expenses of the declining R&D invested by the public sector.JOURNAL, H. Rubin, Tzameret, 2015, The Achilles heel of a strong private knowledge sector: evidence from Israel,weblink The Journal of Innovation Impact, 7, 1, 80–99, Another source of innovation, only now becoming widely recognized, is end-user innovation. This is where an agent (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 has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, "The Sources of Innovation".BOOK,weblink The Sources of Innovation, Von Hippel, Eric, Eric von Hippel, Oxford University Press, 1988, dead,weblink" title="">weblink 12 October 2006, 3 December 2015, 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 supportEngelberger, J. F. (1982). "Robotics in practice: Future capabilities". Electronic Servicing & Technology magazine.
However, innovation processes usually involve: identifying customer needs, macro and meso trends, developing competences, and finding financial support.The Kline chain-linked model of innovationKline (1985). Research, Invention, Innovation and Production: Models and Reality, Report INN-1, March 1985, Mechanical Engineering Department, Stanford University. 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.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.Mark, M., Katz, B., Rahman, S., and Warren, D. (2008) MetroPolicy: Shaping A New Federal Partnership for a Metropolitan Nation. Brookings Institution: Metropolitan Policy Program Report. pp. 4–103. 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.JOURNAL,weblink Perspectives on Innovation and Technology Transfer, Procedia - Social and Behavioral Sciences, 213, 965–970, Dubickis, M., Gaile-Sarkane, E., 2015, 10.1016/j.sbspro.2015.11.512, 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.WEB,weblink Forbes India Magazine, New Trends in Innovation Management,, 2016-03-14, For example, the software tool company Atlassian conducts quarterly "ShipIt Days" in which employees may work on anything related to the company's products.WEB,weblink ShipIt Days, Atlassian, 2016-03-14, 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 centred 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.WEB,weblink U-STIR,, 7 September 2011, dead,weblink" title="">weblink 18 September 2011, dmy-all, 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.Tuomi, I. (2002). Networks of Innovation. Oxford University Press. Networks of Innovation {{webarchive|url= |date=5 November 2007 }}Siltala, R. (2010). Innovativity and cooperative learning in business life and teaching. PhD thesis. University of Turku.One technique for innovating a solution to an identified problem is to actually attempt an experiment with many possible solutions.Forget The 10,000-Hour Rule; Edison, Bezos, & Zuckerberg Follow The 10,000-Experiment Rule. (2017-10-26). Retrieved on 2018-10-16. 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, reduce side effects, and reduce 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, Facebook, Google, and Netflix.Why These Tech Companies Keep Running Thousands Of Failed Experiments. (2016-09-21). Retrieved on 2018-10-16. 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.Simulation Advantage. (2010-08-04). Retrieved on 2018-10-16. Capital One uses this technique to drive credit card marketing offers.

Goals and failures

Programs of organizational innovation are typically tightly linked to organizational goals and objectives, to the business plan, and to market competitive positioning. One driver for innovation programs in corporations is to achieve growth objectives. As Davila et al. (2006) notes, "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".Davila, T., Epstein, M. J., and Shelton, R. (2006). "Making Innovation Work: How to Manage It, Measure It, and Profit from It." Upper Saddle River: Wharton School Publishing.One survey across a large number of manufacturing and services organizations found, ranked in decreasing order of popularity, 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, reduced environmental damage, replacement of products/services, reduced energy consumption, conformance to regulations.These goals vary between improvements to products, processes and services and dispel a popular myth that innovation deals mainly with new product development. Most of the goals could apply to any organization be it a manufacturing facility, marketing company, hospital or government. Whether innovation goals are successfully achieved or otherwise depends greatly on the environment prevailing in the organization.JOURNAL, 10.1287/mnsc.35.5.597, Innovative and Noninnovative Small Firms: Types and Characteristics, Management Science, 35, 5, 597–606, 1989, Khan, Arshad M., Manopichetwattana, V., Conversely, failure can develop in programs of innovations. The causes of failure have been widely researched and can vary considerably. Some causes will be external to the organization and outside its influence of control. Others will be 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. Common 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, poor communication and access to information.JOURNAL, O'Sullivan, David, 2002, Framework for Managing Development in the Networked Organisations, Journal of Computers in Industry, 47, 1, 77–88, 10.1016/S0166-3615(01)00135-X,


(File:InnovationLifeCycle.jpg|thumb|right)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:Tarde, G. (1903). The laws of imitation (E. Clews Parsons, Trans.). New York: H. Holt & Co.
  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 returnThe s-curve derives from an assumption that new products are likely to have "product life" – ie, 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.Rogers, E. M. (1962). Diffusion of Innovation. New York, NY: Free Press.


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.BOOK, The Oxford handbook of innovation, 2005, Oxford University Press, Fagerberg, Jan., Mowery, David C., Nelson, Richard R., 9780199264551, Oxford, 56655392, Nevertheless, Edison et al.JOURNAL, Edison, H., Ali, N.B., Torkar, R., 10.1016/j.jss.2013.01.013,weblink Towards innovation measurement in the software industry, Journal of Systems and Software, 86, 5, 1390–1407, 2013, in their review of literature on innovation management found 232 innovation metrics. They categorized these measures along five dimensions; ie 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.There are two different types of measures for innovation: the organizational level and the political level.

Organizational level

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.Davila, Tony; Marc J. Epstein and Robert Shelton (2006). Making Innovation Work: How to Manage It, Measure It, and Profit from It. Upper Saddle River: Wharton School Publishing

Political level

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.OECD The Measurement of Scientific and Technological Activities. Proposed Guidelines for Collecting and Interpreting Technological Innovation Data. Oslo Manual. 2nd edition, DSTI, OECD / European Commission Eurostat, Paris 31 December 1995.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.WEB,weblink Industrial innovation – Enterprise and Industry,, 7 September 2011, dead,weblink" title="">weblink 27 August 2011, dmy-all,


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.{{citation needed|date=March 2017}}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.JOURNAL, 19523121, 2881450, 2009, Chalkidou, K., Comparative effectiveness research and evidence-based health policy: Experience from four countries, The Milbank Quarterly, 87, 2, 339–67, Tunis, S., Lopert, R., Rochaix, L., Sawicki, P. T., Nasser, M., Xerri, B., 10.1111/j.1468-0009.2009.00560.x, Some academics claim cost-effectiveness research is a valuable value-based measure of innovation which accords "truly significant" therapeutic advances (ie providing "health gain") higher prices than free market mechanisms.JOURNAL, Roughead, E., Lopert, R., Sansom, L., Prices for innovative pharmaceutical products that provide health gain: a comparison between Australia and the United States Value, Health (journal), Health, 2007, 10, 6, 514–20, 10.1111/j.1524-4733.2007.00206.x, 17970935, 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.JOURNAL, Hughes, B., Payers Growing Influence on R&D Decision Making, Nature Reviews Drug Discovery, 2008, 7, 11, 876–78, 10.1038/nrd2749, 18974741, 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.JOURNAL, Faunce, T., Bai, J., Nguyen, D., Impact of the Australia-US Free Trade Agreement on Australian medicines regulation and prices, Journal of Generic Medicines, 2010, 7, 1, 18–29, 10.1057/jgm.2009.40, WEB, Faunce TA, Global intellectual property protection of 'innovative' pharmaceuticals: Challenges for bioethics and health law in B Bennett and G Tomossy, Globalization and Health Springer, 2006,weblink, 18 June 2009, dead,weblink" title="">weblink 14 April 2011, dmy-all, JOURNAL, Faunce, T. A., Reference pricing for pharmaceuticals: is the Australia-United States Free Trade Agreement affecting Australia's Pharmaceutical Benefits Scheme?, Medical Journal of Australia, 2007, 187, 4, 240–42, 17564579,


Several indices attempt to measure innovation and rank entities based on these measures, such as:
  • Bloomberg Innovation Index
  • "Bogota Manual"WEB,weblink Bogota Manual. Standardisation of Indicators of Technological Innovation in Latin American and Caribbean Countries, Hernán Jaramillo, Gustavo Lugones, Mónica Salazar, March 2001, Iberoamerican Network of Science and Technology Indicators (RICYT) Organisation of American States (OAS) / CYTED PROGRAM COLCIENCIAS/OCYT, 87, English, similar to the Oslo Manual, is focused on Latin America and the Caribbean countries.{{citation needed|date=February 2016}}
  • "Creative Class" developed by Richard Florida{{citation needed|date=February 2016}}
  • EIU Innovation Ranking
  • Global Competitiveness Report
  • Global Innovation Index (GII), by INSEADWEB, INSEAD,weblink The INSEAD Global Innovation Index (GII), 2013-10-28,
  • 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 77.5WEB, Innovation Capacity Index, Home page,weblink
  • Innovation Index, developed by the Indiana Business Research Center, to measure innovation capacity at the county or regional level in the United StatesWEB,weblink Tools,, 7 September 2011,
  • Innovation Union Scoreboard
  • innovationsindikator for Germany, developed by the (:de:Bundesverband der Deutschen Industrie|Federation of German Industries) (Bundesverband der Deutschen Industrie) in 2005Innovations Indikator retrieved 7 March 2017
  • INSEAD Innovation Efficacy IndexNEWS,weblink Technology Review, The INSEAD Innovation Efficiency Inndex, February 2016,
  • 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|date=February 2016}}
  • Management Innovation Index – Model for Managing Intangibility of Organizational Creativity: Management Innovation IndexBOOK, Model for Managing Intangibility of Organizational Creativity: Management Innovation Index, Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship, 1300–1307, Kerle, Ralph, 10.1007/978-1-4614-3858-8_35, 2013, 978-1-4614-3857-1,
  • 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"WEB,,weblink Innovation Index,
  • 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 componentsWEB,weblink, Home page,
  • World Competitiveness ScoreboardWEB,weblink, 2014, The World Competitiveness Scoreboard 2014,


Many research studies try to rank countries based on measures of innovation. Common areas of focus include: high-tech companies, manufacturing, patents, post secondary education, research and development, and research personnel. The left ranking of the top 10 countries below is based on the 2016 Bloomberg Innovation Index.NEWS,weblink These Are the World's Most Innovative Economies,, 2016-11-25, However, studies may vary widely; for example the Global Innovation Index 2016 ranks Switzerland as number one wherein countries like South Korea and Japan do not even make the top ten.WEB,weblink Infografik: Schweiz bleibt globaler Innovationsführer, Statista Infografiken, Statista (In German), 2016-11-25, {{Columns-start|width=50%}} {| class="wikitable" style="width: 15%;"|+Bloomberg Innovation Index 2019Data Findings Bloomberg Innovation Index" published by datawrapper, reviewd 10. September 2019! Rank !! Country/Territory!Index {{flagcountry|South Korea}}|87.38 {{flagcountry|Germany}}|87.3 {{flagcountry|Finland}}|85.57 {{flagcountry|Switzerland}}|85.49 {{flagcountry|Israel}}|84.78 {{flagcountry|Singapore}}|84.49 {{flagcountry|Sweden}}|84.15 {{flagcountry|U.S.}}|83.21 {{flagcountry|Japan}}|81.40 {{flagcountry|France}}|81.67 {{Column}} {| class="wikitable" style="width: 15%;"|+Global Innovation Index 2019Innovation Index Report 2019" Published by GII, reviewd 10. September 2019! Rank !! Country/Territory!Index {{flagcountry|Switzerland}}|67.24 {{flagcountry|Sweden}}|63.65 {{flagcountry|United States of America}}|61.73 {{flagcountry|Netherlands}}|61.44 {{flagcountry|United Kingdom}}|61.30 {{flagcountry|Finland}}|59.83 {{flagcountry|Denmark}}|58.44 {{flagcountry|Singapore}}|58.37{{flagcountry|Germany}}|58.19 {{flagcountry|Israel}}|57.43{{Column}} {| class="wikitable" style="width: 15%;"|+Innovation Indicator 2018Indicator 2018,PDF 2,7 MB" Published by the BDI and ZEW, reviewd 10. September 2019! Rank !! Country/Territory!Index {{flagcountry|Singapore}}|73 {{flagcountry|Switzerland}}|72 {{flagcountry|Belgium}}|59 {{flagcountry|Germany}}|55 {{flagcountry|Sweden}}|54 {{flagcountry|U.S.}}|52 {{flagcountry|United Kingdom}}|52 {{flagcountry|Denmark}}|51 {{flagcountry|Ireland}}|51 {{flagcountry|South Korea}}|51{{Columns-end}}


In 2005 Jonathan Huebner, a physicist working at the Pentagon's Naval Air Warfare Center, argued on the basis of both U.S. patents and world technological breakthroughs, per capita, that the rate of human technological innovation peaked in 1873 and has been slowing ever since.JOURNAL, Huebner, J., A possible declining trend for worldwide innovation, 10.1016/j.techfore.2005.01.003, Technological Forecasting and Social Change, 72, 8, 980–986, 2005,weblink NEWS,weblink Science: Wanna be an inventor? Don't bother, Hayden, Thomas, 7 July 2005, U.S. News & World Report, 10 June 2013, In his article, he asked "Will the level of technology reach a maximum and then decline as in the Dark Ages?" In later comments to New Scientist magazine, Huebner clarified that while he believed that we will reach a rate of innovation in 2024 equivalent to that of the Dark Ages, he was not predicting the reoccurrence of the Dark Ages themselves.NEWS, Adler, Robert, Entering a dark age of innovation,weblink 30 May 2013, New Scientist, 2 July 2005, John Smart criticized the claim and asserted that technological singularity researcher Ray Kurzweil and others showed a "clear trend of acceleration, not deceleration" when it came to innovations.JOURNAL, Smart, J., Discussion of Huebner article, 10.1016/j.techfore.2005.07.001, Technological Forecasting and Social Change, 72, 8, 988–995, 2005, The foundation replied to Huebner the journal his article was published in, citing Second Life and eHarmony as proof of accelerating innovation; to which Huebner replied.JOURNAL, Huebner, Jonathan, Response by the Authors, Technological Forecasting and Social Change, 72, 8, 995–1000, 10.1016/j.techfore.2005.05.008, 2005, However, Huebner's findings were confirmed in 2010 with U.S. Patent Office data.JOURNAL, Strumsky, D., Lobo, J., Tainter, J. A., 10.1002/sres.1057, Complexity and the productivity of innovation, Systems Research and Behavioral Science, 27, 5, 496, 2010, and in a 2012 paper.JOURNAL, Gordon, Robert J., Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds, NBER Working Paper No. 18315, 2012, 10.3386/w18315,

Innovation and development

The theme of innovation as a tool to disrupting patterns of poverty has gained momentum since the mid-2000s among major international development actors such as DFID,WEB,weblink Jonathan Wong, Head of DFID's Innovation Hub | DFID bloggers,, 2014-09-24, 2016-03-14, Gates Foundation's use of the Grand Challenge funding model,WEB,weblink Bill & Melinda Gates Foundation and Grand Challenge Partners Commit to Innovation with New Investments in Breakthrough Science – Bill & Melinda Gates Foundation,, 2014-10-07, 2016-03-14, and USAID's Global Development Lab.WEB,weblink Global Development Lab | U.S. Agency for International Development,, 2015-08-05, 2016-03-14, Networks have been established to support innovation in development, such as D-Lab at MIT.WEB,weblink International Development Innovation Network (IDIN) | D-Lab,, 2016-03-14, Investment funds have been established to identify and catalyze innovations in developing countries, such as DFID's Global Innovation Fund,WEB,weblink Global Innovation Fund International development funding, GOV.UK, 2016-03-14, Human Development Innovation Fund,WEB,weblink Human Development Innovation Fund (HDIF),, 2015-08-14, 2016-03-14, and (in partnership with USAID) the Global Development Innovation Ventures.WEB,weblink USAID and DFID Announce Global Development Innovation Ventures to Invest in Breakthrough Solutions to World Poverty | U.S. Agency for International Development,, 2013-06-06, 2016-03-14,

Government policies

Given the noticeable effects on efficiency, quality of life, and productive growth, innovation is a key factor in society and economy. Consequently, policymakers have long worked to develop environments that will foster innovation and its resulting positive benefits, from funding Research and Development to supporting regulatory change, funding the development of innovation clusters, and using public purchasing and standardisation to 'pull' innovation through.For instance, experts are advocating that the U.S. federal government launch a National Infrastructure Foundation, a nimble, collaborative strategic intervention organization that will house innovations programs from fragmented silos under one entity, inform federal officials on innovation performance metrics, strengthen industry-university partnerships, and support innovation economic development initiatives, especially to strengthen regional clusters. Because clusters are the geographic incubators of innovative products and processes, a cluster development grant program would also be targeted for implementation. By focusing on innovating in such areas as precision manufacturing, information technology, and clean energy, other areas of national concern would be tackled including government debt, carbon footprint, and oil dependence. The U.S. Economic Development Administration understand this reality in their continued Regional Innovation Clusters initiative.WEB,weblink U.S. Economic Development Administration : Fiscal Year 2010 Annual Report,, 2016-03-14, In addition, federal grants in R&D, a crucial driver of innovation and productive growth, should be expanded to levels similar to Japan, Finland, South Korea, and Switzerland in order to stay globally competitive. Also, such grants should be better procured to metropolitan areas, the essential engines of the American economy.Many countries recognize the importance of research and development as well as innovation including Japan's Ministry of Education, Culture, Sports, Science and Technology (MEXT);WEB,weblink Science and Technology, MEXT, 7 September 2011, dead,weblink" title="">weblink 5 September 2011, dmy-all, Germany's Federal Ministry of Education and Research;WEB,weblink BMBF " Ministry,, 7 September 2011, and the Ministry of Science and Technology in the People's Republic of China. Furthermore, Russia's innovation programme is the Medvedev modernisation programme which aims at creating a diversified economy based on high technology and innovation. Also, the Government of Western Australia has established a number of innovation incentives for government departments. Landgate was the first Western Australian government agency to establish its Innovation Program.WEB,weblink Home, Landgate Innovation Program,, 2016-03-14, Regions have taken a more proactive role in supporting innovation. Many regional governments are setting up regional innovation agency to strengthen regional innovation capabilities.Morisson, A. & Doussineau, M. (2019). Regional innovation governance and place-based policies: design, implementation and implications. Regional Studies, Regional Science,6(1),101–116.weblink In Medellin, Colombia, the municipality of Medellin created in 2009 Ruta N to transform the city into a knowledge city.JOURNAL, 10.1080/23792949.2018.1538702, Knowledge Gatekeepers and Path Development on the Knowledge Periphery: The Case of Ruta N in Medellin, Colombia, Area Development and Policy, 4, 98–115, 2018, Morisson, Arnault,

See also

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