How innovation has become everyone’s job

We just cannot understand the evolution of idea management metrics without first understanding the evolution of innovation in the corporate world. What was considered an ‘innovation’ in the 50s, in the 70s? And how did we gauge its results?

The white paper ‘Innovation Metrics: Measurement to Insight’ helps us map this dynamics, highlighting the more commonly used indicators for each decade:

measuring innovation

The authors, Egils Milbergs, president of the Center for Accelerating Innovation, and Nicholas Vonortas, director of the Center for International Science and Technology Policy at George Washington University, explain these categories:

  • ‘First generation metrics reflect a linear conception of innovation focusing on inputs such as R&D investment.’
  • ‘Second generation complements input indicators by accounting for the intermediate outputs of S&T activities.’
  • ‘Third generation metrics focus on a richer set of innovation indicators and indexes based on surveys and the integration of publicly available data.’

Each reflects, in this schema, the corporate spirit of its time.

Particularly during the 80s and 90s, many efforts were made to develop models to measure innovation. For statistical purposes, in 1992, the ‘Oslo Manual’ (from the OECD and Eurostat) first codified innovation as a set of tools and concepts restricted to technological product and process innovation in manufacturing.

In mid-90s, innovation had definitely been added to the corporate agenda as a specialty, gradually conquering more sectors and industries. And, by 2000, while information technology and the knowledge economy matured, a range of new metrics had become part of business management vocabulary, integrating the innovation sphere – from ‘knowledge’ and ‘learning’ to ‘intangibles’. Another word became central: ‘engagement’.

Then, a new generation of indicators was needed. Milbergs and Vonortas describe this fourth generation as ‘grounded in a knowledge-based networked economy’ (see the table below).

measuring innovation

In the twenty-first century, comparative advantages have become less relevant. Countries and companies thrive by developing competitive advantages, which rest on ‘making more productive use of inputs’. This ‘requires continual innovation’, Michael Porter, a Harvard Business School professor, says.

As management models have evolved into what can be called the ‘2.0 Age of Management’, CEOs, top management, business managers and all employees must be involved in this ‘continual innovation’ effort. New collaboration practices and powerful innovation management tools have helped supported this transformation, as innovation becomes everyone’s job.

measuring innovation

(to be continued)

FROM THE START:
How can you measure innovation management?

Pedro do Carmo Costa, Exago’s director and co-founder
pcc@exago.com

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