Innovation indicatorsTo achieve this level of understanding requires that the policy maker have access to appropriate indicators of the state of the national innovative effort. A good deal of effort has been put into developing appropriate indicators in the OECD countries and a sample of the most important ones is given in Box 4.3. These are divided into three categories, in relation to inputs, intermediate outputs and final outputs. Input indicators cover R&D activity either in the form of expenditures, employment of qualified scientific and technical personnel or lists of projects and programmes. Their chief limitation is in knowing the quality of the inputs, which are necessarily very idiosyncratic in the case of the people involved, and the effective organisation of research teams. At best these issues can be assessed indirectly but should include measures of public and private inputs and measures of engagement with the wider world of science and technology, for example, through attendance at seminars and conferences.Intermediate indicators include patents and scientific and technological papers.It is well recognised that the quality of patents varies enormously and that different industries place very different weights on patent activity, nonetheless,they remain a tolerable measure of inventive activity. Publication-based measures can always be accompanied by citation analysis, due allowance being made for time-lags. Final output indicators are the least well developed, again because of quality problems. These can include lists of innovations, measures of diffusion of technology and measures of new business formation to commercialise innovations. When used with care, bench marking of firms against each other and foreign rivals can provide useful information on performance gaps.tolerable
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