Innovation output indicators: relevance for policies, the EU 2020 indicator and an alternative proposal

ABSTRACT

This article introduces a new family of innovation output indicators as an alternative to the EU 2020 indicator. The latter is a composite indicator that bears a complex and weak relation to the actual innovation output of economies. The proposed family of indicators (DINNOV) estimates the participation in the economy of enterprises that are both dynamic (or high-growth) and innovative. Its indicators take advantage of both the tradition of indicators produced from enterprise data collected by surveys of innovation and of indicators of business demography and entrepreneurship. Values of DINNOV indicators for Brazil are computed as a proof of concept. A proxy of the DINNOV indicators – the DINNOV-Simplex – is estimated for Brazil and 17 European economies. The new indicators avoid several drawbacks of the EU 2020 innovation output indicator and are easier to communicate to policymakers and the general public.

KEYWORDS:
Innovation output; Innovation indicator; DINNOV; Surveys of innovation; Innovation policy; High-growth enterprises; Brazil; European Union