Introduction to the Oslo Manual: main definitions (Part I)

Introduction to the Oslo Manual:
main definitions (Part I)
ECO - UIS Regional Workshop on
Science, Technology and Innovation (STI) Indicators
Tehran, Iran
8-10 December 2013
Luciana Marins, UIS
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Measuring Innovation
Oslo Manual:
Guidelines for collecting
and interpreting
innovation data
UIS - Annex (OM, 2005):
Innovation Surveys in
Developing Countries
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Why measure innovation?
 Innovation and economic development;
 Innovation is more than R&D;
 Innovation policy should be evidence-based;
 Innovation data…
• Understanding
of innovation and its relation to
economic growth;
• Indicators for benchmarking national performance.
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What is innovation?
 Innovation is the implementation of:
• New or significantly improved product or process;
• New marketing or organisational method.
Implementation:

A new or improved product is implemented when it is
introduced on the market;

New processes, marketing methods or organisational
methods are implemented when they are brought into
actual use in the firm’s operations.
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The innovation measurement
framework
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Types of innovation - Product (1)
 Product Innovation:
• Introduction of a good or service that is new or
significantly
improved
with
characteristics or intended uses;
respect
to
its
• New products: different characteristics or intended
uses from previous products;
• Significantly
improvements: changes in materials,
components, and other characteristics that enhance
performance.
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Types of innovation - Product (2)
 Product Innovation - examples:
• New products:
» The first microprocessors;
» The first digital cameras;
» The first portable MP3 player;
• Significantly improvements:
» Introduction of ABS braking, GPS navigational systems, or
other subsystem improvements in cars;
» The use of breathable fabrics in clothing;
» Improvements in internet banking services, such as greatly
improved speed and ease of use.
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Types of innovation - Process (1)
 Process Innovation:
• Implementation of a new or significantly improved
production or delivery method (changes in techniques,
equipment and/or software);
• Intended to: decrease unit costs of production or
delivery, increase quality, or produce or deliver new or
significantly improved products.
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Types of innovation - Process (2)
 Process Innovation - examples:
» Introduction of a bar-coded goods-tracking system;
» Introduction of GPS tracking devices for transport services;
» Implementation of computer-assisted design for product
development;
» Implementation of a new reservation system in a travel
agency.
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Types of innovation - Marketing (1)
 Marketing Innovation:
• Implementation of a new marketing method involving
significant changes in product design or packaging,
product placement, product promotion or pricing;
• Better addressing customer needs, opening up new
markets, or newly positioning a firm’s product on the
market  increasing firm’s sales;
• Marketing method NOT previously used - part of a
new marketing concept or strategy;
• For both new and existing products.
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Types of innovation - Marketing (2)
 Marketing Innovation:
• Product design or packaging: changes in form and
appearance that do not alter products’ functional or
user characteristics + changes in the packaging;
• Product placement: new sales channels;
• Product promotion: new concepts for promoting firms’
goods and services;
• Pricing: new pricing strategies to market the firms’
goods or services.
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Types of innovation - Marketing (3)
 Marketing Innovation - examples:
» Development and introduction of a fundamentally new brand
symbol;
» First use of a significantly different media - product placement
in a television programme;
» Introduction for the first time of a franchising system.
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Types of innovation - Organisational (1)
 Organisational Innovation:
• Implementation of a new organisational method in the
firm’s business practices, workplace organisation or
external relations;
firm’s
performance
by
reducing
administrative/transaction costs, improving workplace
satisfaction, accessing non-tradable assets, or
reducing costs of supplies;
• Increase
• Organisational method NOT used before - result of
strategic decisions taken by management.
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Types of innovation - Organisational (2)
 Organisational Innovation:
• Business practices: implementation of new methods
for organising routines and procedures for the conduct
of work;
• Workplace organisation: new methods for distributing
responsibilities and
decision making among
employees for the division of work within and between
firm activities + new concepts for the structuring of
activities;
• External relations: new ways of organising relations
with other firms or public institutions.
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Types of innovation - Organisational (3)
 Organisational Innovation - examples:
» First implementation of a database of best practices;
» Establishment of new types of collaborations with research
organisations;
» First implementation of an organisational model that gives the
firm’s employees greater autonomy in decision making and
encourages them to contribute their ideas.
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Diffusion and degree of novelty
 Degree of novelty:
• Firm;
• Market;
• World.
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Example - product innovation/degree
of novelty
During the three years 200X to 200Y, did your
enterprise introduce:
(Product innovations)
New or significantly improved goods?
New or significantly improved services?
Yes
()
()
No
()
()
Were any of your product innovations during the three
years 200X to 200Y:
(Degree of novelty)
New to your market?
Only new to your firm?
Yes
()
()
No
()
()
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Example - organisational innovation
During the three years 200X to 200Y, did your enterprise
introduce:
(Organisational innovations)
New business practices for organising
procedures
New
methods
of
organising
work
responsibilities and decision making
New methods of organising external relations
with other firms or public institutions
Yes
No
()
()
()
()
()
()
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Types of innovation - example
 Innovation in a restaurant:
• Product innovation: delivery (new service);
• Process innovation: new type of oven (new equipment
used in the production process);
• Organisational innovation: new delivery unit (new
organisational unit/model);
• Marketing
innovation: billposting (new media for
promoting the delivery service).
Note. Source: Adapted from Heinlo, A. (2011). Measuring R&D&I
in Estonia. Almaty, Kazakhstan S&T Indicators Workshop.
(PowerPoint Presentation)
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Thank you!
http://www.uis.unesco.org
[email protected]
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Exercise…
Exercise 1:
Types of Innovation
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