Measuring innovation misses the larger point

It is nearly a year since the last annual report on innovation across Europe as reflected in the annual Innovation Union Scoreboard, so a fresh one should be reaching us some time next month. The scoreboard measures the application of innovation by Member States using a basket of 24 performance indicators to decide whether you are first in class, running but keeping up, or failing to deliver in the innovation sweeps.

The last scoreboard had us firmly with the "innovation followers" camp, one of four categories defined by the process along with innovation leaders, moderate innovators and the modest innovators.

The top flight includes, in order: Sweden, Germany, Denmark and Finland. We are 10th overall of 27 so that sounds pretty good, doesn’t it? It certainly sounds better than being in the back of the class with the moderate and modest innovators.

The scorecard system purports to measure innovation and certainly people much cleverer than I are involved in deciding how to gauge relative innovation across the EU. And the scorecard is highly reputable and independent.

Fixed quantity
Yet the system bothers me. Innovation is talked about as if it were a fixed quantity. And your quantum of innovation is derived from two sources: being able to commercialise it and having a good research system.

My initial reservations arose when I saw commissioner for Industry and Entrepreneurship Antonio Tajani describe how the economic crisis had “negatively impacted innovation activity in some parts of Europe”.

How can that be true if what you need to be a good innovator is the ability to commercialise the stuff and have a good research system. Either you have quality research underway or you don’t; you are discovering useful things or you are spending money and wasting time.

If you have sound research you have it whether the economy is good or not, it is just more of a challenge to pursue research at a sustained level when cutbacks are making budgets tight.

So being a good innovator must come down to being able to sell innovation. But what then is innovation? How can you get your hands on the stuff?

Innovation must be a cipher for something else, fresh ideas, new ways of doing things, clever inventions, simple ways to save money by making more of something more cheaply. If you are good at coming up with good ideas then you must be good at innovation and you should therefore be classed as a leader and not a follower in the innovation standings.

But somebody with good ideas has them whether there is a recession or not. People still make money during recessions and launch products during recessions provided the ideas are good enough. So the real key to achieving high levels of innovation must come down to how good you are at selling not innovation per se, but selling your ideas.

But isn't that the way business has always been, with company success being based on sales of a product or service to make money? And this was always built on having a steady supply of good ideas and useful products coming through your system in order to build sales.

Good at business
Ultimately being good at innovation just sounds like being good at business, having a company that makes things that people want. If your product sells then you make money and try to develop new things that people want or learn how to make your original product more cheaply.

There were good business people out there being successful long before there were systems to measure innovation.

Yet companies across Europe are being extolled to “put innovation at the heart of all member states’ policy agendas” as argued by the Irish commissioner for Research Máire Geoghegan-Quinn. The goal for companies must be to make sure that they develop the ability to come up with – and nurture – bright new ideas, products and services if they want to prosper and stop wondering about how much innovation they have stocked up.