Analysing Innovation Output Indicators: The US Experience

The state of knowledge regarding technological change has generally been shaped by the nature of the data which were available to scholars for analysis. Such data have always been incomplete and, at best, represented only a proxy measure reflecting some aspect of the process of technological change. Simon Kuznets observed in 1962 that the greatest obstacle to understanding the economic role of technological change was a clear inability of scholars to measure it. More recently, Cohen and Levin (1989) warned:

A fundamental problem in the study of innovation and technical change in industry is the absence of satisfactory measures of new knowledge and its contribution to technological progress. There exists no measure of innovation that permits readily interpretable cross-industry comparisons. Moreover, the value of an innovation is difficult to assess, particularly when the innovation is embodied in consumer products.