National Endowment for Science, Technology & the Arts (NESTA) of U.K, a nonprofit organization that promotes innovation, is making efforts to come up with an Innovation Index, one that is Industry specific by 2010.
Now why need Innovation Index/metric when you can judge the state & performance of Innovation activity of one industry by looking at how much money is invested in Research & Development
activities or how much patents one industry holds which is measured by current metrics available.
In the article of Business Week it has been rightly mentioned that today Innovation cannot be judged solely by money in R&D or holding patents. An example of London's Financial services sector is given where in not much money is going into R&D & therefore if one measured Innovation through existing metrics then the conclusion will be that London financial services Sector is not innovating which cannot be the case as London's financial services sector lead the world in this sector.
So if we are saying that current metrics measuring Innovation on the basis of R&D and patents won are becoming obsolete than what all elements should be considered while developing an index of Innovation.
Inorder to answer this NESTA has launched a website www.innovationindex.org.uk
which is calling for Ideas such as What is Innovation and what elements constitutes Innovation.
Below is what I think should be the elements, to be used while Measuring Innovation.
1. Number of opportunities/problems noticed. By this I mean how many problems/opportunities a firm has noticed inorder to develop new innovative solutions & provide better value to consumers.
2. Number of failures a company/industry has given. Failing is the first step towards sucess & if a firm/ industry is in the business of Innovation it should fail & fail fast inorder to suceed. So I think failures also provide a great way to judge whether a firm/ industry is in the process of Innovation or not.
3. Has the firm/ industry made things/processes for consumers simple. Innovation can also mean simple because it is easy to understand for consumer. For eg: Windows operating system is said to be a innovation just because it is simple to understand and users were not required to punch codes. Simplicity in financial sectors would mean easy understanding of financial plans to a layman.
Yellow tail wines added simplicity & fun to wine drinking and created a new blue ocean. So simplicity should be one of the element of Innovation Index.
4. Utilisation of resources: Rate of Increase/decrease in productivity of resources due to Innovative activity to know whether the innovation activity has improved/ reduced the utilization of resources.
5. Personality of employees- Most of the Innovation is done by people who are visionaries & future thinkers. They are great observers, are extremely passionate, problem solvers as well as risk takers. So Innovation Index should judge the personality of employees in various industries to know whether most of them are visionaries & risk takers or not.
6. Customer Orientation- I have already mentioned that Innovation Index should look at whether firm/ industry has made things or processes simple for users but I would like to add that Innovation Index should also include element of Customer Orientation of an industry or a firm. How customer focused a firm really is. Does it listens to consumers, do they focus on complaints, feedback, do they co- create with customers, etc. In short are they customer focused or not.
These were some of the points that I think Innovation Index should Include & be judged when evaluating Innovation in different industries or firms.
Till Next Time
Keep Innovating
Neeraj Jain
Now why need Innovation Index/metric when you can judge the state & performance of Innovation activity of one industry by looking at how much money is invested in Research & Development
activities or how much patents one industry holds which is measured by current metrics available.
In the article of Business Week it has been rightly mentioned that today Innovation cannot be judged solely by money in R&D or holding patents. An example of London's Financial services sector is given where in not much money is going into R&D & therefore if one measured Innovation through existing metrics then the conclusion will be that London financial services Sector is not innovating which cannot be the case as London's financial services sector lead the world in this sector.
So if we are saying that current metrics measuring Innovation on the basis of R&D and patents won are becoming obsolete than what all elements should be considered while developing an index of Innovation.
Inorder to answer this NESTA has launched a website www.innovationindex.org.uk
which is calling for Ideas such as What is Innovation and what elements constitutes Innovation.
Below is what I think should be the elements, to be used while Measuring Innovation.
1. Number of opportunities/problems noticed. By this I mean how many problems/opportunities a firm has noticed inorder to develop new innovative solutions & provide better value to consumers.
2. Number of failures a company/industry has given. Failing is the first step towards sucess & if a firm/ industry is in the business of Innovation it should fail & fail fast inorder to suceed. So I think failures also provide a great way to judge whether a firm/ industry is in the process of Innovation or not.
3. Has the firm/ industry made things/processes for consumers simple. Innovation can also mean simple because it is easy to understand for consumer. For eg: Windows operating system is said to be a innovation just because it is simple to understand and users were not required to punch codes. Simplicity in financial sectors would mean easy understanding of financial plans to a layman.
Yellow tail wines added simplicity & fun to wine drinking and created a new blue ocean. So simplicity should be one of the element of Innovation Index.
4. Utilisation of resources: Rate of Increase/decrease in productivity of resources due to Innovative activity to know whether the innovation activity has improved/ reduced the utilization of resources.
5. Personality of employees- Most of the Innovation is done by people who are visionaries & future thinkers. They are great observers, are extremely passionate, problem solvers as well as risk takers. So Innovation Index should judge the personality of employees in various industries to know whether most of them are visionaries & risk takers or not.
6. Customer Orientation- I have already mentioned that Innovation Index should look at whether firm/ industry has made things or processes simple for users but I would like to add that Innovation Index should also include element of Customer Orientation of an industry or a firm. How customer focused a firm really is. Does it listens to consumers, do they focus on complaints, feedback, do they co- create with customers, etc. In short are they customer focused or not.
These were some of the points that I think Innovation Index should Include & be judged when evaluating Innovation in different industries or firms.
Till Next Time
Keep Innovating
Neeraj Jain
