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Review and new evidence on composite innovation indicators for evaluating national performance

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  • Grupp, Hariolf
  • Schubert, Torben

Abstract

The purpose of this contribution is to present a survey of the recent developments in constructing composite science and technology (S&T) indicators on a national level as well as new evidence of the variability of such S&T indicators which opens the gateway to "country-tuning". It has become standard practice to combine several indicators for science, technology, and innovation to form composite numbers. Especially in the light of this variability, two questions arise. Firstly, are the results (especially rankings) stable with respect to weights? Secondly, is there hope to define "economically" reasonable weights? In order to provide answers to these questions, we use data from the European Innovation Scoreboard 2005 (EIS 2005) to exemplify our reasoning. Concerning the first question, we give genuine evidence on the existence of immense variability, possibly invalidating the results. Further, we also show that even existing and well-accepted methods, like equal weighting, Benefit of the Doubt weighting (BoD) and principal component analysis weighting (PCA) may lead to drastically differing results. Concerning the second question we will demonstrate that by each composite indicator weighting a set of shadow prices is implied expressing one indicator in terms of another. Whether the weights are sensible should be evaluated on the basis of these shadow prices. It turns out that those implied by EIS 2005 contain strange peculiarities. After that we plead for more care in constructing composite indicators. Especially weights should be chosen on the basis of shadow prices, rather than, say, by equal weighting or other automatic methods. Lastly, we discuss the merit of composite indicators and argue that they have a valuable communication and competition function, but they should be accompanied by multidimensional representations, which provide the basis for the construction of policy measures.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 39 (2010)
Issue (Month): 1 (February)
Pages: 67-78

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Handle: RePEc:eee:respol:v:39:y:2010:i:1:p:67-78

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Web page: http://www.elsevier.com/locate/respol

Related research

Keywords: Composite indicators National innovation systems Science and technology indicators Scoreboards;

References

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  12. Gene M. Grossman & Elhanan Helpman, 1993. "Innovation and Growth in the Global Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262570971, January.
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Citations

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Cited by:
  1. Filippetti, Andrea & Peyrache, Antonio, 2011. "The Patterns of Technological Capabilities of Countries: A Dual Approach using Composite Indicators and Data Envelopment Analysis," World Development, Elsevier, vol. 39(7), pages 1108-1121, July.
  2. Filippetti, Andrea & Peyrache, Antonio, 2010. "The Dynamic of Technological Capabilities of Countries: A Dual Approach Using Composite Indicators & Data Envelopment Analysis," MPRA Paper 21629, University Library of Munich, Germany.
  3. Nuno Boavida, 2011. "How composite indicators of innovation can influence technology policy decision?," IET Working Papers Series 03/2011, Universidade Nova de Lisboa, IET/CESNOVA-Research on Enterprise and Work Innovation, Faculty of Science and Technology.
  4. Blind, Knut, 2012. "The influence of regulations on innovation: A quantitative assessment for OECD countries," Research Policy, Elsevier, vol. 41(2), pages 391-400.
  5. Wu, Wei-Wen & Lan, Lawrence W. & Lee, Yu-Ting, 2012. "Exploring the critical pillars and causal relations within the NRI: An innovative approach," European Journal of Operational Research, Elsevier, vol. 218(1), pages 230-238.
  6. Torben Schubert & Léopold Simar, 2011. "Innovation and export activities in the German mechanical engineering sector: an application of testing restrictions in production analysis," Journal of Productivity Analysis, Springer, vol. 36(1), pages 55-69, August.

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