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EU industrial structure 2011 — Trends and Performance
iii35 technology
This section presents indicators describing the technology
in EU industries from different aspects. The indicators
R&D expenditures, patenting and developing of new
or improved products represent different stages of the
R&D&I process. While there is a relationship between
these indicators, there is no one‑to‑one correspondence.
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Expenditures on R&D are indicators on inputs in knowledge
production. Patent statistics are used to calculate output
indicators of knowledge production. Having a patent does
not, however, necessarily mean that the patenting firm
will be able to market a product. Nor does a new product
necessarily mean that there is a patent preceding its
commercialisation. Indicators reflecting the different stages
from R&D to new products are covered in Box III.5 below. 49
box III.5: Using indicators to assess innovation performance across
sectors
In this publication, the approach is specifically sectoral and therefore uses only the indicators linked to EU policies
that will provide a cross‑sector view of innovation inputs and outputs. The indicators chosen are R&D expenditure
and number of patents; they are the most commonly used, but present certain biases that are discussed later in this
box. They tend to estimate manufacturing better than services research activities.
In brief, innovation corresponds to four different categories of progress:
‑ product innovation
‑ process innovation
‑ market innovation
‑ organisational innovation
There are different types of indicators that can be used to capture innovation. Some will typically quantify inputs
while others will measure results of innovation. The various types of indicators are each better suited to measuring
certain types of innovation (product, process, market, and organisation).
input indicators for innovation performance
Research and development (R&D) is one among many activities that may be carried out in an innovation
process. R&D comprises basic research, applied research and experimental development. The indicators are
usually either R&D expenditure spending or number R&D personnel. In a knowledge‑driven economy, R&D
expenditure is not the only sign of innovation. Other types of measure can represent inputs that are supposed
to lead to progress. Expenditures on software, training, organisation, etc. also quantify the innovation effort.
The R&D indicator does not capture innovations in service activities very well. Services innovations often involve software
applications and research in social sciences that are not properly accounted for in R&D expenditure surveys. Such
surveys50 focus more on technological R&D than on social science R&D. 51 As this publication focuses on R&D expenditures,
it reflects the measurement of innovation in manufacturing better than innovation in services. Countries follow different
practices in their national surveys when it comes to allocating R&D expenditures of large, multi‑sector enterprises to the
different economic sectors. Similar R&D expenditure can be categorised in different industries across countries.
Output indicators for innovation performance
There are different ways to mark the outcome of innovation, for example by submitting a patent, creating a new
trademark, publishing an article or delivering new products to the market.
49 See OECD (2007) for a more detailed discussion of different indicators of R&D and innovation.
50 To understand the methodology behind R&D surveys, see OECD (2002).
51 For more information on innovation in services see Miles (2007). For an alternative source of sectoral company-based survey see the
‘2008 EU industrial R&D investment’ European Commission (2008).