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activities. Thus attention should be paid to the substance and form of three main
constituents of innovation data measuring: types of innovation, innovation activities and
related firms.
Manual defines innovation as “the implementation of a new or significantly improved
product (good or service), or process, a new marketing method, or a new organisational
method in business practices, workplace organisation or external relations” (OECD &
Eurostat, 2005, pp. 46). This comprehensive definition of innovation overmasters not only
identified four types of innovation but also a wide range of their possible combinations, i.e.
product/process, process/organisational, process/marketing or organisational/marketing
innovations. Identified essential characteristics, minimal requirements, and implementers of
particular types of innovation are integrated in Table 1.
Either type of innovation can consist of the implementation of a single significant change, or
of a series of smaller incremental changes that together constitute a significant change. In
accordance with the above introduced definition, an innovation must contain a certain
degree of novelty, i.e. should be: new to the firm; new to the market (i.e. the firm and its
competitors as well as a geographic region or product line); new to the world (i.e. all
markets and industries, spanning domestic and international). As shown in Table 1, the
minimum applicable novelty level for any type of innovation is that it must be new to the
firm. Hence, by measuring degree of novelty both the developers and adopters of
innovation, and market leaders or followers can be identified. Whereas in point of diffusion
innovation can be developed mainly by an innovative firm solely or in co-operation with
other business firms, public research or higher education institutions, as well as completely
outside the firm. Both novelty and diffusion aspects stress international constituent of
innovation. Firms interact with foreign partners, technology and knowledge flow across
borders, many markets in terms of their participants are global. Thus the globalisation
process is a new powerful driving force for innovation.
Common feature of innovation is that it must have been brought into actual use by a firm in
a result of effected innovation activities. Following Manual (OECD & Eurostat, 2005, pp. 47)
“innovation activities are all scientific, technological, organisational, financial and
commercial steps which actually, or are intended to, lead to the implementation of
innovations” despite their own novelty. During the period under consideration innovation
activities can be of three kinds:
Successful in having resulted in the implementation of an innovation (although the
innovation need not have been commercially successful).
On-going, with work in progress that has not yet resulted in the implementation of an
innovation.
Abandoned before the implementation of an innovation. ( pp. 59)
So, a firm that had innovation activities of any above-mentioned kind within the period
under consideration, regardless of its results, is an innovation-active firm. Accordingly, a
firm that had none innovation activity during the reference period is a non-innovative firm.
An innovative firm is one that has implemented innovation during the period under
consideration.
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