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The Non-Trivial Choice between Innovation Indicators

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We discuss the strengths and weaknesses of five alternative innovation indicators: R&D, patent applications, total innovation expenditure and shares in sales taken by imitative and by innovative products as they were measured in the 1992 Community Innovation Survey (CIS) in the Netherlands. We conclude that the two most commonly used indicators (R&D and patent applications) have more (and more severe) weaknesses than is often assumed. Moreover, our factor analysis suggests that there is little correlation between the various indicators. This underlines the empirical relevance of various sources of bias of innovation indicators as discussed in this paper.

Keywords: Factor analysis; Innovative output; Patents; R&D; Total innovation expenditure

Document Type: Research Article


Affiliations: 1: Delft University of Technology, Faculty Technology, Policy and Management, Jaffalaan 5, NL-2628 BX Delft. E-mail: 2: Department of Econometrics, Free University, Amsterdam 3: University of Amsterdam, SEO, Foundation for Economic Research

Publication date: January 1, 2002

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