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 n Europe, the Community Innovation Survey (CIS) is starting to answer policy-makers' questions about innovation - even those related to intangibles such as skills and knowledge. Co-ordinated by the European Commission's statistical office, Eurostat, and the Innovation Directorate, the second survey (CIS2) was carried out by the EU Member States in 1997/98. The results are already being used by national governments such as the United Kingdom's, which draws on CIS2 for its UK Competitiveness Indicators 1999(1), and the first Commission studies based on analysis of the data will be published during 2000. "The real benefit of CIS is that for the first time it enables us to test propositions found in the theoretical literature of innovation," explains Georg Licht of the Centre for European Economic Research (ZEW), responsible for gathering data from German companies. "By making comparisons between countries we can see, for example, how the different structures and resources of the academic research bases in the United Kingdom and Scandinavia and those in Italy and Spain influence the way that knowledge flows within their economies. This kind of insight is of tremendous value to policy-makers at national and EU levels."
Heterogeneity
The CIS is still evolving towards a system which produces truly comparable data from all Member States. "The first survey had a number of weaknesses which invalidated EU totals and averages, so that we were only able to publish the separate results for each country," admits Frank Foyn of Eurostat. "Although there are still some issues to be sorted out, the CIS2 questionnaire and survey methodology was much better harmonised." This makes it possible to compare aggregated national data, and to calculate EU averages - for example, for the value of sales of new and improved products, by company size and sector.
Licht and colleagues at ZEW have recently produced a report on innovation in the service sector, based on exhaustive analysis of German CIS2 data, for the European Commission's Innovation Studies series(2). For him, the picture revealed by the CIS data is one of heterogeneity - not just between European countries but also between, and even within, industrial sectors. But he believes that even more reliable and useful findings could be produced if researchers had direct access to company-level micro-data, rather than simply to aggregated national figures.
At present, in order to comply with the data dissemination laws of all Member States, Eurostat has released micro-data only for eight countries, and then only in the cases of a small number of studies commissioned by the Enterprise DG. "Most researchers do not even have access to the micro-data from their own country," says Licht.
The intangibles of innovation in a knowledge-based economy are hard to measure. However, in the field of information and communication technologies, where US companies accounted for 60% of patents granted by the United States Patent and Trademark Office, the gap between the US and most European countries appears to have widened in recent years. (Source: OECD Science, Technology and Industry Scoreboard 1999)
In detail
The broad-brush comparisons which can be made using aggregated data are valuable in their own right. "Policy-makers are already gaining an insight into the relative importance of different obstacles to innovation, and into the role of the customer or of venture capital in the innovation process," Licht says. But ZEW's statistical analysis of the company-level German data makes it possible to observe trends at a much higher resolution.
He offers the example of the role of consulting firms in facilitating the flow of new technological knowledge. "In German manufacturing industry, consultants play a limited role, normally as providers of market information," he says. "In the service sector, by contrast, they form a critical link between small and medium-sized enterprises and the academic knowledge base."
But it is unclear whether this is an effect of Germany's knowledge infrastructure, or if the pattern is common to EU countries with quite different research institutions. For example, do consultants play a more or less important role in the British service sector, where universities are more engaged in contract research? Licht was able to compare German and Canadian data, and was surprised to discover that consultants perform a very similar function in the service sector there. "But comparisons of this kind require access to the micro-data, so we cannot yet compare Germany with other EU countries."
Across all EU Member States, innovation expenditure of all types is lower in the service sector than in manufacturing industry, while service sector spending on research and development is also lower as a proportion of the whole. (Source: Eurostat/CIS2)
Standardisation
Licht is hopeful that in future, qualified researchers will be given access to the CIS micro-data. "We have to find a solution for CIS3," he says. "Overcoming the differences in national data protection laws will probably take at least five years. A short-term alternative would be for Eurostat to make the data available to researchers willing to travel to Luxembourg to work on it in strict confidence."
He also looks forward to the day when other OECD countries collect comparable innovation data. "Eurostat plays an important role in encouraging international discussion, with a view to introducing a standardised survey methodology," he says. "Canada and Australia already produce some CIS-comparable data, and there are signs that the US will implement a similar system in the near future."
(1) The full report can be downloaded from the website of the UK's Department of Trade and Industry at http://www.dti.gov.uk/comp/competitive/
(2) The Innovation Studies series continues the former European Innovation Monitoring System (EIMS) reports. A list of available reports, which can also be ordered on-line, is at /eims/src/stud.htm |
INNOVATION: FACTS AND FIGURES
