3. COMPETING IN THE WORLD ECONOMY
3.8. Innovation within companies
To understand how diffusion of new technologies
takes place, and to produce a more complete picture
Defining innovation
of how innovative a firm is, innovation surveys collect
The latest (3rd) edition of the Oslo Manual defines
data on whether the innovation was developed within
innovation as the implementation of a new or sig-
or outside the firm, and to what extent the firm inter-
nificantly improved product (good or service), or
acted with other parties during the process.
process, a new marketing method, or a new organ-
Data on innovations mainly developed within a firm
isational method in business practices, workplace
(so-called  in-house innovators ) confirm that small
organisation or external relations. This implicitly
and medium-sized enterprises (SMEs) tend to be
identifies the following four types:
 adopters more frequently than large firms. In more
" Product innovation: the introduction of a good
than half of the countries surveyed, 40% or more of all
or service that is new or significantly improved
large firms had developed during 2004-06 an in-house
with respect to its characteristics or intended
product innovation, and around 20% of all SMEs.
uses. This includes significant improvements
The pattern is similar for in-house process innova-
in technical specifications, components and
tions. The highest rates (over 40%) were for large firms
materials, incorporated software, user friend-
in Australia, Belgium, Estonia, France, Germany,
liness or other functional characteristics.
Ireland and Luxembourg. For these countries the rates
" Process innovation: the implementation of a new
for SMEs were around 20% to 25%.
or significantly improved production or delivery
In terms of sectors, manufacturing firms tend to
method. This includes significant changes in
undertake more in-house innovation than services
techniques, equipment and/or software.
firms, for both products and processes. However, in
" Marketing innovation: the implementation of
Luxembourg in-house process innovators were more
a new marketing method involving significant
prevalent among service firms.
changes in product design or packaging, prod-
In most countries, there is less sectoral difference in
uct placement, product promotion or pricing.
terms of firms propensity to innovate in house for
" Organisational innovation: the implementa-
processes than for products. This confirms that in
tion of a new organisational method in the
most countries, product innovation is still more prev-
firm s business practices, workplace organisa-
alent among manufacturing firms than process inno-
tion or external relations.
vation (Australia is an exception).
The first two types are traditionally more closely
related to technological innovation (also referred
to as TPP innovation). Firms are considered
innovative if they have implemented an innova-
tion during the period under review (the obser-
vation period is usually two to three years).
Sources
Eurostat, Community Innovation Survey (CIS) 2006
(NewCronos), June 2009.
National data sources.
Going further
OECD and Eurostat (2005), Oslo Manual: Guidelines for
Collecting and Interpreting Innovation Data, 3rd edition,
OECD, Paris, www.oecd.org/sti/oslomanual.
Figure notes
France: manufacturing only.
New Zealand: SMEs are firms with 10-99 employees.
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
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3. COMPETING IN THE WORLD ECONOMY
3.8. Innovation within companies
In-house product innovators by size, 2004-06 In-house process innovators by size, 2004-06
As a percentage of all firms As a percentage of all firms
Large firms SMEs Large firms SMEs
Luxembourg
Estonia
Germany
France
France
Luxembourg
Belgium
Ireland
Austria
Germany
Ireland
Belgium
Greece
Australia (2006-07)
Sweden
Austria
Denmark
Spain
Finland
Portugal
Portugal
Greece
Slovenia
Finland
Czech Republic
Denmark
New Zealand
Slovenia
Spain
Turkey
Netherlands
New Zealand (2006-07)
Estonia
Poland
Poland
Czech Republic
Norway
Netherlands
Australia
Slovak Republic Slovak Republic
Turkey Norway
Hungary Hungary
0 20 40 60 80
0 10 20 30 40 50 60
% %
1 2 http://dx.doi.org/10.1787/745147353337 1 2 http://dx.doi.org/10.1787/745187300120
In-house product innovators by sector, 2004-06 In-house process innovators by sector, 2004-06
As a percentage of all firms As a percentage of all firms
Services Manufacturing Services Manufacturing
France Australia (2006-07)
Germany France
Australia (2006-07) Ireland
Luxembourg Belgium
Ireland Germany
Belgium Turkey
New Zealand (2006-07) Estonia
Estonia Finland
Sweden Luxembourg
Finland Greece
Austria Austria
Denmark Portugal
Turkey Denmark
Slovenia Spain
Netherlands New Zealand (2006-07)
Greece Sweden
Norway Czech Republic
Czech Republic Slovenia
Portugal Norway
Spain Poland
Poland Netherlands
Slovak Republic Slovak Republic
Hungary Hungary
0 5 10 15 20 25 30 35 40 0 5 10 15 20 25 30 35 40 45 50
% %
1 2 http://dx.doi.org/10.1787/745227131530 1 2 http://dx.doi.org/10.1787/745256621152
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
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