| Abstract: | The author provides evidence, derived from his own published research, to justify his claim that all the commonly used indicators of technical intensity of innovation suffer from severe limitations. The paper consists of a critique, as indicators of innovativeness, of increase of value-to-weight ratios of finished products, R&D expenditure, the number of QSEs employed, patent and licensing activity and the rate and direction of the flow of technology. He shows that technical change can increase value added-to-weight of a product but that differences in the ratio do not necessarily reflect different technical performance; that in-house formal R&D is not the only way in which technical change is brought about in a firm; that one must know not only how many QSEs are employed by a firm but also how they are distributed over the firm's operations; that patent and licensing information need very skilled interpretation to produce valid conclusions and that outward flow of technology, though perhaps a necessary criterion of innovativeness is not a sufficient one. The paper concludes with some suggestions for an alternative approach, the key to which is to combine quantitative data derived from the above indicators with qualitative in-depth studies of how innovation actually occurs in the economic sector under study. |
