Introduction MELF Equation Macro Metrics Micro Metrics Beyond GDP How To Access Acknowledgements About Us
Innovation Metrics
Business Innovation Economics
Innovation improves the quality of everyday objects and the services they provide. But in business, which must survive and prosper, innovation must also deliver on cost. Taking both into account requires the ratio (Q/c), where Q is the quality perceived by the item’s purchaser (as calculated using the MELF) and c the unit cost of its delivery. The ratio is not an indicator of innovation, it is not a proxy for innovation; it is an exact measurement of innovation. When calculated annually for a large number of items whose data is uniquely available from the DINTEC™ resource, its aggregate Sum: (Q/c) is a Macro Metric of technology growth. For all durable goods it rises over five decades in a unique shape with distinctive cusps and inflections. And when the D of R&D is also summed it reflects the same distinctive shape, but a few years earlier. Such a delayed but direct connection has been unsuccessfully sought for decades in the era of TFP without MELF. It’s profound for economic policy that spending on the D of R&D drives ideas through the innovation funnel, because the resulting product quality upwardly effects the output of goods to which D has been previously applied. Now a nation can project what must be spent in a given year to make specific growth likely in a subsequent year while simultaneously benchmarking the productivity of its national system of innovation. These capabilities are currently an impossible dream.
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Macro Metrics