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, which is Sum: (Q/c) enumerates sector innovation. For durable goods this rises over five decades in a unique shape with distinctive cusps and inflections. When Innovation Funnel expense (part of R&D) is also summed it exhibits the same distinctive shape, but a few years earlier. By such direct connection it's clear that innovation does, in fact and in numbers, drive the economy. (in contrast, when Sum: (Q/c) is compared to TFP (annually 1954-2001) it's very apparent, again by numbers, that TFP cannot represent innovation. Neither its growth nor its size are large enough) Using direct measurement a nation can now project what must be spent in a given year to make specific growth likely in a subsequent one. Policy can then be formulated to achieve it. Such capability is currently unimaginable. To maximize 21st Century opportunity, Direct Innovation Measurement should be brought into the National Accounts.
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Macro Metrics