Innovation in business firms is usually measured using indicators. But% of current sales from products (or services) recently developed,market share growth, or patent coverage counts don’t provide rigorousguidance. The MELF does.To see how, and because no firm acts alone, the incorporation of innovation from suppliers must be subtracted. The appropriate metric for a firm istherefore (p`- p)/c, where (p`- p) is the difference in performance the firm creates for its goods or services over and above its suppliers (where p is the economist’s Q, and likewise determined from the MELF) while c is the unit cost of delivery.The shape of the line charting this innovation metric against development spending shows exactly how a firm is doing against competition and provides the kind of pictorials that senior management can believe in, and respond to, for steering their firm toward greater growth and profitability for the future.To Government the dissemination of this metric offers a leverage point for stimulating national economic growth from firm level. For investment banks it provides a means for selecting the most promising enterprises. And to management consultants it offers a new advice platform.