Innovation policy

What is innovation ?
Combination of creativity, novelty and market.
According to OECD definition two types of technological innovation: product and process - Product innovation= implementation and commercialization of a product with improved performance characteristics as to deliver objectively new or improved services to the consumer. - Process innovation= implementation or adoption of new significantly improved ways of production methods: changes on equipment, HR, working methods and combination of these.

The value of innovation cannot be reduced to the only utility: The value of technology is the combination of technological utility but also the customers. A minimum group of customers makes it possible for the product to get to the market: for it to get to the market and pass from a niche product to a mass market product. The third component is the availability of complementary goods or services.

Innovation is also seen as a sequence going from invention through innovation to imitation. Imitation, because if innovation brings competitive advantage, other firms will want to diffuse the same.

Inputs in the process
R&D investment

Outputs
Evaluated through new products or goods put on the market, number of patents, intellectual property rights, which give the right to choose how to exploit an invention. But this indicator gives information on inventions and not on innovations.

What would be the optimal allocation of resources to get the best performance of innovation?

Innovation should not be considered as a result of something but as a process: - Firms are the location of innovation and should have the ability to translate R&D into market designed products. - Innovation is a social process: there is interaction between science, research, technology and market. - Innovation is a complex interactive process

2 levels of infrastructure are needed to make this happen: research and knowledge and there