How Innovative Are Innovations? A Multidimensional, Survey-Based Approach

We suggest that, with proper design, innovation surveys can provide valuable data on innovation rates that inform judgments about whether the reported innovations are important, and in what sense, thus making such data more interpretable than claims that such innovations are simply “new.” First, we recommend asking respondents questions about a specific innovation in an identified line of business. Second, we recommend asking respondents to characterize their innovations in terms of different features that potentially link to the social welfare impact of the innovation. We propose five such features: technological significance, utility, uniqueness, imitability, and how different the innovation is from what the innovating firm has previously commercialized (what we call “distance” or the “implementation gap”). The paper then illustrates the utility of our approach by, first, using newly collected data to construct measures corresponding to the proposed dimensions of innovation. We then use those measures to inform judgments about the importance of innovations in different industries. By recognizing the distinct features of innovations, we also showed how these features, when combined in novel and distinct ways, can provide a more nuanced view of innovation and its complexity.