Can innovation be measured?

The Oslo Manual offers guidance on developing sectoral, regional, and nationwide indicators for boosting innovation

Image shows pages of a book emitting light, alluding to knowledge about driving innovation

Strictly adhering to the rules is known as playing “by the book.” This elegant idiom, believed by some to have originated from the prominent role of the Bible (known as “The Book” in the English-speaking Christian world), can carry very different connotations depending on the context.

In specialized activities, playing by the book is highly desirable, especially when there are personal risks involved that need to be mitigated by strictly following written instructions, such as medical protocols, construction standards, or cybersecurity procedures.

In other situations, however, behaving this way can result in a negative reputation. In Brazilian culture, such rigidity in carrying out a task or performing a function is often seen as a lack of flexibility.

Sometimes, working strictly by the book can be a form of workplace protest, used in industries where strikes are restricted or prohibited. Known as “work-to-rule” actions, this disruptive approach can last for months in the public service sector.

Regardless of the importance placed on how strictly they are followed, rules of this nature are usually compiled in manuals, collections, or guides that provide a carefully organized overview of the practical knowledge of a specific professional field.

One example is the Project Management Body of Knowledge (PMBOK^®), a renowned source of reference in its field. The acronym BOK, standing for body of knowledge, also adopted in some Brazilian guides, can cause momentary confusion among newcomers due to its similarity to the word book.

Extended manuals

This form of publication has been essential to facilitating and enhancing the work of professionals in numerous areas of interest to the general public. They differ from textbooks and other instructional materials by emphasizing practical information.

As a result, some manuals gradually incorporate summaries of information potentially useful to their field, which are consulted as specific questions arise.

A personal example is the paradigmatic Perry’s Chemical Engineers’ Handbook, widely known as the “Chemical Engineer’s Bible,” which I often used in bygone eras.

The latest edition covers everything from mathematical and statistical formulas to the physical and chemical properties of materials, from unit operation techniques to process safety procedures. It has 2,272 pages and weighs 4.2 kg. The only reason it makes sense to continue calling it a handbook is because a digital version is also available.

Manuals and guides are periodically republished in updated editions, reflecting the evolution of knowledge in a field and changes in the understanding of which professional practices are most effective for dealing with the increasing complexity of a given domain.

The first edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM), published in 1952, described 106 diagnoses in just over 100 pages. The current revised edition (DSM-5-TR), referred to as the “Bible of Psychiatry,” describes three times as many mental conditions in detail across more than 1,000 pages.

STI guidelines

Two key references in science, technology, and innovation (STI) are the Frascati Manual and the Oslo Manual, both named after the city where their first editions were formulated following extensive collaborations by experts.

Both are published by the Organisation for Economic Cooperation and Development (OECD) as part of a family of manuals that set out guidelines for measuring STI activities.

The Frascati Manual, released in 1963, just two years after the OECD was created, focuses on data related to research and development (R&D). The Oslo Manual, the first edition of which was published in 1992, focuses on data used to measure innovation.

Three questions arise. The first is: what is the OECD’s interest in this type of publication? The OECD is an international organization dedicated to building “better policies for better lives” by fostering prosperity and opportunity, supported by equality and well-being.

A fundamental part of its mission is to encourage countries to cooperate and adhere to common international statistical standards, offering a means of carrying out reliable comparative analyses to support the formulation of solutions to social, economic, and environmental challenges.

The extensive methodological work involved is reflected in dozens of manuals, guides, and guidelines.

Even countries that are not OECD members, such as Brazil, shape their official statistics according to these guidelines, especially when seeking membership status. Brazil has been a key partner of the OECD since 2007, and has been a formal candidate for full membership since 2022.

The second question is: why create a family of manuals to measure STI activities?

In the 1950s, professor Robert Merton Solow of the Massachusetts Institute of Technology (MIT) demonstrated that contrary to traditional economic thinking, technological progress does more to stimulate economic growth than capital accumulation and labor force expansion, the classical factors of production.

Solow, who died in 2023, attributed half of US economic growth in the early twentieth century to technological innovation. His research, published in 1957, earned him the Nobel Memorial Prize in Economic Sciences thirty years later.

From then on, STI activities came to be seen by policymakers as essential to economic development.

The third question is: why is it necessary to establish meticulous guidelines for measuring STI activities?

As with any human activity, operational definitions are needed to describe what should be measured, as well as agreed criteria on how to measure it. What is innovation, for example?

The Oslo Manual defines it as a “new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and has been made available to potential users (product) or brought into use by the unit (process).”

But what is a new product that differs significantly from previous products?

Responding via the negative—meaning what is not a new product—the manual states that “product introductions involving only minor aesthetic changes, such as a change in color or a minor change in shape, do not meet the requirement for a ‘significant difference’ and are therefore not product innovations.”

Support for innovation

The primary objective of the manual’s guidelines for collecting, reporting, and using innovation data is to support national statistics agencies and other producers of innovation data.

In Brazil, this includes the Brazilian Institute of Geography and Statistics (IBGE), which publishes its Innovation Survey (PINTEC) every three years based on the Oslo Manual’s guidelines.

The survey “provides information for the construction of sectoral, regional, and nationwide innovation indicators for Brazilian companies with 10 or more employees, focusing on the activities of the extractive and processing industries, the electricity and gas sectors, and selected services.”

Another function of these manuals is to solidify concepts.

Thus, the Oslo Manual emphasizes that “innovation is more than a new idea or an invention. An innovation requires implementation, either by being put into active use or by being made available for use by other parties, firms, individuals, or organizations. The economic and social impacts of inventions and ideas depend on the diffusion and uptake of related innovations.”

Implementation is usually the most difficult part of the innovation process. The saying that “genius is 1% inspiration and 99% perspiration,” attributed to Thomas Edison, is fitting.

Wider awareness of the manual will help reduce the risk of the word innovation becoming overused or misused by companies and organizations promoting themselves as innovative without taking any actions that justify the label.

It will also help strengthen innovation across society by emphasizing that it is a “dynamic and pervasive activity that occurs in all sectors of an economy; it is not the sole prerogative of the business enterprise sector.”

The Portuguese version of the fourth edition of the Oslo Manual, translated by the Brazilian Funding Authority for Studies and Projects (FINEP), has just been released. The printed edition is published by the São Paulo State Federation of Industries (FIESP) in partnership with the National Service for Industrial Training (SENAI-SP).

To the new Oslo Manual, welcome to Brazil and other Portuguese-speaking nations!

Guilherme Ary Plonski is a senior professor at the School of Economics, Administration, Accounting and Actuarial Science and at the Institute for Advanced Studies of the University of São Paulo (USP), where he previously served as director. He was managing director of the Technological Research Institute of the State of São Paulo (IPT), president of the National Association of Entities Promoting Innovative Enterprises (ANPROTEC), and scientific coordinator of USP’s Technology Policy and Management Center. A full member of the São Paulo State Academy of Sciences (ACIESP), he is an emeritus researcher at the National Council for Scientific and Technological Development (CNPq). He also serves on the Research and Innovation Committee of Hospital Israelita Albert Einstein and on the Board of Governors of the Technion – Israel Institute of Technology.

Portrait: Leonor Calasans / IEA-USP

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