OECD Business Innovation Statistics: Unpacking key trends and findings

Statistical indicators from national statistical organisations, compiled using a common approach, offer insights into business innovation beyond traditional measures like R&D or patents, helping policymakers analyse innovation patterns  and identify strengths and weaknesses across different types of firms. 

Innovation surveys conducted worldwide in line with the OECD/Eurostat Oslo Manual (2018) ask companies to self-report on a wide range of innovation-related items. This enables a comprehensive picture of a company’s innovation profile and the context in which it operates. The Oslo Manual defines an innovation as the implementation of a new or significantly improved product or business process, regardless of whether it involves formal R&D or is protected by patents or formal intellectual property, concepts covered in complementary OECD statistics. This broad-based view of innovation is key for capturing a multidimensional range of innovation activities, drivers and outcomes, all of which are highly relevant for policy. 

The OECD Business Innovation Statistics Database, updated every two years, offers a unique compilation of 80 innovation indicators base on how companies develop and implement innovations, what inputs they rely on, and what outcomes they achieve. The latest update covers the period 2020-2022 for 33 OECD Members and seven key partner and accession countries. 

To note, despite a high degree of harmonisation, differences in survey design and in how firms in different contexts engage in surveys and interpret concepts such as “novelty” or “significant improvement” can affect cross country comparability. As a result, country figures are best interpreted as indicative of broad patterns and variation, rather than as precise measures of countries’ overall innovative performance. The indicators are particularly well suited for identifying structural differences, such as between firm size of industries, and for describing general cross-country trends.

Across countries, the share of enterprises reporting having introduced at least one innovation during 2020–2022 varies widely around a median value close to 50%. In Canada, nearly three-quarters of enterprises reported having introduced a new or improved product or business process (i.e. innovative enterprises), while in Romania the share is below 10%. The share of enterprises that engaged in innovation-oriented activities (i.e. innovation-active enterprises) is higher, because some of these companies have abandoned their innovations or are still working towards implementation, but shows a similar pattern across countries. 

Innovation performance has also changed over time. Compared with the previous reference period (2018-2020), the share of innovative enterprises declined in around three out of four OECD Member countries with comparable data. Because of reference periods overlap in 2020, it is difficult to attribute this change to the COVID 19 pandemic and its aftermath. The decline may be explained by the fact that several pandemic-induced changes like the adoption of teleworking practices or the provision of new digital and remotely delivered services were likely already captured in the 2018-2020 data and thus less frequently reported as innovations in 2020-2022.

The reach of innovation is higher than counts of innovative companies implies. Since large enterprises are more likely to report innovations, the exposure of the workforce to innovation is much higher. For example, in the United States within the scope of the innovation survey, innovation-active enterprises represent 55% of all enterprises but account for 68% of all employment. In the median OECD country, close to 70% of employment is located in companies engaged in innovation.

The likelihood of reporting innovations varies across industries. In addition to the R&D services sector (ISIC M72, with 83%), which provides R&D services to other industries, other R&D-intensive manufacturing industries, such as Pharmaceuticals, Computer and electronic and optical products, as well as Information and communications technology (ICT) services exhibit the highest innovation intensity. Several other service industries, including Publishing and content activities, Advertising and market research, and Financial and insurance services, also exhibit above average innovation rates, highlighting that innovation is widespread across types of economic activity. Differences in industrial structure contribute to country-level differences.

Furthermore, it is important to note that the innovation intensity of industries differs across countries and that patterns of innovation intensity reveal sectoral innovation strengths within each country.

Innovation surveys are designed to capture the multi-faceted nature of business innovation across different types of products (goods and services) produced by the enterprise and the full array of business process it runs. Business process innovation is significantly more prevalent than product innovation (on average 38% compared to 26% of all enterprises), although less so in consumer-oriented industries. Given the broad-based definition of innovation, the degree of novelty across innovative enterprises varies and it is not surprising that only a fraction has introduced business processes or products that are new to the market in which enterprises operate. On average across countries, about half of innovative enterprises introduce new or improved goods or services that are new to the market. The likelihood of introducing such products is higher for enterprises that perform R&D.

Research and development (R&D) is a key driver of innovation, but it is not a prerequisite. With some exceptions, across the majority of countries in the OECD Business Innovation Statistics, less than half of innovative enterprises perform R&D in-house or outsource it to third parties. Innovative enterprises that do not engage in R&D innovate by implementing, using, adapting existing technologies and developing other capabilities and intangible assets to transform business process and customer offerings. 

While innovation is measured at the level of individual enterprises, it is important to note that enterprises do not innovate in isolation. They often rely on innovations first developed elsewhere and also share responsibility with external partners for key elements of the innovation process, including suppliers, customers, and also public R&D institutions. Effective linkages and division of labour is key for the effectiveness of innovation systems. Enterprises with internal R&D capabilities appear to be better prepared to engage in innovation co-operation. In more than half of the countries, enterprises conducted innovation activities with one or more co-operation partners in over 40% of enterprises that reported R&D, compared to less than 20% for enterprises that only engaged in non-R&D activities.

Innovation surveys capture several resources and capabilities that contribute to enabling innovation outcomes, including indicators of workforce qualification and public support, reported below, and several others, such as intellectual property protection strategies.

Human capital is a core input into innovation, as it underpins firms’ ability to generate, absorb and apply new knowledge. Across countries, innovation-active enterprises tend to employ a higher share of tertiary-educated workers than the average enterprise, highlighting the close relationship between skills and innovation outcomes. Highly educated workers contribute not only through scientific and technical expertise, but also by supporting problem-solving, organisational change and the effective adoption of new technologies.

Public authorities at different levels of governments provide financial support to encourage business innovation. Most innovation-active enterprises do not receive public financial support – on average only one in five does receive. Large companies are more likely to receive support than at small and medium-size enterprises, especially direct government funding. The indicators show that innovation-active companies are relatively more likely to report tax incentives than other support in the case of Korea, Lithuania, Portugal and the United States, whereas in countries where no R&D tax incentives are available or have been introduced recently, like Estonia and Germany, the reverse is the case.

The economic footprint of innovative businesses is sizeable, as they account on average for more than three-quarters of economic activity (turnover) for the activities under the scope of innovation services, which so far exclude agriculture, finance and public and personal services. The effective footprint of actual innovations is more difficult to measure, particularly for process innovations. Innovation surveys elicit from respondents the percentage of business turnover attributable to new products, by degree of novelty. On average, sales from products introduced in the previous three years account for 13% of business turnover, and about one-third of that stems from products that are new to the market.

Innovation surveys capture additional impacts of policy and social interest. In several countries, over a half of innovative companies point to having introduced innovations with significant environmental benefits, distinguishing between benefits that appear in production within the enterprise and its supply chain (upstream) and those that are realised when the firm’s outputs are used (downstream). The types of environmental benefits range from increased efficiency in the use of natural resources and energy through to reduced pollution. A recent OECD publication draws on these data to assess the factors driving the implementation of these innovations.

Innovation surveys are constantly evolving to capture new phenomena such as AI, its actors and its economic and broader societal impacts. While complementary sources and methods develop, it is important to ground innovation measurement in relevant and workable concepts and definitions that capture the pervasive and multidimensional nature of innovation and indicators and analysis that help inform policy and societal discussions. If you have proposals or ideas for enhancing the measurement of innovation, submit your proposals to the 2026 Conference of the OECD Blue Sky Forum on the Future of Science and Technology Data and Indicators.

Contact

innostats@oecd.org