Innovation in the business enterprise sector 2011-2013

The Community Innovation Survey (CIS) is carried out every second year, and international comparisons based on these data have historically shown Norway as a relatively low scorer compared to other European countries. For example, Norway ranks below the EU average in the Innovation Union Scoreboard and is classified as a “moderate innovator”, the third lowest of four groups. The other Nordic countries: Denmark, Sweden and Finland, are all in the top group of “leading innovators”.

Yet, Norway has done very well on core economic indicators during the same time period: such as having a high GDP per capita, a high overall trade balance surplus, low unemployment etc. If we expect a positive relationship between high innovation (as measured by the CIS) and positive economic outcomes, this suggests that Norwegian innovation rates are lower than they reasonably “should be” when comparing the Norwegian economy to those of other countries. This phenomenon has been termed the “Norwegian Puzzle” by the OECD.

Most countries collect data on R&D and innovation separately, while some – including Norway – have integrated them in a single combined survey. Technology and R&D were initially considered to be the primary drivers for innovation, and the first CIS only covered the manufacturing industries. However, the current CIS is significantly wider in both scope and coverage. Combining the surveys may thus have inadvertently limited the respondents’ understanding of what constitutes an innovative activity by maintaining too strong a link between R&D and innovation.

A limited test survey carried out in conjunction with CIS 2010 supported the notion that having a combined business enterprise R&D and innovation survey negatively impacts the reported incidence of innovation. This report details the results from a full scale “off year” innovation survey modelled on CIS 2012. The survey was carried out in Norway for the period 2011-2013 and done to assess the impact of the trial findings for the business enterprise sector as a whole, as well as to serve as a new reference point should the R&D and innovation surveys be split from each other.

Overall, our data show that there are clear and significant differences in the results between carrying out the CIS separately and integrating it with the business enterprise R&D survey. A notably higher share of enterprises reported having had innovation or innovation activities in the 2011-2013 survey than has been reported in previous combined surveys. Overall the incidence of product and/or process innovation activity increases by more than 15 percentage points while several key indicators rice by 50 per cent or more.

This applies for all types of innovation: product innovation, both for goods and in particular services, for process innovation, as well as for organisational and marketing innovations. The results remain consistent also when they are broken down further by detailed industries and when broken down by main industry and enterprise size. Non-R&D innovation expenditure and the share of innovators cooperating on product and process innovation activities are also much higher than in previous surveys.

As a consequence of these findings, the Norwegian innovation survey will be carried out separate from the R&D survey starting with CIS 2014.