Efficiency and Innovation
metrics focus on revenue, profit, market share,
EVANGELIA PAPPA
Panteion University of Social and Political
Sciences, Greece
A crucial point of economic analysis at interna-
tional, national, and regional level has been the
examination of factors that enhance firms’ com-
petitiveness, regardless of the sector they operate
in. Competitiveness is reflected in a firm’s abil-
ity to secure, maintain, and increase its shares in
both domestic and international commodity mar-
kets. In the knowledge economy, competition is
not based on low cost and price, but on the cre-
ation of new ideas, the diffusion of technological
and scientific knowledge, qualified staff, and the
application of innovation.
Therefore, growth and competitiveness remain
the leading goals of entrepreneurial strategy, but
what has changed are the factors that lead to
them. Among these factors, the most important
is innovation. Schumpeter (1934) defined it as
the introduction into the market of a new or
enhanced good, the utilization of a new produc-
tion process, access to new supplies of inputs,
the opening up of a new market, and, finally, the
realization of new organizational forms.
One of the major challenges is the appropriate
measurement of innovation performance (Bititci
et al., 2012). Preferred types of innovation per-
formance metrics can be identified: those that
focus on inputs, process, outputs, or outcomes
(Saunila, 2017; Manoochehri, 2010). Inputs (tan-
gibles and intangibles) metrics include mainly the
allocation of financial resources and assignment
of key people. Process metrics include time,
cost, and quality. Outputs are the direct results
The Blackwell Encyclopedia of Sociology. Edited by George Ritzer and Chris Rojek.
© 2019 John Wiley & Sons, Ltd. Published 2019 by John Wiley & Sons, Ltd.
DOI: 10.1002/9781405165518.wbeose101.pub2
of innovation activities and, lastly, outcome
and customer satisfaction (Janger et al., 2016).
Of course, there is no standard set of indicators,
and their successful application depends on the
nature of the industry, a firm’s goal and strategies
(Manoochehri, 2010), the innovation challenge
(degree of innovation), and corporate culture
(Erkens et al., 2014).
SEE ALSO: Innovation; Technological Innova-
tion
References
Bititci, U., Garengo, P., Dörfler, V., and Nuduru-
pati, S. (2012) Performance measurement: challenges
for tomorrow. International Journal of Management
Reviews, 14 (3), 305–327.
Erkens, M., Wosch, S., Luttgens, D., and Piller, F.
(2014) Measuring open innovation: a metrics based
management toolkit for successful innovation
teams. Available at https://innovationmanagement.
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metrics-based-management-toolkit-for-successful-
innovation-teams-part-2/ (accessed June 26,
2019).
Janger, J., Schuberte, T., Andries, P., et al. (2016) The
EU 2020 innovation indicator: a step forward in mea-
suring innovation outputs and outcomes? Discussion
paper no. 16-072, Leibniz Centre for European Eco-
nomic Research.
Manoochehri, G. (2010) Measuring innovation: chal-
lenges and best practices. California Journal of Oper-
ations Management, 8 (1), 67–73.
Saunila, M. (2017) Understanding innovation perfor-
mance measurement in SMEs. Measuring Business
Excellence, 21 (1), 1–16.
Schumpeter, J. (1934) The Theory of Economic Develop-
ment, Harvard University Press, Cambridge, MA.