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Five types of innovation in Canadian manufacturing: First results from the Survey of Innovation 2005
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by Frances Anderson, SIEID, Statistics Canada
The most recent Statistics Canada Survey of Innovation (2005) distinguished five types of innovation. The questions on types of innovation were redesigned in response to the 1997 revision of the Oslo Manual, which incorporated new insights on innovation in the service industries, and broadened the concept of process innovation to include not only production processes but also methods of product delivery. This article examines the five different types of innovation in Canadian manufacturing establishments and industry groups.
About this article
Background
Findings
Summary
References
About the author
About this article
The 2005 Survey of Innovation surveys manufacturing and logging industries for the reference period 2002 to 2004. The statistical unit of observation is the establishment. Innovative establishments are those that indicated in the Survey of Innovation that they introduced a new or significantly improved product or process during the reference period.
More information about the Survey of Innovation is available here.
Background
The Oslo Manual, first published in 1992 by the OECD, provides international guidelines for the collection and interpretation of innovation data. As a better understanding of the innovative process was achieved, and as innovation survey results were analyzed, two important revisions to the Oslo Manual were implemented; the first in 1997 and the most recent in 2005.
The questions asked of firms about the types of innovation have changed over time, both in Statistics Canada innovation surveys, as well as in the European Community Innovation Surveys (CIS), which also adopt the Oslo Manual guidelines. In Statistics Canada's 1999 Survey of Innovation, which surveyed manufacturing and logging firms, two types of innovation were distinguished: 1. new or significantly improved products, and 2. new or significantly improved production/manufacturing processes.
The most recent Statistics Canada Survey of Innovation (2005) distinguished five types of innovation. The questions on types of innovation were redesigned in response to the 1997 revision of the Oslo Manual, which incorporated new insights on innovation in the service industries, and broadened the concept of process innovation to include not only production processes but also methods of product delivery. Questions about types of innovation will, in the future, undergo further modification as a result of the 2005 revision to the Oslo Manual, which recognized two new categories of innovation: organizational and marketing.
Findings
Five types of innovation
Statistics Canada's Survey of Innovation 2005 asked establishments to identify which of five different types of innovation were introduced during the period 2002 to 2004. The innovations must have been new to the establishment and, in the case of product innovations, the simple resale of new goods purchased from other plants and changes of a solely aesthetic nature were excluded. The five types of innovation are:
Product Innovation
- Introduced a new or significantly improved good
- Introduced a new or significantly improved service
Process Innovation
- Introduced a new or significantly improved method of manufacturing or producing goods or services
- Introduced new or significantly improved logistics, delivery or distribution methods for inputs, goods or services
- Introduced new or significantly improved supporting activities for processes, such as maintenance systems or operations for purchasing, accounting, or computing
The Survey of Innovation 2005 found that two-thirds (65%) of manufacturing establishments were innovative, while approximately one-half of all establishments indicated that they introduced a new or significantly improved product innovation and one-half indicated that they introduced a new or significantly improved process innovation (Chart 1).
Chart 1
Percentage of innovators in Canadian manufacturing establishments, 2002 to 2004
In terms of the different types of innovation introduced, the highest percentage of establishments indicated the introduction of a new or significantly improved good or a new or significantly improved manufacturing/production method—slightly more than 40% of establishments in both cases (Chart 2).
It is interesting to note that one-third of establishments indicated that they introduced organizational innovation as it related to the support activities for processes, and one in five introduced new or significantly improved services. New or significantly improved logistics, delivery and distribution methods were introduced by 16% of establishments.
Chart 2
Five types of innovation in Canadian manufacturing establishments, 2002 to 2004
Does industry matter?
The percentage of establishments introducing different types of innovation did vary by industry group1. Table 1 shows that the computer and electronic products industry group had the highest percentage of establishments introducing innovative goods. The printing industry group had the highest percentage of establishments introducing innovative services, as well as innovative methods of manufacturing or producing goods or services. For innovative logistics, delivery or distribution methods, the highest percentage of establishments was found in the textile mills and textile products industry group, and for innovative supporting activities for processes, it was the transportation equipment industry group with the highest percentage of establishments.
Table 1
Top three industry groups by type of innovation, based on percentage of establishments, 2002 to 2004
Industry group innovation strategies
It is interesting to note that the top three industry groups introducing new or significantly improved goods were completely different from the top three industry groups introducing improved methods of manufacturing or producing goods or services. It is also interesting to note that two industry groups which are usually not considered to be among the most innovative, had the highest percentage of establishments introducing new or significantly improved logistics, delivery or distribution methods for inputs, goods or services (textile mills and textile products), and the highest percentage of establishments introducing new or significantly improved supporting activities for processes, such as maintenance systems or operations for purchasing, accounting, or computing (transportation equipment manufacturers).
Summary
The revisions to the Oslo Manual have led to the ability to measure a broader range of innovation types than the more restrictive definition that existed in the first version of the Oslo Manual. In the coming years, one can expect to see more types of innovation being measured as new questions on organizational and marketing innovation are designed and incorporated into innovation surveys. The results of the top three users by type of innovation suggest that more analysis at the industry group level could shed light on the issue of innovation strategies for different industries.
References
OECD/Eurostat. 2005. Oslo Manual—guidelines for collecting and interpreting innovation data, 3rd edition. Paris, France.
About the author
Frances Anderson is with the Science, Innovation and Electronic Information Division (SIEID) at Statistics Canada. For more information about this article, please contact sieidinfo@statcan.gc.ca.
Note
- The industry groups that are compared reflect the 3-digit NAICS sub sectors with the exception of the following aggregated groups: 1. Food manufacturing (NAICS 311) is aggregated with Beverage and tobacco products (NAICS 312); 2. Textile mills (NAICS 313) is aggregated with Textile product mills (NAICS 314); and 3. Clothing manufacturers (NAICS 315) and Leather and allied product manufacturing (NAICS 316). A total of nineteen industry groups are compared.
