Improving Measures of Science,
Technology, and Innovation:
Interim Report


Panel on Developing Science, Technology, and Innovation
Indicators for the Future

Robert E. Litan, Andrew W. Wyckoff. and Kaye Husbands Fealing,
Editors

Committee on National Statistics
Division of Behavioral and Social Sciences and Education

Board on Science. Technology, and Economic Affairs
Division of Policy and Global Affairs


NATIONAL RESEARCH COUNCIL
            OF THE NATIONAL ACADEMIES


THE NATIONAL ACADEMIES PRESS
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Improving Measures of Science, Technology, and Innovation: Interim Report Panel on Developing Science, Technology, and Innovation Indicators for the Future Robert E. Litan, Andrew W. Wyckoff, and Kaye Husbands Fealing, Editors Committee on National Statistics Division of Behavioral and Social Sciences and Education Board on Science, Technology, and Economic Affairs Division of Policy and Global Affairs

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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, NW Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. The project that is the subject of this report was supported by grant no. SES-0453930 between the National Science Foundation and the National Academy of Sciences. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. International Standard Book Number-13: 978-0-309-25389-5 International Standard Book Number-10: 0-309-25389-6 Additional copies of this report are available from the National Academies Press, 500 Fifth Street, NW, Washington, DC 20001; (202) 334-3096; Internet, http://www.nap.edu. Copyright 2012 by the National Academy of Sciences. All rights reserved. Printed in the United States of America Suggested citation: National Research Council. (2012). Improving Measures of Science, Technology, and Innovation: Interim Report. Panel on Developing Science, Technology, and Innovation Indicators for the Future, R.E. Litan, A.W. Wyckoff, and K.H. Fealing, Editors. Committee on National Statistics, Division of Behavioral and Social Sciences and Education, and Board on Science, Technology, and Economic Policy, Division of Policy and Global Affairs. Washington, DC: The National Academies Press.

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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Panel on Developing Science, Technology, and Innovation Indicators for the Future ROBERT E. LITAN (Cochair), The Ewing Marion Kauffman Foundation, Kansas City, MO ANDREW W. WYCKOFF (Cochair), Organisation for Economic Co-operation and Development, Paris, France CARTER BLOCH, Danish Center for Studies in Research and Research Policy, University of Aarhus, Denmark NICHOLAS R. CHRISMAN, Department of Geomatics Sciences, Université Laval, Québec, Canada CARL J. DAHLMAN, Edmund A. Walsh School of Foreign Service, Georgetown University GEOFF M. DAVIS, User Experience Group, Google, Inc., Mountain View, CA KATHARINE G. FRASE, Industry Solutions and Emerging Business, IBM Research, Yorktown Heights, NY BARBARA M. FRAUMENI, Muskie School of Public Service, University of Southern Maine RICHARD B. FREEMAN, Department of Economics, Harvard University FREDERICK D. GAULT, Economic and Social Research and Training Centre on Innovation and Technology, United Nations University, Maastricht, The Netherlands DAVID GOLDSTON, Natural Resource Defense Council, Washington, DC MICHAEL MANDEL, The Wharton School, University of Pennsylvania JOHN E. ROLPH, Marshall School of Business, University of Southern California LELAND WILKINSON, SYSTAT Software, Inc., Chicago, IL KAYE HUSBANDS FEALING, Study Director ANTHONY S. MANN, Program Associate v

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Committee on National Statistics 2011-2012 LAWRENCE D. BROWN (Chair), Department of Statistics, The Wharton School, University of Pennsylvania JOHN M. ABOWD, School of Industrial and Labor Relations, Cornell University ALICIA CARRIQUIRY, Department of Statistics, Iowa State University WILLIAM DUMOUCHEL, Oracle Health Sciences, Waltham, Massachusetts V. JOSEPH HOTZ, Department of Economics, Duke University MICHAEL HOUT, Department of Sociology, University of California, Berkeley KAREN KAFADAR, Department of Statistics, Indiana University SALLIE KELLER, IDA Science and Technology Policy Institute, Washington, DC LISA LYNCH, The Heller School for Social Policy and Management, Brandeis University SALLIE C. MORTON, Department of Biostatistics, University of Pittsburgh JOSEPH NEWHOUSE, Division of Health Policy Research and Education, Harvard University RUTH D. PETERSON, Department of Sociology and Criminal Justice Research Center, Ohio State University HAL STERN, School of Information and Computer Sciences, University of California, Irvine JOHN H. THOMPSON, National Opinion Research Center at the University of Chicago ROGER TOURANGEAU, Westat, Rockville, Maryland ALAN ZASLAVSKY, Department of Health Care Policy, Harvard Medical School CONSTANCE F. CITRO, Director vi

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Board on Science, Technology, and Economic Policy PAUL L. JOSKOW (Chair), President, Alfred P. Sloan Foundation, New York, NY ERNEST R. BERNDT, Sloan School of Management, Massachusetts Institute of Technology JOHN DONOVAN, Chief Technology Officer, AT&T Labs, Dallas, TX MARY L. GOOD, Donaghey College of Information Science and Systems Engineering, University of Arkansas at Little Rock RICHARD K. LESTER, Department of Nuclear Science and Engineering, Massachusetts Institute of Technology WILLIAM F. MEEHAN, Stanford Graduate School of Business, Stanford University DAVID T. MORGENTHALER, Founding Partner, Morgenthaler Ventures, Cleveland, OH ARATI PRABHAKAR, U.S. Venture Partners, Menlo Park, CA WILLIAM J. RADUCHEL, Opera Software ASA, Great Falls, VA KATHRYN L. SHAW, Stanford Graduate School of Business, Stanford University LAURA D’ANDREA TYSON, Haas School of Business, University of California, Berkeley HAROLD R. VARIAN, Chief Economist, Google, Inc., Mountain View, CA ALAN WM. WOLFF, Dewey & LeBoeuf, LLP, Washington, DC RALPH J. CICERONE, Ex Officio, President, National Academy of Sciences, Washington, DC HARVEY V. FINEBERG, Ex Officio, President, Institute of Medicine, Washington, DC CHARLES M. VEST, Ex Officio, President, National Academy of Engineering, Washington, DC STEPHEN A. MERRILL, Executive Director vii

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Contents Preface xi Acronyms and Abbreviations xv Executive Summary 1 1 Introduction 4 2 Concepts and Uses of Indicators 11 3 Measuring Human Capital 15 4 Measuring Innovation 20 5 Measuring Research and Development Services 27 6 Developing Subnational Datasets and Indicators 31 7 Improving Data Collection and Dissemination 35 8 Conclusion 45 References 46 Appendix A: Panel Workshop Agenda and Participants 50 Appendix B: Biographical Sketches of Panel Members and Staff 58 ix

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Preface Given the study’s broad disciplinary scope, our panel of experts collectively represent more than a dozen fields, including computer science, economics, education, engineering, finance, geography, mathematics, physics, political science, psychology, statistics, and visual analytics. The panel also reflects the international nature of the topic, with members from Canada, Denmark, France, and the Netherlands. One of our panel members is an expert on science, technology, and innovation (STI) policies in Russia, Asia, Latin America, and the Caribbean, and another was instrumental in developing the first set of innovation indicators for African countries. It is with extreme gratitude that the panel thanks the many people who made contributions to this study. The staff at the National Center for Science and Engineering Statistics (NCSES) at the National Science Foundation, under the directorship of Lynda Carlson, gracefully gave us terrific input and insights, including clear directives on what they wanted to learn from the study, as well as useful sources of information from their division and from other sources. Robert Bell, Lawrence Burton, John Gawalt, John Jankowski, Nirmala Kannankutty, Beethika Khan, Rolf Lehming, Francisco Moris, Jeri Mulrow, Christopher Pece, and Emilda Rivers all contributed their knowledge and expertise to answering our questions. The panel’s work benefited greatly from presenters and attendees at our open meetings. The insights of the following individuals were critical for the framing of policy issues that are relevant for our study: Jeff Alexander (SRI International); Patrick Clemins (American Association for the Advancement of Science); Mark Doms (U.S. Department of Commerce); Kei Koizumi (U.S. Office of Science and Technology Policy); Christine Matthews (Congressional Research Service); Dahlia Sokolov (U.S. House of Representatives); and D. Greg Tassey (National Institute of Standards and Technology). Conceptual frameworks for STI indicators were presented by Michelle Alexopoulos (University of Toronto) and Adam Jaffe (Brandeis University). Opportunities for advances in STI data collections and statistics, particularly among U.S. federal agencies, were presented to panel members by B.K. Atrostic, Cheryl Grim, Richard Hough, Dave Kinyon, Erika McEntarfer, and Mary Potter (U.S. Census Bureau); Ana Aizcorbe, Maria Borga and Carol Robbins (Bureau of Economic Analysis); Laurie Salmon, Jim Spletzer and David Talan (Bureau of Labor Statistics); David McGranahan and Tim Wojan (U.S. Department of Agriculture); and Daniel McGrath, Jessica Shedd, Matthew Soldner, and Tom Weko (National Center for Education Statistics). We also thank Rochelle (Shelly) Martinez and her colleagues, and Katherine Wallman at the Office of Management and Budget for an engaging discussion regarding synergies in the federal statistical system regarding measures of STI activities. Since international comparability is an important aspect of this study, the panel convened a workshop of international researchers and practitioners in July 2011. The following individuals presented dozens of STI measures and described opportunities and obstacles that NCSES should anticipate as they further develop its STI indicators program: Shinichi Akaike (Hitotsubashi xi

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University); Howard Alper (Canada’s Science Technology and Innovation Council); Jayanta Chatterjee (Indian Institute of Technology); Gustavo Crespi (Inter-American Development Bank); Matthieu Delescluse (European Commission); Changlin Gao (Chinese Academy of Science and Technology); Jonathan Haskel (Imperial College Business School); Hugo Hollanders (United Nations University-Maastricht Economic and Social Research Institute on Innovation and Technology); Brian MacAulay (National Endowment for Science, Technology and the Arts); and Philippe Mawoko (The New Partnership for Africa’s Development). The panel is exploring the use of microdata, particularly administrative records and web tools, to create STI statistics. We heard from several experts in this diverse field of study at the July 2011 workshop, including Carl Bergstrom (University of Washington); Stefano Bertuzzi (National Institutes of Health and the STAR METRICS program); Erik Brynjolfsson (Massachusetts Institute of Technology); Lee Giles (Penn State University); John Haltiwanger (University of Maryland); Richard Price (Academia.edu); and Alicia Robb (Kauffman Foundation). Developing STI indicators at subnational levels is also an important part of this study. At the July 2011 workshop, Rob Atkinson (Information Technology and Innovation Foundation), Maryann Feldman (University of North Carolina), Andrew Reamer (George Washington University), and Robert Samors and David Winwood (Association of Public and Land-grant Universities) presented options for measuring STI activities at a variety of geographic scales. Nicholas Donofrio (IBM) participated in a roundtable discussion with panel members during the workshop. We greatly appreciate his insights from a business perspective on measuring research and development and innovation. His comments reminded us that the role of multinationals in the global STI system should be examined carefully and that entrepreneurial activities at firms of various sizes deserve careful measure. The panel also obtained input from several other science and technology policy experts, including Aaron Chatterji (Duke University, formerly of the Council of Economic Advisers), Bhavya Lal and Stephanie Shipp (Institute for Defense Analysis-Science and Technology Policy Institute), and Alessandra Colecchia, Gili Greenberg and Fernando Galindo-Rueda (Organisation for Economic Co-operation and Development). We extend a special thanks to Committee on National Statistics staff. The study director, Kaye Husbands Fealing, provided valuable assistance to the panel in organizing the meetings and preparing this report. Connie Citro, Tom Plewes, and Michael Cohen gave excellent guidance to the panel and study director and helped facilitate some of the meetings. Stephen Merrill from the Board of Science, Technology, and Economic Policy also participated in the meetings. We thank Anthony Mann for outstanding administrative and logistical support to the panel. We also thank our Mirzayan fellow Daniel Grady, whose expertise in systems dynamics and web tools contributed greatly to the panel’s work. This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s RRC. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: Michael Conlon, Director of Biomedical Informatics and Assistant Director/CEO, Clinical and Translational Science Institute, University of Florida; xii

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Martin Fleming, Chief Economist and Vice President, Business Performance Services, International Business Machines Corporation; Susan Hanson, Distinguished University Professor Emerita, School of Geography, Clark University; Joshua Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School; William D. Nordhaus, Department of Economics, Yale University; Hal Salzman, Bloustein School of Planning and Public Policy and Heldrich Center for Workforce Development, Rutgers University; Albert H. Teich, Director, Science and Policy Programs, American Association for the Advancement of Science; and Ward Ziarko, Head of Unit of R&D Indicators, Belgian Federal Science Policy. Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by Lawrence D. Brown, Department of Statistics, The Wharton School, University of Pennsylvania. Appointed by the National Research Council, he was responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution. Robert E. Litan and Andrew W. Wyckoff, Cochairs Panel on Developing Science, Technology, and Innovation Indicators for the Future xiii

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Acronyms and Abbreviations AAAS American Association for the Advancement of Science America COMPETES America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science APLU Association of Public and Land Grant Universities BEA Bureau of Economic Analysis, U.S. Department of Commerce BLS Bureau of Labor Statistics, U.S. Department of Labor BOP balance of payments BRDIS Business Research and Development and Innovation Survey CICEP Commission on Innovation, Competitiveness, and Economic Prosperity CIS Community Innovation Survey COSSA Consortium of Social Science Associations CRS Congressional Research Service ERS Economic Research Service, U.S. Department of Agriculture ETA Employment and Training Administration, U.S. Department of Labor EU European Union FTE full-time equivalent GDP gross domestic product ICT information and communications technology IMF International Monetary Fund IRS Internal Revenue Service, U.S. Department of the Treasury MIST Microbusiness, Innovation Science, and Technology NAICS North American Industrial Classification System NASSCOM National Association of Software and Services Companies NCES National Center for Education Statistics, U.S. Department of Education NCSES National Center for Science and Engineering Statistics, U.S. National Science Foundation NEPAD New Partnership for Africa’s Development NESTA National Endowment for Science, Technology, and the Arts NESTI National Experts on Science and Technology Indicators NIH National Institutes of Health, U.S. Department of Health and Human Services NIST National Institute of Standards and Technology, U.S. Department of Commerce NLM National Library of Medicine, U.S. Department of Health and Human Services NORC National Opinion Research Center NSCG National Survey of College Graduates NSF U.S. National Science Foundation NSRCG National Survey of Recent College Graduates xv

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OECD Organisation for Economic Co-operation and Development OMB U.S. Office of Management and Budget OSTP U.S. Office of Science and Technology Policy PISA Programme for International Student Assessment R&D research and development S&E science and engineering S&T science and technology SDR Survey of Doctorate Recipients SED Survey of Earned Doctorates SESTAT Science and Engineering Statistical Data System STAR METRICS Science and Technology for America’s Reinvestment: Measuring the EffecT of Research on Innovation, Competitiveness and Science STEM science, technology, engineering, and mathematics STI science, technology, and innovation UNU-MERIT U.N. University’s Maastricht Economic and Social Research Institute on Innovation and Technology USDA U.S. Department of Agriculture xvi