DEFINITIONS

Innovation – the market introduction of a new or a significantly improved product (goods/service) by enterprise, the implementation of new or significantly improved production process (incl. distribution method, etc.) within enterprise, as well as significant changes in organisation or marketing.

Innovation activity the acquisition of machinery, equipment, software, and licenses; engineering and development work, training, marketing and any research and development activities when they are specifically undertaken to develop and/or implement a product or process innovation.

Innovative enterprise enterprise that has introduced during years under consideration a product, process, organisational or marketing innovation, or has been involved in innovation activities. The definition differs from earlier used one where innovativeness was treated narrower as only technological innovativity.

Marketing innovation significant change in sales or distribution methods of enterprise’s goods or services, including changes in design and packaging.

Marketing innovations do not include:

- routine or seasonal changes (as clothing fashion);

- advertising except for first-time use of new media.

Non-technological innovation – organisational or marketing innovation.

Organisational innovation – significant change in the enterprise’s business practice, workplace organisation or external relations with other enterprises/organisations intended to increase the capability to innovate or the enterprise’s performance (quality, efficiency, etc.) Organisational innovation is usually understood in a broader sense than for instance just the restructuring of a certain part of supply chain.

Organisational innovations do not include:

- changes in management strategy that do not involve the changes in organisational structure;

- implementation of new technology in a certain unit (for instance the producing unit), it is rather connected to process innovation.

Process innovation process innovations appear in industry as well as in services in the form of new or significantly improved production process, distribution method or ancillary support activity. Process innovation includes changes in techniques, equipment and/or software implemented with the intention to improve the quality of products, to decrease the unit costs of production or delivery, to reduce the environmental impact or improve safety.

Process innovation does not include:

- insignificant changes or improvements;

- rise in productivity due to the addition of the equipment or logistic system already implemented;

- innovations, the major part of which is the new kind of relation with the customer – those belong to product innovation.

Product innovation goods or service that differs significantly from products previously produced by enterprise with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics. The product innovations are directly sold to consumer differing in that way from process innovations.

The product innovations do not include:

- insignificant changes or improvements;

- routine category changes;

- seasonal changes (for instance clothing fashion);

- customization of product to the needs of a single customer that does not involve significant changes in comparison to products offered to other customers;

- changes in design not accompanied with changes in technical specifications or functional characteristics (those belong to marketing innovation).

- renaming or new packaging of products for a new market;

- trading of new goods or services acquired from other enterprises for reselling purposes except for the case when those goods or services are developed and produced by a foreign subsidiary.

Technological innovation – product or process innovation.

Technologically innovative enterprise enterprise that introduced during years under consideration a product innovation to market or implemented a process innovation or was involved some other innovation activity (in connection with abandoned or ongoing innovation projects, as well as the research and development can be the main activity of an enterprise or its part).

METHODOLOGY

The statistical survey “Innovation Survey of Enterprises” for the years 2008–2010 is the implementation of European Community survey (Community Innovation Survey – CIS) in Estonia. The survey is carried out in all European Union Member and candidate States simultaneously. The frame of the survey covered all enterprises with at least 10 persons employed in industry (excl. construction) and selected economic activities in services (see the list of activities under Classifications). The Survey was total for enterprises with at least 50 persons employed, and in the case of enterprises with less than 50 persons employed the random stratified sampling was applied if a stratum consisted of more than 30 enterprises. As a result of the use of weighted sums, the indicators – number of enterprises — are presented in database as fractional numbers.

To evaluate the enterprise’s innovativity it was asked about its activities during a three-year – 2008–2010 – period. If an enterprise did not introduce during this period innovations or did not have any innovative activities, it was considered non-innovative. New enterprises born in 2008 or later could be non-innovative only if they were established on the basis of enterprise existing earlier or were part of such enterprise and this process did not involve any innovative activities. For a totally new enterprise its products and processes are always innovations.

The methodology of innovation statistics is based on the OECD manual “Proposed Guidelines for Collecting and Interpreting Innovation Data. Oslo Manual“. The last but one version of the manual was published in 1992 and the last one in 2005. CIS 2008 and CIS 2010 followed the 2005 version. As a result, the comparison of fresh data with earlier collected ones must be done keeping carefully eye on definitions. In earlier surveys the innovativity was limited to technological one, in later surveys it also includes the non-technological one.

CLASSIFICATIONS

Surveyed economic activities as described in EMTAK 2008 – Estonian Classification of Economic Activities based on NACE Rev.2

05

Mining of coal and lignite

06

Extraction of crude petroleum and natural gas

07

Mining of metal ores

08

Other mining and quarrying

09

Mining support service activities

10

Manufacture of food products

11

Manufacture of beverages

12

Manufacture of tobacco products

13

Manufacture of textiles

14

Manufacture of wearing apparel

15

Manufacture of leather and related products

16

Manufacture of wood and wood products and plaits, except furniture

17

Manufacture of paper and paper products

18

Printing and reproduction of recorded media

19

Manufacture of coke and refined petroleum products

20

Manufacture of chemicals and chemical products

21

Manufacture of basic pharmaceutical products and pharmaceutical preparations

22

Manufacture of rubber and plastic products

23

Manufacture of other non-metallic mineral products

24

Manufacture of basic metals

25

Manufacture of fabricated metal products, except machinery and equipment

26

Manufacture of computer, electronic and optical products

27

Manufacture of electrical equipment

28

Manufacture of machinery and equipment n.e.c.

29

Manufacture of motor vehicles, trailers and semi-trailers

30

Manufacture of other transport equipment

31

Manufacture of furniture

32

Other manufacturing

33

Repair and installation of machinery and equipment

35

Electricity, gas, steam and air conditioning supply

36

Water collection, treatment and supply

37

Sewerage

38

Waste collection, treatment and disposal activities; materials recovery

39

Remediation activities and other waste management services

46

Wholesale trade, except of motor vehicles and motorcycles

49

Land transport and transport via pipelines

50

Water transport

51

Air transport

52

Warehousing and support activities for transportation

53

Postal and courier activities

58

Publishing activities

61

Telecommunications

62

Computer programming, consultancy and related activities

63

Information service activities

64

Financial service activities, except insurance and pension funding

65

Insurance, reinsurance and pension funding, except compulsory social security

66

Activities auxiliary to financial services and insurance activities

71

Architectural and engineering activities; technical testing and analysis

 

Used activity groups:

 

Surveyed economic activities total

5–39

Industry (excl construction)

5–9

Mining and quarrying

10–33

Manufacturing

10–12

manufacture of food products, beverages and tobacco

13–15

manufacture of textiles, wearing apparel, leather and related products

16–18

manufacture of wood, paper, printing and reproduction

19–22

manufacture of petroleum, chemical, pharmaceutical, rubber and plastic products

24–25

manufacture of basic metals and fabricated metal products, except machinery and equipment

26–30

manufacture of computer, electronic and optical products, electrical equipment, motor vehicles and other transport equipment

31–33

manufacture of furniture and other manufacturing, repair and installation of machinery and equipment

36–39

water supply, sewerage, waste management and remediation activities

 

Services (activities covered with survey)

49–53

..transportation and storage

49–51

land transport and transport via pipelines, water transport and air transport

52–53

warehousing and support activities for transportation and postal and courier activities

58–63

..information and communication

58, 62–63

publishing, computer programming and consultancy, information service activities

64–66

financial and insurance activities

MORE DATA

Innovation in Estonian Enterprises 1998–2000. Foundation Enterprise Estonia, 2002

http://www.eti.ee/user_upload/innovation_in_estonian_enterprises.pdf.

Innovation in Estonian Enterprises. Foundation Enterprise Estonia, 2007

http://www.digar.ee/arhiiv/et/raamatud/4932.

Heinlo, A. (2008). Innovaatilisus jätkuvalt heal tasemel. Teadus- ja arendustegevus 2006. Innovativeness continuously measures up. Research and development 2006

Heinlo, A. (2009). Innovation scoreboard: Estonia’s advantages and shortcomings. – Quarterly Bulletin of Statistics Estonia. No 1, pp 32–57.

Heinlo, A. (2010). Innovativeness under magnifier. – Quarterly Bulletin of Statistics Estonia. No 3, pp 53–73.

CONTACT PERSON

Tiina Pärson

Enterprise and Agricultural Statistics Department

Tel +372 625 9233

tiina.parson@stat.ee

Updated: 17.09.2015