Concepts and definitions

Innovation

An innovation is a new or significantly improved product (goods or services) brought to market by an enterprise or a new or significantly improved process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations implemented by an enterprise.

Innovation (product, process, marketing method or organisational method) must be new to the enterprise in question. The developer of the innovation can be the enterprise in question or other enterprises or organisations.

Innovation activity

Innovation activity is understood to mean all operations that produce, or whose purpose is to produce, new or improved products and processes.

Innovation activity, broad definition

Innovation activities mean all operations and steps which lead, or are intended to lead, to the implementation of innovations.

Innovation expenditure

Innovation expenditure includes the following items of both current expenditure and investment.

Research and development is understood as systematic work to increase knowledge and use of existing knowledge to develop new applications. Prototype development is often a key element of R&D activity. Software development is classified as R&D whenever the purpose is to make an advance in software technology or when the software is an integral part of an R&D project. R&D is carried out both by an enterprise's own staff and through outsourced R&D projects.

Acquisition of machinery and equipment for innovation. Purchases that are either required to make new products or that are process innovations owing to their technological characteristics. This also includes directly relevant software programs.

Acquisition of technological knowledge for innovation. This includes patents, inventions, licences, trade marks, designs, consultancy services (excluding R&D), other know-how and software not classified elsewhere.

Tooling up the production process required for innovation, and industrial design. Plans and drawings intended to define procedures, technical specifications and operational features required for making new products and implementing new process innovations. Also changes required in production, quality control, standards and software. This also includes product or process modifications and post-R&D trial production required for production start-up.

Arrangements for introducing new services, production and distribution. Measures designed to define procedures, specifications and practical features required to produce innovations.

Training and skills acquisition for innovation. Training and other skills taught to staff directly involved in producing innovation. Both in-house and outsourced training services.

Launch of new products. This includes preliminary market research, market tests and launch advertising, but excludes the development of distribution networks.

Innovation-active enterprise

An innovation-active enterprise is an enterprise that during last three years has brought a product innovation to market or started using a new production method, or which has been working towards achieving this.

Innovation-active enterprise, broad definition

An innovation-active enterprise is one that during the period under review, i.e. during the last three years, has brought a product innovation to market or implemented a process innovation or which has been working towards achieving these, or which has implemented organisational or marketing innovations.

Marketing innovation

A marketing innovation is the implementation of a new marketing method (marketing idea or strategy) that differs significantly from the previous marketing method used by the enterprise and that has not been previously used by the enterprise. A requirement for a marketing innovation is that it involves significant changes in the product design or packaging, product placement, product promotion or pricing.

Seasonal, regular and other routine changes in marketing methods are not considered marketing innovations.

Organisational innovation

An organisational innovation is the implementation of a new organisational method in an enterprise's business practices (including knowledge management), workplace organisation or external relations that has not been previously used by the enterprise. It must be the result of strategic decisions made by the management.

Mergers with, or acquisitions of, enterprises are not organisational innovations, even if these are new to the enterprise.

Process innovation

A process innovation is the implementation of a new or significantly improved production process, delivery method, or support activity for an enterprise's goods or services.

The process (production process, delivery method or support activity) must be new to the enterprise or significantly improved from its point of view, but it does not have to be new to the sector or market the enterprise operates in. The developer of the innovation can be the enterprise in question or other enterprises.

Purely organisational innovations are not considered process innovations.

Product innovation

A product innovation refers to a new or essentially improved good or service brought to market by an enterprise. A new or significantly improved good or service differs from previously produced goods or services with respect to its characteristics (e.g. significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics).

The good or service must be new to the enterprise or significantly improved from its point of view, but it does not have to be new to the market the enterprise operates in. The developer of the innovation can be the enterprise in question or other enterprises.

Referencing instructions:

Official Statistics of Finland (OSF): Innovation [e-publication].
ISSN=1797-4399. Helsinki: Statistics Finland [referred: 22.2.2019].
Access method: http://www.stat.fi/til/inn/kas_en.html