Does research pay? An analysis of R&D expenditure and economic performance in small and medium sized enterprises

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Chapter 2.2 Methods to measure efficiency of innovation and R&D expenditure:
The following paragraph deals with the measurement of the benefit of innovation and lists the different calculation methods. According to Schmeisser, there is a gap in scientific knowledge related to calculation methods to determine the success of innovation. The practical statistics about the success of inventions (ideas) show the importance of measuring their sense and prosperity. An interdisciplinary, empirical, and long-term study into the ideas of 116 companies reveals that only 11 out of 1.919 are actually successful. Fewer than 10% of the ideas have entered the market. The market disclosed 70% of them as unsuccessful. From the remaining products, 46% were sold with deficit, 33% did not bring significant profit, and only 21% were finally successful and soled with profit. There are different dimensions to the success of an idea or innovation. One can refer to the success of a project in relation to an innovation, or the total project portfolio of several innovation projects, or even on company level. As the given data set provides figures mirroring the overall performance of the companies and their related R&D spending, for this study a literature review of measurement methods for success at the company level was performed.
According to Schmeisser, the contemplation at the company level by using performance indicators like turnover, growth in turnover and revenue is difficult due to two reasons. Firstly, the success of a company is influenced by several other internal (degree of dynamic capability, innovation, ect.), and external (micro- and macro- environmental) factors. Therefore, there is no causal relationship between a successful innovation management and the success of a company. The second weak point of this approach is that the actual numbers for turnover, revenue, or income returns are based on the innovations or achievements of the past, which,

Axel Jörn, B. Eng., was born in 1982 in Güstrow. After his apprenticeship to a "System Mechanic" in a small handcraft firm he became further qualified to a "State Certified Technical Engineer - Machine Construction". From 2006 to 2015 he made practical engineering and project management experience in the aviation industry at Airbus in Hamburg. From 2009 to 2013 he studied beside his full time job to become a "Bachelor of Engineering -Mechatronic-" and he made his "Project Management Professional (PMP)" certification at the Project Management Institute (PMI) in 2014. From 2014 to 2016 Jörn got through a "Master of Business Administration (MBA) Program" at the FOM Hochschule für Ökonomie & Management in Hamburg. In the year 2015 he changed from Airbus to Siemens and became project manager for the building automatisation in the wind energy sector.