A Multi-Criteria Reference Point Based Approach for Assessing Regional Innovation Performance in Spain

Abstract

The evaluation of regional innovation performance through composite innovation indices can serve as a valuable tool for policy-making. While discussion on the best methodology to construct composite innovation indices continues, we are interested in deepening the use of reference levels and the aggregation issue. So far, additive aggregation methods are, largely, the most widespread aggregation rule, thus allowing for full compensability among single indicators. In this paper, we present an integrated assessment methodology to evaluate regional innovation performance using the Multi-Reference Point based Weak and Strong Composite Indicator (MRP-WSCI) approach, which allows defining reference levels and different degrees of compensability. As an example of application to the Regional Innovation Scoreboard, the proposed technique is developed to measure the innovation performance of Spain’s regions taking into account Spanish and European reference levels. The main features of the proposed approach are: (i) absolute or relative reference levels could be previously defined by the decision maker; (ii) by establishing the reference levels, the resulting composite innovation index is an easy-to-interpret measure; and (iii) the non-compensatory strong composite indicator provides an additional layer of information for policy-making (iv) a visualization tool called Light-Diagram is proposed to track the specific strengths and weaknesses of the regions’ innovation performance.