The Index of Innovation: A New Tool for Regional Analysis

Attempts to create an index of innovation have focused almost exclusively on countries or states. These existing indices also weigh various drivers of innovation equally without regard to their relative effect on economic development. This article has two distinct parts. In Part I the authors develop an index of innovation at the county level. They describe the rationale for selecting innovation measures based on the literature. This section goes into detail about measures and data. Part II statistically analyzes the data for all U.S. counties to assess the relative importance of the innovation factors on GDP-per-worker growth. The researchers also investigate whether the relative importance of the drivers of innovation differ depending on county scale and other characteristics that are often used to differentiate rural from urban. Initial analysis suggests that innovation influences can vary depending on the size of the county and the rural—urban divide.