A simple index of innovation with complexity

Patents are the main source of data on innovation. Since most of the innovative activity happens outside of the patenting system, and since patents −and innovationshave different quality, complexity, and impact on each market, unweighted sums of patents and proxies are an imperfect indicator of a country’s innovative activity. I generate two very simple indices of innovation (one dependent on the size of a country, and another that normalizes country-size), based on weighting patents and exports by a complexity measure. Each index captures the technological complexity of innovations inside and outside the intellectual property rights system. I empirically analyze the rankings of these innovation indices, and contrast the results with technological development, GDP, and the existing mainstream innovation index. © 2016 Elsevier Ltd. All rights reserved.