Norwegian Innovation Index (NII): Customers' Voice on Innovation

Norwegian Innovation Index (NII): Customers' Voice on Innovation

The Norwegian Innovation Index (NII) is the world's first customer-based ranking of innovative businesses.

The Norwegian Innovation Index (NII) was established in 2016 by researchers from NHH (Norwegian School of Economics) and DIG (Digital Innovation for Sustainable Growth). This index is the world's first to evaluate innovative companies based on feedback from their customers. While traditional methods often rely on economic data and expert opinions to assess innovation, NII gives priority to what truly matters – customers' perceptions.

Rather than relying on numbers that impact the entire economy, NII focuses on what real customers think. This is crucial because customers are the ones who financially support businesses by purchasing their products and services. The research team at NHH has introduced a fresh approach to evaluating innovation. They not only consider what companies claim they are doing but also what customers believe about how businesses create value through innovation.

This approach is so unique that it has been adopted in several other countries including Finland, Sweden, Denmark, Belgium, Spain, Australia, and the USA. In each of these countries, a prominent business school and research team collaborate. They also work with consultancy firms to assist businesses in implementing the NII method. Together, we are known as The Innovation Index Coalition (IIC).

NII consists of three indexes: a commercial innovation index that examines innovations in what businesses offer in the market, a social innovation index that assesses sustainability and how businesses impact their communities (whether they are good neighbors), and a digital innovation index that looks at customer front-end automation. All of this is evaluated from the customers' perspective.

NII also addresses important topics such as innovation and sustainability, how businesses can adapt to an aging population, and the intelligent use of technology to better serve customers.

What makes NII particularly special is its spotlight on what customers think, feel, and experience about innovation, and how this influences their choices, thereby affecting the company's position, market appeal, and ultimately its value on the stock exchange or through acquisitions. The results of NII are presented on our website, and we also host an annual "Innovation 202x" conference where we discuss findings and honor the most innovative companies in these three areas.

NII provides us the opportunity to carefully analyze how customers in three different segments – young, middle-aged, and elderly – respond to the innovation of various companies, and also to examine entire industries. While countries themselves might not be innovative, individual companies can be. It's also important to remember that it's the customers who truly decide whether an innovation is successful or not.

Therefore, NII is a valuable way to measure innovation. It captures customers' perceptions of value creation, offering a much more comprehensive assessment of how Norwegian businesses engage in innovation.

It's important to note that while the quality of offered goods and services gets you into the market, innovations are what allow you to stay in the market. The interplay is depicted in the figure.

Source: Andreassen 2023 – Modern value creation
Source: Andreassen 2023 – Modern value creation

See Tor W. Andreassens keynote speech to the Finnish Innovation Index - FII (youtube)