Current Status: Measuring the Impact of Innovative Projects

Faced with constant pressure from lawmakers, consumers, and investors, it is becoming difficult—if not impossible—for companies to ignore the impact: not only creating it, but also measuring it.

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All around us, we see companies, associations, and research organizations taking on the challenge of impact measurement, including for their innovative projects. Yet the task is complex.

A definitional issue

First, there is no consensus on the very conceptof impact and its components. "Impact" has become something of a catch-all term that, depending on who you ask, can mean different things.

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It can have either a negative or positive connotation (for example, "having an environmental impact" can mean "having a detrimental effect on the environment" or "improving the state of the environment," depending on the context).

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Depending on the perspective, the concept of impact may or may not encompassenvironmental,societal, andeconomic aspects, or even other aspects (such asscientific impact).

A scope issue

Existing indicators are often designed:

• For a retrospective assessment of the actions taken: at the end of the campaign or program, at the end of the past year, or even several months or years later.
• For the overall operations of an organization or program.

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Initially, impact measurement was also a topic reserved for so-called “social” or “mission-driven” companies, one of whose clearly stated objectives is to create a positive environmental impact or to serve a marginalized population in order to improve its quality of life. Since the widespread adoption (and, for some organizations, the mandatory requirement) of CSR reporting, impact assessment has expanded to include other types of organizations, but it is often qualitative and non-standardized, except when it comes to carbon footprint calculations.

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Numerous attempts have been made to develop an SRL (Societal Readiness Level), a counterpart to the TRL (Technological Readiness Level) applied to the societal impact of innovation. However, these indices are highly heterogeneous and differ in their own views on what should be measured and how it should be measured.

A conflict of interests

Funding sources are increasingly insisting—and even demanding—that innovative projects provide an assessment of their impact (primarily environmental and societal).

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Nevertheless, each evaluator will also provide their own evaluation framework, with its own indicators, which reflects their particular perspective on the concept of impact. The rules of the game therefore vary depending on whether one is dealing with BPI, ADEME, the European Union, or a private funder.

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Some evaluation grids will focus solely on measuring greenhouse gas emissions, others will examine the circularity of the proposed solution, and still others will look at reducing inequality, and so on. This means, among other things, that a project may well have an impact for one evaluator but not for another. And that the “significance” of that impact depends on the evaluation grid.

Still a long way to go

Even though things are moving in the right direction, project leaders still lack a simple, comprehensive way to assessthe environmental and societal impact of their projects up front, before they reach the market. They need a metric that isn’t limited to the perspective of a single stakeholder, but can be evaluated holistically.

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Such a tool would allow entrepreneurs to take a step back and assess their project: how and to what extent does it aim to improve the world we live in? It would also help maximize that impact, so that it can reach its full potential for positive change. And isn’t thatthe goal every innovator should strive for in today’s world?

Some sources

On the ambiguity surrounding the concept of impact:

• Bührer, S., Feidenheimer, A., Lindner, R., Beckert, B., & Wallwaey, E., “Concepts and methods to measure societal impacts: an overview” (2022). Fraunhofer ISI Discussion Papers - Innovation Systems and Policy Analysis No. 74
• Rawhouser, H., Cummings, M., & Newbert, S. L. (2019). Social Impact Measurement: Current Approaches and Future Directions for Social Entrepreneurship Research. Entrepreneurship Theory and Practice, 43(1), 82–115.

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Some attempts by researchers to develop or analyze an impact metric:

• Phillips, P., Moutinho, L., & Godinho, P. (2018). Developing and testing a method to measure academic societal impact. Higher Education Quarterly, 72(2), 121–140.
• Gibbon, J., & Dey, C. (2011). Developments in Social Impact Measurement in the Third Sector: Scaling Up or Dumbing Down? Social and Environmental Accountability Journal, 31(1), 63–72.