Indicators of absorptive capacity. Conceptual framework and estimates for 25 countries and 24 UK sectors

• Development of conceptual and operationalisation framework leading to estimates of absorptive capacity. • Development of policy relevant dimensions related to embodiment and to acquisition of knowledge. • Estimates of indicators for 25 European countries and 24 sectors of UK using data from the Community Innovation Survey. • Results show relevance of embodiment in knowledge intensity and in human resources. • The sectoral study shows synergies between largest and medium-sized enterprises within the same sector. The paper develops a conceptual and operationalization framework for absorptive capacity (ACAP) leading to empirical indicators useful for the development of innovation policy. Applications are presented for 25 European countries and 24 UK sectors. For the country study, four dimensions are developed. Two in relations to embodiment of knowledge and two to acquisition. On the former, one dimension captures embodiment in assets and scientific activities and one in human resources both on the supply and demand side. Two dimensions capture acquisition of knowledge via social linkages and via physical and digital connectivity. Several variables contribute to each of these dimensions. ACAP values are arrived at by combining all dimensions. The sector study is developed along similar lines. It has two components related to large and medium-sized enterprises. The results show: clear strengths and weaknesses in ACAP by country and sector; and, in the sector study, more sector- than enterprise-size specificity.