The innovation indicator captures the conditions for innovation at the business location Germany and compares these with the worldwide leading industrial states. The innovation performance is captured and aggregated into an overall index for five sections – economy, science, education, government and society. The result is a ranking of countries. The specialty of the innovation indicator in comparison to rankings based on other indicators is the model-based econometric selection of indicators. This ensures that only relevant indicators are considered and a redundancy of the information measured through different indicators is avoided.