•Generalises the definition of innovation in the business sector to all economic sectors.•Uses the System of National Accounts for definitions of economic sectors.•Uses a systems approach to the analysis of innovation.•Examines policy implications of measuring innovation in all sectors. This paper combines general definitions of innovation applicable in all economic sectors with a systems approach, to develop a conceptual framework for the statistical measurement of innovation. The resulting indicators can be used for monitoring and evaluation of innovation policies that have been implemented, as well as for international comparisons. The extension of harmonised innovation measurement to all economic sectors has implications for innovation research and for policy learning.