The purpose of this contribution is to develop a Circular Economy Composite indicator to benchmark EU countries performance. Europe is at the forefront of the global transition towards a sustainable and circular economy. To this end, the European Commission has launched in 2015 a Circular Economy Action Plan including a monitoring framework to measure progress and to assess the effectiveness of initiatives towards the circular economy in the European Union (EU) and Member States. Still, this monitoring framework lacks a composite indicator at the national level to aggregate the circular economy dimensions into a single summary indicator. Although there is a wide range of sustainability composite indicators, no aggregate circular economy index exits to this date. We use a multi-criteria approach to construct a circular economy composite index based on TOPSIS (Technique for Order Preferences by Similarity to Ideal Solutions) methodology. In addition, we introduce a novel aggregation methodology for building a composite indicator where different levels of compensability for the distances to the ideal and anti-ideal (or negative-ideal) values of each indicator are considered. In order to illustrate the advantages of this proposal, we have applied it to evaluate the Circular Economy performance of EU Member States for the year 2016. This proposal can be a valuable tool for identifying areas in which the countries need to concentrate their efforts to boost their circular economy performance.

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The evaluation of regional innovation performance through composite innovation indices can serve as a valuable tool for policy-making. While discussion on the best methodology to construct composite innovation indices continues, we are interested in deepening the use of reference levels and the aggregation issue. So far, additive aggregation methods are, largely, the most widespread aggregation rule, thus allowing for full compensability among single indicators. In this paper, we present an integrated assessment methodology to evaluate regional innovation performance using the Multi-Reference Point based Weak and Strong Composite Indicator (MRP-WSCI) approach, which allows defining reference levels and different degrees of compensability. As an example of application to the Regional Innovation Scoreboard, the proposed technique is developed to measure the innovation performance of Spain’s regions taking into account Spanish and European reference levels. The main features of the proposed approach are: (i) absolute or relative reference levels could be previously defined by the decision maker; (ii) by establishing the reference levels, the resulting composite innovation index is an easy-to-interpret measure; and (iii) the non-compensatory strong composite indicator provides an additional layer of information for policy-making (iv) a visualization tool called Light-Diagram is proposed to track the specific strengths and weaknesses of the regions’ innovation performance.

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A critical step in multiple criteria optimization is setting the preferences for all the criteria under consideration. Several methodologies have been proposed to compute the relative priority of criteria when preference relations can be expressed either by ordinal or by cardinal information. The analytic hierarchy process introduces relative priority levels and cardinal preferences. Lexicographical orders combine both ordinal and cardinal preferences and present the additional difficulty of establishing strict priority levels. To enhance the process of setting preferences, we propose a compact representation that subsumes the most common preference schemes in a single algebraic object. We use this representation to discuss the main properties of preferences within the context of multiple criteria optimization.