“Innovation” is a very slippery term, so I agree defining it would be more difficult than other measures. So for simplicity, let’s use something a bit simpler, like a “quality of living index” or “overall human well-being index”.

It’s not feasible for a human to define such a metric formally upon ‘environmental variables’ (such as education stats, graduation rates, etc.) — quite obviously, as you say — yet trivial to define it as an “outcome measure”, where we directly measure the quantity in question (no matter how difficult or expensive to sample this variable).

To the “quality of living index” example: One could design a polling methodology to fairly reliably gauge people’s overall happiness and satisfaction in a country. This polling would be expensive, so we couldn’t do it super broadly or super frequently — and that’s why we use the subsequent steps described in my parent post (on forming statistical models to separate out connected variables that we can easily and cheaply measure to approximately model the “ground truth” happiness metric).

You can then use this “model fit” to predict this extremely expensive “ground truth” notion of individual happiness in this case, on a much more frequent and granular basis than would ordinarily have been feasible using a ground truth gathering method like a polling process.