Innovation and entrepreneurship are essential processes for human development, market growth, and technological breakthroughs, and it is vital for economic growth. Despite its importance, innovation is inherently difficult to measure and hence it is almost impossible for an individual or organization to know how they can improve their innovation output or claim that they are great at innovation. This paper presents a novel approach to measure and quantify innovation, called the Berkeley Innovation Index (BII). The BII characterizes and measures innovation capability of an individual or an organization. It builds on the hypothesis that innovation performance depends on the people, culture, and attitudes in an organization. With the BII, the individual mindset and the culture of a larger organization, can be measured, analyzed, evaluated, and tracked. It also enables organizations and individuals to adopt a forward-looking approach to forecast and predict future innovation capabilities. This paper presents the approach and its fundamentals, and it includes examples of how the BII has been used to track changes in innovative mindsets.