The sixth annual Global Innovation Index (GII) ranks Switzerland at the top, with three Scandinavian countries in the leading group, while emerging countries, especially the BRICs, are starting to knock at the door.
Every year Cornell University, INSEAD, and the World Intellectual Property Organisation (WIPO) assess innovation levels around the world and publish their findings in the Global Innovation Index. The Index, which ranks countries’ basic innovation capabilities and measurable innovation, has become a recognised benchmarking tool for comparing countries and regions. Their innovation infrastructure and propensity are assessed on the basis of five ‘input’ domains or ‘pillars’ -institutions, human capital and research, infrastructure, market sophistication and business sophistication -while actual innovation output is calculated under two pillars, namely knowledge & technology outputs and creative outputs. The 2013 GII examines 142 economies around the world using 84 indicators, resulting in the same number of data tables, which serve primarily to help outline future directions for public policy and to draft scenarios for initiating public-private dialogue. Moreover, the Index enables decision-makers and other stakeholders to assess progress achieved on an ongoing basis. Given the essential role of innovation in economic growth and prosperity, the GII could well become a high-profile economic indicator.
Developing countries making the fastest progress
The top of the GII rankings remains the province of Western developed nations, with Switzerland, Sweden, the United Kingdom, the Netherlands and the United States making up the top five. In fact Switzerland and Sweden, which are never far from the top in any year, dominate all seven pillars in 2013. The UK results reveal a well-balanced innovation performance, while the United States is still leveraging its strong education base, spearheaded by its top-rank universities. Nevertheless, one important lesson to be learned from this year’s GII is the global nature of innovation, with 18 countries labelled ‘poor’ or ‘emerging’ -including China, India, Jordan, Kenya, Hungary and Costa Rica -widely outperforming their peers on innovation activity within their respective income bands. Progress is certainly not uniform, but clearly results from applying appropriate policies both in terms of institutions and infrastructure and integration into world markets. Latin America is the region that has seen the most significant improvement in the GII rankings this year, with Costa Rica taking the lead regional position.
Budgets maintained despite the crisis, local innovation hubs thriving
The financial crisis has had a definite impact on innovation initiatives in recent years, but this year the GII points to a degree of optimism regarding research and development budgets. R&D spending in 2013 is back up above 2008 levels in most countries and there seems to be a trend for emerging markets to increase their R&D budgets faster than high-income countries. Emerging markets, notably China, are also largely spearheading worldwide growth in patent filings. Another significant piece of good news is that innovation activity appears to be able to emerge at local level. The local approach has often been underplayed as countries seek to emulate innovation models that have proved successful elsewhere. However, the emergence of locally-originating innovation ecosystems based on local comparative advantages has now been shown to be a worthwhile strategy, as long it is combined with an international approach to markets and investors. Local innovation thus has the potential to become a driver for change, creating new opportunities all over the world.