Released jointly by WIPO, Cornell University and INSEAD – along with knowledge partners Confederation of Indian Industry (CII), Huawei and Dubai mobile operator du – the Global Innovation Index 2014 shows Switzerland, the UK and Sweden in top positions.
The theme of the report this year is ‘The Human Factor in Innovation,’ exploring the role of human capital in the innovation process and mechanisms for identifying and energising creative individuals and teams. (See also my earlier reviews of entrepreneurship research by NVCA, Kaufmann Foundation, OECD and EY.)
The GII 2014 surveys 143 economies around the world, using 81 indicators to gauge both their innovation capabilities and measurable results. The report has been published annually since 2007.
For the GII 2014, Switzerland remains the leader for the fourth consecutive year. The UK moves up a rank to second place, followed by Sweden. The Top Five innovative countries of the world are Switzerland, the UK, Sweden, Finland and Netherlands. In positions No.6 through No.10 are the US, Singapore, Denmark, Luxembourg and Hong Kong.
They top the ranks due to their well-linked innovation ecosystems, human capital investments, ICTs and high levels of creativity. Innovation quality is measured by university performance and patent applications.
“Top-scoring middle-income economies are narrowing the gap on innovation quality with China in the lead, followed by Brazil and India,” according to Soumitra Dutta, Dean of Cornell University and co-author of the report.
As innovation becomes a global game, a growing number of emerging economies are confronted with complex issues whereby ‘brain gain’ can only be generated through a delicate balance between talents outflows (e.g. citizens seeking an education abroad) and inflows (whereby high performers return home to innovate and create local jobs, and diasporas contribute to national competitiveness), according to Bruno Lanvin, Executive Director for Global Indices at INSEAD.
Among the BRICS group (Brazil, Russia, India, China, South Africa), China is at 29th rank, followed by Russia (49), South Africa (53), Brazil (61), and India (76), a slip in its 2013 rank of 66.
India leads in the Central and Southern Asia region in terms of innovativeness. The report also identifies top innovating countries in other regions: North America (US, Canada), Europe (Switzerland, UK, Sweden), Southeast Asia (Singapore, Hong Kong, Korea), Latin America (Chile), Sub-Saharan Africa (Mauritius, Seychelles, South Africa) and Middle East (Israel, UAE).
The Sub-Saharan African region now makes up nearly 50 percent of the so-called ‘innovation learner’ economies, with economies such as Burkina Faso, Gambia, Malawi, Mozambique and Rwanda. The region has also improved the most in GII rankings since last year, with Mauritius in the lead.
The Human Factor
The human factor of innovation partly explains which innovation champions remain at the top. In terms of education and lifelong learning as a subset of human capital formation, the top performers within the high income group are the Korea, Finland and the UK.
China, Argentina and Hungary take the top positions among the middle-income countries. As countries move up the scale of innovation sophistication, the quality of its talents in science, engineering, but also in business and management for example become even more critical.
Innovation inputs and outputs
Public R&D support and corporate R&D expenditures are at lower levels in many countries compared to 2013, and in some cases education funding has also decreased. Strong R&D spending growth in 2014 is expected to take place mostly in Asia, in particular in China, the Korea, and India.
The GII 2014 is calculated as the average of two sub-indices. The Innovation Input Sub-Index gauges elements of the national economy which embody innovative activities grouped in five pillars: institutions, human capital and research, infrastructure, market sophistication and business sophistication.
The Innovation Output Sub-Index captures actual evidence of innovation results, divided in two pillars: knowledge and technology outputs, and creative outputs.
In sum, the report and its previous editions provide useful benchmarks to study the ups and downs of national innovation performances over the years, and provide actionable insights for policymakers and industry leaders.
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