Global Innovation Index: Most Innovative Keep Top Spots

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Innovation is a main focus of the United Nations Economic and Social Council (ECOSOC) substantive session taking place in Geneva this week. Today, at the ECOSOC opening session, the 2013 Global Innovation Index (GII) was launched, which ranked Switzerland, Sweden, the United Kingdom, the Netherlands, and the United States as the top five most innovative countries in the world.

The 2013 edition [pdf] marked the return of the US to the top five and the third year running that Switzerland claimed the top spot. Published by Cornell University, INSEAD, and the World Intellectual Property Organization, the 2013 GII ranked the innovation performance of 142 countries, which represent around 95 per cent of the world’s population and 99 per cent of the world’s GDP.

The 2013 GII was calculated as the average of two sub-indices based on innovation input and output and seven “pillars” overall. There are five pillars under the input sub-index: institutions, human capital and research, infrastructure, market sophistication, and business sophistication. The innovation output sub-index is divided further into two additional pillars: knowledge and technology outputs, and creative outputs.

In his opening remarks at today’s session, UN secretary-general Ban Ki-moon welcomed ECOSOC’s decision to focus on innovation at this year’s meeting, and said that innovation is “at the heart of addressing the interlinked challenges of global development.” Ban cited the reliance on traditional biomass energy sources, high rates of youth unemployment, and challenges of food security as evidence of the clear need for innovation.

Representatives from each of the three organisations responsible for the GII provided further comments, analysis and background into the methodology and impact of the index. WIPO Director General Francis Gurry said he was delighted to launch the 2013 GII at ECOSOC, since innovation has a major role to play in economic growth and success in a global economy in which knowledge and intangibles are increasingly important in production and distribution.

Gurry described innovation as a major source of competition and competitive advantage for enterprises, industries and companies. He further elaborated by saying intellectual property played an essential role in innovation by capturing its economic value, encouraging investment in research and development, and by arbitrating between the encouragement of investment in innovation and the sharing of social benefits of innovation.

Soumitra Dutta, dean of the Graduate School of Management at Cornell University, noted the representation of countries from all over the world in the top 25 places of the ranking as a significant characteristic of this year’s GII compared to previous years. He argued that the mix of countries from different geographical areas and different economic groups on the list was a testament to the evolving global nature of innovation. Although progress has been made by middle- and low-income countries overall (including Indonesia, Malaysia, China, Bolivia and Costa Rica), economic growth remains uneven. Ranking remained strongly correlated with income levels.

The countries ranked in the top 10 and in the top 25 in 2012 remained the same this year, without exception. Although some countries swapped their respective rankings within these groups, no country moved in or out of them. It was suggested that this might be because once a country passes a critical threshold it stays past it, and success in innovation leads to a beneficial circle of investment, talent and innovation. Whatever the cause, it is certain that innovation remains unequal and that there are still obstacles to innovation in the paths of many smaller economies. Dutta argued that this presents a number of significant challenges for policymakers and governments to work together to build good academic institutions and open, meritocratic environments that would attract talent from all over the world.

Bruno Lanvin, executive director of INSEAD European Competitiveness Initiative, outlined the key messages that emerged from the latest GII. Calling innovation “a global game,” he noted that increasingly, innovation is not just for rich countries – it involves key players from a range of income groups. Transitioning economies, Lanvin said, face the challenge of “an invisible wall,” which prevents countries from making radical progress in the ladder of innovation.

A balance of performance across the basic pillars of the index was needed in order to be a high-performer in innovation, according to Lanvin. Switzerland and Sweden, who occupied the top two positions in the rankings, were the only countries that also ranked within top 25 countries across all pillars of the index.

Gurry noted that the GII examines a wide range of factors and that in order for a country to move up the rankings, it needs to engage in gradual broad-based change. The GII shows that local dynamics are critically important in this regard. For Lanvin, it was encouraging that there were examples of rapidly improving innovation capabilities, especially at the local level. Furthermore, new models of managing and implementation had been found in the research for the 2013 GII. Lanvin said, “Silicon Valley was not the only model that applied.”

There was special focus in the GII this year on local dynamics, and the results suggest that these are critical in devising the right kind of innovation. Ban said that, “as the theme of the Global Innovation Index implies, innovation must be locally adapted and build on home-grown knowledge and expertise. Science, technology and innovation will play a key role in driving sustainable development.”

The speakers stated that although many countries still do not have the capacity to innovate, the GII could help countries to overcome this, by providing them with measures that they can use to improve their capacity to innovate. In this respect, Ban said, in a press stakeout following his opening remarks, that he fully supported the smooth transfer of technology from developed to developing nations. As all the speakers underlined, progress requires a holistic approach to innovation; it must involve cultural and social as well as economic and technical innovation.

ECOSOC President Néstor Osorio highlighted the importance of innovation, saying that innovation-driven growth is indispensable to development and that it must be integrated into policy. He said that the GII is a valuable tool that allows all players to evaluate progress on a continuing basis.

GII aims not only to rank countries but to be a source of action. It aims to give policymakers the necessary information to act and to foster innovation. Gurry argued that the GII is paving the way to better and more well-informed policies around the world, and that these policies will lay the foundation for future growth.

Lanvin said that this year’s GII provided a “cautiously optimistic and contrasting view on innovation; spending and investment on innovation had been sustained despite of the crisis but remained a fragmented phenomenon and a better understanding could contribute to unleashing growth and job creation.”

Brittany Ngo is currently completing her Master’s in Health Policy and Global Health at the Yale School of Public Health and previously obtained a Bachelor’s of Arts in Economics from Georgetown University. Through her studies she has developed an interest in health-related intellectual property issues. She is a summer intern at Intellectual Property Watch.

Caitlin McGivern is currently studying at the University of Law in London and will graduate with an LLM in 2014. She previously obtained a Bachelor’s of Arts in Philosophy and Theology from the University of Oxford. She is a summer intern at Intellectual Property Watch. She is of Swiss, Canadian and Irish nationalities.

Brittany Ngo may be reached at info@ip-watch.ch.

Caitlin McGivern may be reached at info@ip-watch.ch.

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