Switzerland Stars, China In Top 25, Innovation Rating Finds

A global innovation rating has found Switzerland to be the most innovative nation in the world for the sixth consecutive year even if some other countries are on its heels. The lead group of countries continued to be mainly composed of most economically advanced nations, while innovation is lagging in many developing countries, but China and India made notable leaps up the list this year. The rankings stirred a broader discussion today of the shifting global economy and the role of innovation, including a call for a new approach to global innovation governance.

The 9th edition of the Global Innovation Index (GII) co-published by Cornell University, INSEAD, and the World Intellectual Property Organization was released today. It ranks the world’s economies’ innovation capabilities and results. This year’s theme is “Winning with Global Innovation.”

WIPO Director General Francis Gurry said in a press briefing at the UN in Geneva launching the GII today that in the current economic environment, the role of innovation is particularly significant because of its potential to open up new avenues of economic growth.

With the world economy underperforming, it is important to renew the emphasis on the importance of innovation, he said. The GII provides a ranking and a benchmarking with 84 indications of the innovation capacity and performance of countries around the world. This benchmarking of innovation capacity is extremely important for policymakers in assessing their own countries, Gurry added.

Bruno Lanvin of INSEAD, one of the GII authors, said at the briefing that the world growth is slow and uneven and is expected to remain slow for the years to come. Public expenditure in research and development and private investment are thus threatened with competing claims and divergent views. Innovation stop-and-go policies can be very damaging, he said, and might cancel progress already achieved.

“We live in a world where emerging countries need to invent their future and mature economies need to reinvent their models,” Lanvin said.

According to the GII, “there is a need for a global innovation mindset and discussions on fresh governance frameworks.”

If Switzerland retains the lead position, the GII says that for the first time the distance from the second-best scoring country is narrowing. Following Switzerland in the lead position, are Sweden (3^rd in 2015), the United Kingdom (2^nd in 2015), the United States (5^th in 2015), Finland (6^th in 2015), Singapore (7^th in 2015), Ireland (8^th in 2015), Denmark (10^th in 2015), the Netherlands (4^th in 2015), and Germany (12^th in 2015) which joins the group of the 10 most innovative economies.

China Enters in the Big Leagues, Global Divide Remains

For the first time, China made it to the top 25 economies of the GII, but, according to the document, “the majority of activities are still concentrated in high-income economies such as Brazil, China, India, and South Africa.”

“Only China has seen its R&D expenditures or other innovation input and output metrics move closer to rich countries,” such as the US, while other middle-income countries “remain distant,” it said.

According to the GII, some middle-income economies that were identified in the past as being on the heels of the richer countries remain far from them or are moving away. Malaysia and Bulgaria “are the only two remaining middle-income economies (other than China) still close to top high-income groups.”

The GII labelled “innovation achievers” economies that perform at least ten percent higher than their peers for their level of GDP (gross domestic product). Those economies include a number of sub-Saharan countries, such as Kenya, Madagascar, Malawi, Rwanda and Uganda, but also India, Vietnam and Armenia.

However, no country in the Latin and Caribbean group is an innovation achiever. According to the GII, most countries in that group continue to be committed to an innovation agenda, but some of them, such as Brazil, have entered in “considerable economic turbulence.”

Greater regional research and development and innovation cooperation in the region could help, the document said.

Chile, ranked 44 in the 2016 GII, has the top spot in the region, closely followed by Costa Rica (45). Mexico ranked 61, and Brazil at 69.

India leads in Central and Southern Asia, Moves Up 15 Spots

India maintains its top place in the region and moved 15 spots from 81^st in 2015 to 66^th in 2016. Kazakhstan kept its second position in the region, also moving up and gaining 7 spots. Next are: Iran, Tajikistan, Sri Lanka, Bhutan, Kyrgyzstan, Nepal, Bangladesh and Pakistan.

South-East Asia, East Asia, and Oceania

According to the Index, in 2016 all economies in the regions ranked within the top 100. The top five countries also belong to the top 25 group, like Singapore (6^th), Korea (11^th), Hong Kong (14^th), Japan (16), New Zealand (17), Australia (19), and China (25).

At the other end of the top 25, the index shows a number of African countries. Ranking 128^th in 2016 is Yemen (128), followed by Guinea, Togo, Zambia, Niger, Burundi, Burkina Faso, Benin, Venezuela, Pakistan, Cameroon, and Bangladesh.

No Mechanical Recipe for Sound Innovation Systems

How to climb the ladder of innovation achievers is the result of several factors, according to the GII. “Absolute spending on R&D or absolute figures on the number of domestic researchers, on the number of science and engineering graduates, or on scientific publications do not guarantee a successful innovation system,” the authors said.

“Too often a higher share of science and engineering graduates, for example, is pursued as a panacea for creating sound innovation systems,” they said. “Good quality remains a distinct characteristic of leaders such as Germany, Japan, the UK and the USA.” China is the only middle-income country showing a comparable innovation quality, India following next.

The role of governments is key, the GII concluded, but it should not be the sole driver of innovation and governments need to find the right balance so that enough space is left for entrepreneurship and innovation, and the right incentives should be provided, as well as “a certain ‘freedom to operate’,” the authors said.

The GII

According to its website, the GII provides a broad horizontal vision of innovation applicable to developed and emerging economies and includes indicators such as the level of research and development.

The GII looked at 128 economies and is based on four measures: the overall GII, the Input and Output Sub-Indices, and the Innovation Efficiency Ratio. The overall GII is the average of the Input and Output scores.

The Input scores are determined by five input pillars capturing elements of the national economy, such as human capital and research, and market sophistication. The Output scores are conditioned by knowledge and technology outputs, and creative outputs.