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Switzerland tops GII 2013; US, UK among five most innovative countries
Monday, July 08, 2013 08:00 IST
Geneva

The United States rejoined the five most innovative nations and the United Kingdom moved up to the third spot, while Switzerland retained its place atop the rankings in the Global Innovation Index (GII) 2013, published by Cornell University, INSEAD and the World Intellectual Property Organisation (WIPO).

Despite the economic crisis, innovation is alive and well. Research and development spending levels are surpassing 2008 levels in most countries, and successful local hubs are thriving. A group of middle- and low-income countries – including China, Costa Rica, India, and Senegal – are outpacing their peers, but haven’t broken into the top of the GII 2013 leader board.

This year’s report cast additional light on the local dynamics of innovation, an area which has remained under-measured globally. It shows the emergence of original innovation eco-systems, and signals a needed shift from a usual tendency to try and duplicate previously successful initiatives.

“Dynamic innovation hubs are multiplying around the world despite the difficult state of the global economy. These hubs leverage local advantages with a global outlook on markets and talent,” said Francis Gurry, director general, WIPO.

“For national-level policy makers seeking to support innovation, realising the full potential of innovation in their own backyards is often a more promising approach than trying to emulate successful innovation models elsewhere.”

GII 2013 looked at 142 economies around the world, using 84 indicators including the quality of top universities, availability of microfinance and venture capital deals – gauging both innovation capabilities and measurable results.

Published annually since 2007, the GII has become a chief benchmarking tool for business executives, policy-makers and others seeking insight into the state of innovation around the world.

This year’s study benefits from the experience of its knowledge partners, Booz & Company, the Confederation of Indian Industry, du and Huawei, as well as of an advisory board of 14 international experts.

Ban Ki-moon, secretary general, United Nations, joined the authors of the report and its knowledge partners in presenting the GII 2013 findings at the high-level segment of the United Nations Economic and Social Council (ECOSOC).

The high-level segment, held in Geneva recently, brought together heads of state, ministers and heads of international agencies. This year's meeting focussed in particular on the role of science, technology and innovation and the potential of culture in achieving the Millennium Development Goals and promoting sustainable development.

Top ten rankings for 2013

Rank in 2013

Country

Rank in 2012

1

Switzerland

1

2

Sweden

2

3

The United Kingdom

5

4

The Netherlands

6

5

The United States of America

10

6

Finland

4

7

Hong Kong (China)

8

8

Singapore

3

9

Denmark

7

10

Ireland

9



Switzerland and Sweden’s performances reflect the fact that both countries are leaders in all pillars of the GII, consistently ranking in the top 25. The United Kingdom has a well-balanced innovation performance (ranking fourth in both input and output), despite a relatively low level of growth in labour productivity.

The United States continues to benefit from its strong education base (especially in terms of top-ranking universities), and has seen strong increases in software spending and employment in knowledge-intensive services. The US was last in the GII top five in 2009, when it was number one.

“The results of the GII provide testimony to the global nature of innovation today. The top 25 ranked countries on the GII are a mix of nations from across the world – North America, Europe, Asia, Oceania and the Middle East,” Soumitra Dutta, the report's co-editor, and Anne and Elmer Lindseth Dean, Samuel Curtis Johnson Graduate School of Management, Cornell University, said.

“While high-income economies dominate the list, several new players have increased their innovation capabilities and outputs. On an average, high-income countries outpace developing countries by a wide margin across the board in terms of scores. A persistent innovation divide exists,” they added.

“Business, government and civil society all offer new solutions and fresh ways of collaborating to spur innovation at local, national and even global levels,” said Bruno Lanvin, the report’s co-editor and executive director, INSEAD’s European Competitiveness Initiative.

“In fact, innovation is rapidly becoming a rallying symbol for forces of progress and reform around the world. Although our findings show that daunting challenges remain for many new players, we also see exciting examples of innovation success, including in some of the poorest countries. This is a source of optimism about the future of global innovation and economic recovery.”

Top rankings for 2013 by region


Central and Southern Asia


Rank in Region

GII 2013 Overall Rank

Country

1

66

India

2

84

Kazakhstan

3

98

Sri Lanka





Sub-Saharan Africa


Rank in Region

GII 2013 Overall Rank

Country

1

53

Mauritius

2

58

South Africa

3

89

Uganda





Southeast Asia and Oceania


Rank in Region

GII 2013 Overall Rank

Country

1

7

Hong Kong (China)

2

8

Singapore

3

17

New Zealand





Latin America and the Caribbean


Rank in Region

GII 2013 Overall Rank

Country

1

39

Costa Rica

2

46

Chile

3

47

Barbados





Northern Africa and Southern Asia


Rank in Region

GII 2013 Overall Rank

Country

1

14

Israel

2

27

Cyprus

3

38

The United Arab Emirates





Europe


Rank in Region

GII 2013 Overall Rank

Country

1

53

Switzerland

2

58

Sweden

3

89

The United Kingdom





Northern America


Rank in Region

GII 2013 Overall Rank

Country

1

5

The United States of America

2

11

Canada


The above figures show how innovation learners can leverage their strength.

Among the encouraging signs identified by GII 2013, 18 emerging economies are outperforming other countries in their respective income groups.

In order of distance, these are the Republic of Moldova, China, India, Uganda, Armenia, Vietnam, Malaysia, Jordan, Mongolia, Mali, Kenya, Senegal, Hungary, Georgia, Montenegro, Costa Rica, Tajikistan and Latvia.

All of them demostrate the rising levels of innovation compared with their peers. Even if progress is not uniform, this is a result of tackling the formulation of a good policy mix on all meaningful fronts – institutions, skills, infrastructure, integration to global markets and linkages with the business community.

By and large, Latin America is the region that has seen the most significant improvement in GII rankings, with Costa Rica taking the lead regional position.

“Underperforming countries can boost their innovation capabilities by developing hubs in which large companies, whose business goals are aligned with the objectives of the innovation hub, can play a key catalyst role,” said Barry Jaruzelski, senior partner and leader, global engineered products and services practice, Booz and Company.

“Enterprise champions, including state-owned enterprises, family-owned conglomerates, and multinational corporations, can be the critical drivers of innovation hub activities. These enterprise champions can facilitate the building of hub capabilities and their talent pools by stimulating innovation and by helping to bridge the gap between research and commercial success,” he added.

Innovation leaders and innovation learners
The GII 2013 shows a striking pattern of stability among the most innovative nations. Whether we look at the top 10 or top 25 innovators in the world, GII rankings show that that while individual countries swap their respective rankings within these groups, not a single country moved in or out of such groups in 2013.

One interpretation of this is that innovation success leads to the emergence of a virtuous circle. Once a critical threshold has been reached, investment attracts investment, talent attracts talent, and innovation generates more innovation.

Through several of its analytical chapters, the 2013 edition of GII explores how innovation has benefited from local specifics in different parts of the world. One key message is that too many innovation strategies have been focused on trying to replicate previous successes elsewhere, like Silicon Valley in California.

However, fostering local innovation requires strategies that should be deeply rooted in local comparative advantages, history and culture. They should be combined with a global approach to reach out to foreign markets and attract overseas talent.

“The local dynamics of innovation varies considerably across the globe and influences innovation measurement at the unit level. Learning from the local innovation systems adds newer dimensions to existing measurement approaches and challenges. The focus of this year’s GII makes it a valuable guide for the policy-makers to develop specific strategies relevant to their local innovation eco-system,” said Chandrajit Banerjee, director general, Confederation of Indian Industry (CII).

“The creation of an environment that could unleash the potential for innovation for all in a sustainable manner is the way to unlocking the true, tangible potential of value creation; it will lay the groundwork for societal change and develop a framework for cohesive synergies through collaboration,” Osman Sultan, chief executive officer, du Research and Development, said.

“The unprecedented socio-economic momentum that has been created in the last few decades in the United Arab Emirates makes this country very well positioned to continue to play a pivotal role in this exciting journey as a regional hub for innovation,” he added.

On the research and development (R&D) front, GII 2013 brings a dose of cautious optimism. Despite adversity and tightened budget policies, R&D expenditures have grown since 2010. On the business front, the R&D expenditures of top 1,000 R&D spending companies have grown between nine and ten per cent in 2010 and 2011. A similar pattern has been observed in 2012.

The most remarkable characteristic of that trend is that emerging markets have increased their R&D faster than high-income countries. Over the last five years, China, Argentina, Brazil, Poland, India, Russia, Turkey and South Africa (in that order) have been at the forefront of this phenomenon. Emerging markets, and notably China, are also largely driving the growth in patent filings worldwide.

“Growing research and development investments and the rising number of intellectual property patents filed are tangible examples of a growing commitment to innovation,” said Li Yingtao, who heads Huawei’s 2012 R&D laboratories.

“In the global economy, innovation from anywhere can drive change and create new opportunities everywhere. Everyone concerned with innovation as a catalyst for economic and social development needs to remain focussed on how the value of innovation is to transform industries, businesses and people’s lives, not just locally but across the world,” he added.

Innovation per Income Bracket


High Income Group


Group Rank

GII 2013 Overall Rank

Country

1

1

Switzerland

2

2

Sweden

3

3

The United Kingdom





Upper-middle Income Group


Rank in Region

GII 2013 Overall Rank

Country

1

32

Malaysia

2

33

Latvia

3

35

China





Lower-middle Income Group


Rank in Region

GII 2013 Overall Rank

Country

1

45

Republic of Moldova

2

59

Armenia

3

66

India





Low Income Group


Rank in Region

GII 2013 Overall Rank

Country

1

89

Uganda

2

99

Kenya

3

101

Tajikistan






About the Global Innovation Index
The Global Innovation Index is in its sixth edition this year. The core of the GII Report consists of a ranking of world economies’ innovation capabilities and results.

Recognising the key role of innovation as a driver of economic growth and prosperity, and the need for a broad horizontal vision of innovation applicable to developed and emerging economies, the GII includes indicators that go beyond the traditional measures of innovation such as the level of research and development.

In just six years, the GII has established itself as the premier reference among innovation indices, and has evolved into a valuable benchmarking tool to facilitate public-private dialogue, whereby policy-makers, business leaders and other stakeholders can evaluate progress on a continual basis.

To support the global innovation debate, to guide polices and to highlight good practices, metrics are required to assess innovation and related policy performance.

The Global Innovation Index (GII) creates an environment in which innovation factors are under continual evaluation, including the following features:
142 country profiles, including data, ranks and strengths and weaknesses on 84 indicators;
84 data tables for indicators from over 30 international public and private sources, of which 60 are hard data, 19 composite indicators, and five survey questions, and
A transparent and replicable computation methodology, including 90 per cent confidence interval for each index ranking (GII, output and input sub-indices) and an analysis of factors affecting year-on-year changes in rankings

GII 2013 is calculated as the average of two sub-indices – the Innovation Input Sub-Index and the Innovation Output Sub-Index.

The Innovation Input Sub-Index gauges elements of the national economy which embody innovative activities grouped into five pillars, namely
(i) Institutions;
(ii) Human capital and research;
(iii) Infrastructure;
(iv)  Market sophistication, and
(v) Business sophistication

The Innovation Output Sub-Index captures actual evidence of innovation results, divided into two pillars, namely
(i) Knowledge and technology outputs, and
(ii) Creative outputs

The index is submitted to an independent statistical audit by the Joint Research Centre of the European Commission.



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