SA Forum is an invited essay from experts on topical issues in science and technology.
The definition of innovation has broadened in recent years. It used to refer to research and development done in laboratories and the results of scientific experiments published in journals. But innovation is now considered to be more general than that. It includes improvements in how people work in virtual teams, global supply chains and business models. And it is more horizontal, spanning national and organizational boundaries. Recognizing and celebrating innovation is critical for inspiring people.
To talk intelligently about innovation, however, you have to be able to measure it. That was our goal in launching the Global Innovation Index (GII) in 2007. Innovation is important for driving economic progress and competitiveness for both developed and developing economies. Many governments are putting innovation at the center of their growth strategies. What we needed was a measurement that captured the richness of innovation in society.
A holistic view of innovation is embedded in the GII. The first part of the index captures elements of the kinds of activities that enable innovation to happen: institutions, human capital and infrastructure, along with market and business sophistication. The second part includes actual evidence of innovation: the products of knowledge, technology and creativity. The GII presents us with a rich trove of data to analyze for global innovation trends.
One thing the GII makes plain is that innovation has become a global game. The top 10 countries in 2013 are located around the globe.
1. Switzerland (1 in 2012)
2. Sweden (2)
3. U.K. (5)
4. the Netherlands (6)
5. U.S. (10)
6. Finland (4)
7. Hong Kong (China) (8)
8. Singapore (3)
9. Denmark (7)
10. Ireland (9)
A stubborn divide between the innovation haves and have-nots persists, however. The GII 2013 results show a striking stability among the most innovative nations. Even as innovators thrive in local and regional hubs around the world, several high- and middle-income countries are not yet breaking into the highest ranks of the GII. One interpretation could be 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. Innovation divides are also appearing within regions. In Europe, for instance, 16 countries are in the top 25, another 15 in the top 50, and the remaining eight reside in within the 51-to-93 ranking, including Greece (55) and Russia (62).
The good news is that some nations are learning and rapidly improving their capability to innovate. Eighteen emerging economies are outperforming other countries in their respective income groups in this year’s GII: Moldova, China, India, Uganda, Armenia, Vietnam, Malaysia, Jordan, Mongolia, Mali, Kenya, Senegal, Hungary, Georgia, Montenegro, Costa Rica, Tajikistan and Latvia. Even if progress is not uniform, this performance is mostly a result of a good policy mix on multiple fronts: institutions, skills, infrastructures, integration to global markets and linkages with the business community.
The GII shows the benefits of a holistic knowledge-based growth strategy for innovation. This seems to be a challenge for many middle-income economies, especially the BRICs (Brazil, Russia, India and China), as evidenced by their relative stagnation in innovation ranks in 2013 as compared with 2012: China (35; a decrease of one), India (66; a decrease of two), Brazil (64; a decrease of six) and Russia (62; a decrease of 11). New challengers for the BRICs could emerge in the coming years as other middle-income nations are increasing their innovation ranks rapidly: Mexico (63; an increase of 16), Indonesia (85; an increase of 15), Turkey (68; an increase of six) and others (Uganda, Costa Rica, Bolivia, Cambodia, Uruguay, Ecuador all increased by more than 15 positions).
The picture, however, is nuanced. Whereas the BRIC countries saw their rankings decrease in 2013, they are doing well in some key quality of innovation indicators. Methods and indicators in the GII have been refined over the years to add more elements to qualitative, as opposed to quantitative, factors. For example, this year’s index includes the performance of the top three universities in each economy, the filing of patents in multiple countries (patent family applications), and an assessment of the impact of scientific publications as measured by the number of citations. Although the top 18 positions on these three key indicators combined are taken by high-income economies, the BRIC nations are the best performers among middle-income countries, with Argentina, Mexico, South Africa, Malaysia, Chile and Turkey among the top 45.
The main value of the GII as an instrument for policy- and decision-making does not reside in the index itself. The GII includes several features aimed at helping stakeholders understand the evolving global dynamics of innovation, with the inclusion of detailed country profiles and data tables, thematic or regional analyses featured in boxes, annexes addressing the year-on-year comparability of results, and the reliability and robustness of rankings (independent statistical audit). The GII emphasizes the fact that fostering innovation requires strategies rooted in local comparative advantages, history and culture, in combination with a global approach to reach out to foreign markets as well as attract overseas talent.