Who are the innovation leaders?

Have you ever wondered which countries have the best innovation ecosystems? We all know that innovation is important. But which countries are the best at it?

The Global Innovation Index

Last week we saw the launch of the Global Innovation Index 2013 (GII 2013). The Index is co-published by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO). The GII 2013 ranks 142 economies, representing 94.9% of the world's population and 98.7% of the world's GDP.

The authors recognize that success in innovation requires excellence across a range of input conditions. This objective is difficult to reach for many less-developed economies. The authors note that:

[g]reat scientific centres not only require eminent universities and laboratories, they also require a broader environment of meritocracy and openness to diversity that can attract top talent from around the world. For this reason, it is unlikely that the world’s leading science cities will change significantly in coming decades. . . . The presence of major scientific centres has itself become a key source of innovation and economic growth. This is likely to lead to more concentrated innovation and economic development in the future, increasing the gaps between the world’s scientific ‘haves’ and ‘have-nots’.

How it works

The GII 2013 takes a holistic view of innovation. There are a total of 84 different indicators that are used to rank the innovation of different economies. The model involves four overall measures. These are the Innovation Input Sub-Index, the Innovation Output Sub-Index, the overall GII score, and the Innovation Efficiency Ratio.

The Innovation Input Sub-Index

There are five input pillars that capture elements of the national economy that enables innovative activities. These are:

1. Institutions - political environment, regulatory environment, business environment
2. Human capital and research - education, tertiary education, R&D
3. Infrastructure - ICT, general infrastructure, ecological sustainability
4. Market sophistication - credit, investment, trade & competition
5. Business sophistication - knowledge workers, innovation linkages, knowledge absorption

The Innovation Output Sub-Index

Innovation outputs are the results of innovative activities within the economy. There are two output pillars:

1. Knowledge and technology outputs - knowledge creation, knowledge impact, knowledge diffusion
2. Creative outputs - intangible assets, creative goods and services, online creativity

The overall GII score

This is the simple average of the Input and Output Sub-Indices

The Innovation Efficiency Ratio

This is the ratio of the Output Sub-Index over the Input Sub-Index. It shows how much innovation output a given country is getting for its inputs.

What are the results?

The top ten most innovative countries in the world, according to the GII 2013, are:

1. Switzerland
2. Sweden
3. United Kingdom
4. Netherlands
5. United States
6. Finland
7. Hong Kong (China)
8. Singapore
9. Denmark
10. Ireland

Down here in South East Asia/Oceania the top ten are:

1. Hong Kong (China)
2. Singapore
3. New Zealand (17th overall)
4. Korea (18th overall)
5. Australia (19th overall)
6. Japan (22nd overall)
7. Malaysia (32nd overall)
8. China (35th overall)
9. Thailand (57th overall)
10. Mongolia (72nd overall)

The innovation leaders

The top 25 countries, including New Zealand and Australia, are described as 'innovation leaders'. Apparently we

'have succeeded in creating well-linked innovation ecosystems where investments in human capital thrive in fertile and stable innovation infrastructures to create impressive levels of innovation outputs'.

There is always room for improvement. But it is good to sit back for a moment and recognise that we're doing something right.

Photo courtesy of author futureatlas.com under Creative Commons licence.