Key Messages
1. A new dynamics of innovation is emerging around the world regardless of the deep and persistent innovation divides. The GII confirms that average rankings increase with income levels. Large innovation divides also exist across geographic regions, especially when comparing high-income countries with those of other regions, such as Africa and large parts of Asia and Latin America. That said, the GII confirms that different parts of the world have come up with their own ‘innovation models’. This is exemplified by the range of countries from different continents ranking in the top 20 of the GII.
2. Three categories can be identified based upon countries’ innovation performance in relation to their income levels (GDP per capita in PPP$).
- ‘Innovation leaders’ are high-income countries which have succeeded in creating innovation ecosystems supporting human capital and stable innovation infrastructures, including the top 10, Switzerland, Sweden, Singapore, Finland, the UK, the Netherlands, Denmark, Hong Kong (China), Ireland, and the US; as well as Luxembourg, Canada, New Zealand, Germany, Malta, Israel, Estonia, Belgium, Republic of Korea, France, Japan, Slovenia, the Czech Republic, and Hungary.
- ‘Innovation learners’ are middle-income economies with rising levels of innovation as a result of improvements in institutional frameworks, a skilled and educated labour force, better innovation infrastructures, and a sophisticated business community—even if progress in these dimensions is not uniform across all segments of the country—including: Latvia, Malaysia, China, Montenegro, Serbia, Republic of Moldova, Jordan, Ukraine, India, Mongolia, Armenia, Georgia, Namibia, Viet Nam, Swaziland, Paraguay, Ghana, and Senegal. Among low-income countries, Kenya and Zimbabwe stand out.
- ‘Innovation underperformers’ are countries with potential for innovation on the basis of their income levels, but with weaknesses in their innovation systems, including a mix of high-income economies such as Qatar, the UAE, Oman, Brunei Darussalam, Kuwait, Greece, and Trinidad and Tobago; as well as middle-income countries such as Argentina, Belarus, Mexico, Botswana, Panama, the Islamic Republic of Iran, Gabon, the Bolivarian Republic of Venezuela, Algeria, the Syrian Arab Republic, Angola, Lao PDR, Yemen, and Sudan.
3. Investing in innovation in times of crisis is essential. Innovation cannot cure the most immediate financial difficulties, but it is a crucial element of sustainable growth and future prosperity. Business uncertainty during the economic crisis has meant that many large multinational firms have preferred to accumulate cash rather than invest it in R&D. There is also a risk that as of 2011 R&D-related government expenditures as part of economic stimulus plans agreed in 2009 will cease to exist. R&D and innovation cannot be stopped and then simply picked up again when the economy recovers.
4. A focus on the systemic dimension of innovation and building strong linkages across the innovation ecosystem is crucial. Innovation leaders (such as the Scandinavian countries) have improved the linkages across the various innovation actors, most notably in science, higher education, public entities, and both the private and not-for-profit sectors. Many resource-rich economies have made significant investments in human capital over the last years, but have yet to reap the innovation benefits from these actions because of lack of coordination across all sectors.
5. Policy discussions in Europe have to include a focus on innovation. A multi-speed Europe is emerging, creating a divide between innovation leaders in Northern and Western Europe; Baltic and Eastern European countries improving their rankings; and countries that perform less well in Southern Europe.
6. North America needs to address what could become chronic weaknesses. While the US continues to show great strengths in many innovation outputs and while it is still the innovation leader in many respects, it shows pressure points relating to human resources and openness to global talent. Canada is the only country to exit the top ten ranks as compared to last year.
7. The BRIC countries (Brazil, the Russian Federation, India and China) have in common governance and institutional challenges and need to renew their innovation drivers to live up to their potential. Like last year, China and India demonstrate a great ability to translate pockets of excellence in their innovation infrastructures into valuable innovation outputs and lead the Innovation Efficiency ranking. Brazil has suffered the largest drop in the GII ranking among BRIC’s performance this year.
8. Measuring innovation is a moving target. The definition of innovation has broadened—it is no longer restricted to R&D laboratories and to published scientific papers. Innovation also includes social innovations and business model innovations. Based on discussions with innovation experts, inputs from the Advisory Board and Knowledge Partners, the GII model is revised every year. While the end results take the shape of several rankings, the GII is more about improving ‘the journey’ to better measuring and understanding innovation and with identifying targeted policies, good practices and other levers to foster innovation.