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BW Businessworld

Innovation Champions

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For the second year running, Switzerland, Sweden, and Singapore lead in overall innovation performance while India remains a distant 64th, even behind its 2011 position of 62nd. This was the find of the Global Innovation Index 2012 (GII): Stronger Innovation Linkages for Global Growth, published by INSEAD eLab, a research centre at the leading international business school, and the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations.

The report ranks 141 countries/economies on the basis of their innovation capabilities and results. Alcatel-Lucent, Booz & Company, and the Confederation of Indian Industry (CII), as well as an Advisory Board of eleven international experts helped with the report.

The study shows that the dynamics of innovation continue to be affected by the emergence of new successful innovators, as seen by the range of countries across continents in the top twenty GII ranking, as well as the good performances of emerging countries such as Latvia, Malaysia, China, Montenegro, Serbia, Republic of Moldova, Jordan, Ukraine, India, Mongolia, Armenia, Georgia, Namibia, Viet Nam, Swaziland, Paraguay, Ghana, Senegal; and low-income countries Kenya and Zimbabwe.

While the list of overall GII top 10 performers changed little from last year — Switzerland, Sweden, and Singapore are followed in the top ten by Finland, the United Kingdom, the Netherlands, Denmark, Hong Kong (China), Ireland, and the United States of America.

India's poor ranking comes in contravention of a recent survey by KPMG which showed 13 per cent of the respondents thought India is capable of disruptive breakthroughs and being the next epicenter of innovation against 30 per cent of the respondents vouching for China and the US.

In fact, in a January 2012 survey, India was ranked the sixth most "innovative" country in the world in multinational conglomerate GE's Annual Global Innovation Barometer, driven by financial support from public authorities and long-term support from investors.

Canada is the only country leaving the top 10 this year, mirroring weakening positions on all main GII innovation input and output pillars. The report shows that the USA continues to be an innovation leader but also cites relative shortfalls in areas such as education, human resources and innovation outputs as causing a drop in its innovation ranking.

The study says there is a need for BRIC countries (Brazil, the Russian Federation, India, and China) to invest further in their innovation capabilities to live up to their expected potential. China's performance on the key knowledge and technology outputs pillar is outpaced only by Switzerland, Sweden, Singapore, and Finland. However, the report notes that both China and India have weaknesses in their innovation infrastructure and environment. The report also notes that Brazil has suffered the largest drop among the BRICs.

The report being one of the key indicators of innovation at the country level shows which countries are best in transforming given innovation inputs into innovation outputs. Countries which are strong in producing innovation outputs despite a weaker innovation environment and innovation inputs are poised to rank high in this "efficiency" index. In the Global Innovation Efficiency Index, China and India lead the top 10 league of countries. This shows that in spite facing challenges in the input side and being ranked 64 overall, India is well poised to adapt innovation in a big way, given the input side measures are reviewed and improved considerably. 

Comparing the overall GII scores to countries GDP per capita, the report identifies three groups of countries.

Innovation Leaders are high-income countries such as Switzerland, the Nordic countries, Singapore, UK, Netherlands, Hong Kong (China), Ireland, USA, Luxembourg, Canada, New Zealand, Germany, Malta, Israel, Estonia, Belgium, Republic of Korea, France, Japan, Slovenia, Czech Republic, and Hungary, which have succeeded in creating innovation ecosystems where investments in human capital thrive in fertile and stable innovation infrastructures favorable to knowledge, technology and creative outputs.

Innovation Learners  – middle-income countries –  includes 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 weaknesses in their innovation systems. They include a mix of high-income as well as middle-income countries as shown in the chart below.

Commenting on innovation in emerging economies like India, Chandrajit Banerjee, Director General, CII said, "Every country can aspire to be an innovation-driven economy. The more resource-constrained an economy is, the more prone to innovation it actually can be. Importantly, innovation is about acts which improve everyday lives and a journey towards faster-sustainable-inclusive-growth."