5. iii
Table of Contents
Contents
Preface: Stronger Innovation Linkages v Chapter 3: Academia-Industry Innovation Linkages in 89
for Global Growth the Case of Saudi Arabia: Developing a University-Industry
By Soumitra Dutta, Roland Berger Professor of Business and Triple-Helix Framework to Promote Research and
Technology, Academic Director, INSEAD eLab, INSEAD and Development Collaboration
Francis Gurry, Director General, World Intellectual Property By Khaled S. Al-Sultan and Dr. Iyad Alzaharnah, King Fahad
Organization University for Petroleum & Minerals of Saudi Arabia
Foreword: Embracing New Types of Partnerships vii Chapter 4: Accounting for Science-Industry 97
to Drive Open Innovation Collaboration in Innovation: Existing Metrics and
By Ben Verwaayen, Chief Executive Officer, Alcatel-Lucent Related Challenges
By Sacha Wunsch-Vincent, World Intellectual Property Organization
Foreword: The Coherence Premium in Innovation ix
By Cesare R. Mainardi, Chief Executive Officer, Booz & Company Chapter 5: The Role of Coherent Linkages in Fostering 109
Innovation-Based Economies in the Gulf Cooperation
Foreword: Why Innovation Linkages? xi Council Countries
Perspectives from an Emerging Economy By Barry Jaruzelski, Chadi N. Moujaes, Rasheed Eltayeb, Hadi Raad,
By Chandrajit Banerjee, Director General, Confederation of and Hatem A. Samman, Booz & Company
Indian Industry
Chapter 6: The Russian Federation: A New Innovation 121
Contributors to the Report xiii Policy for Sustainable Growth
By Leonid Gokhberg and Vitaly Roud, Higher School of Economics,
Advisory Board to the Global Innovation Index xv Russian Federation
Chapter 7: Shaping the National Innovation System: 131
Rankings The Indian Perspective
By Yagnaswami Sundara Rajan, Indian Space Research Organization
Global Innovation Index 2012 Rankings xviii Annex: Acronyms.........................................................................................................141
Chapter 8: An Integrated Policy Approach in 143
Chapters Science, Technology, and Innovation for Sustainable
Development: A UNESCO Idea in Action
Chapter 1: The Global Innovation Index 2012: 3 By Irina Bokova, UNESCO
Stronger Innovation Linkages for Global Growth
By Soumitra Dutta and Daniela Benavente, INSEAD; and Sacha Wunsch- Chapter 9: Broadband, Inevitable Innovation, 149
Vincent, World Intellectual Property Organization and Development
By Robert Shaw, ITU, and Bruno Lanvin, INSEAD eLab and Broadband
Annex 1: The Global Innovation Index Conceptual...............................43
Commission
Framework
Annex 2: Adjustments to the Global Innovation Index ......................67 Chapter 10: The Internet: An Unprecedented and 157
Framework and Year-on-Year Comparability of Results Unparalleled Platform for Innovation and Change
THE GLOBAL INNOVATION INDEX 2012
Annex 3: Statistical tests on the Global Innovation Index.................71 By Lynn St. Amour, Internet Society
By Michaela Saisana and Dionisis Th. Philippas, European
Commission Joint Research Centre (Ispra, Italy) Chapter 11: We Are All Content Creators Now: 163
Measuring Creativity and Innovation in the
Chapter 2: The Role of Public-Private Partnerships in 81 Digital Economy
Driving Innovation By Derek Slater and Patricia Wruuck, Google
By Louis Witters, Revital Marom, and Kurt Steinert, Alcatel-Lucent
6. iv
Contents
Appendices
Appendix I: Country/Economy Profiles 173
Appendix II: Data Tables 319
Appendix III: Sources and Definitions 409
Appendix IV: Technical Notes 427
Appendix V: About the Authors 433
THE GLOBAL INNOVATION INDEX 2012
8. vi
variables capture innovation linkages only imperfectly,
Preface
and improved metrics are sorely needed. The theme of
this year’s GII puts a spotlight on this important future
measurement agenda.
Continuing the journey for better innovation metrics
and policies
INSEAD began its journey to find better ways to mea-
sure innovation in 2007, increasingly helped by its
Knowledge Partners. WIPO joined INSEAD as one of
the Knowledge Partners in 2011 and is now co-publisher
of the GII. Over the years, the GII model has evolved
in response to our growing understanding of innovation
parameters. We take pride in continually adapting the
model to better ref lect the modern dynamics of innova-
tion and the better availability of data. The 2012 edition,
for instance, places greater emphasis on measuring econ-
omies’ ecological sustainability and online creativity.
We thank the GII’s Knowledge Partners—Alcatel-
Lucent, Booz & Company, and the Confederation of
Indian Industry—for bringing true enterprise perspec-
tives to our debates.
Last but not least, we welcome two new members
to our eminent Advisory Board who have greatly
strengthened its ranks: Sibusiso Sibisi, President and
Chief Executive Officer of the Council for Scientific
and Industrial Research in South Africa; and Rob Steele,
Secretary-General of the International Organization for
Standardization.
From the outset, we said that measuring innova-
tion, identifying its main drivers, and fostering adequate
policies would be a multi-year journey. INSEAD and
WIPO, along with our partners, look forward to con-
tinuing this journey.
Soumitra Dutta
Roland Berger Professor of Business and Technology and Academic Director
of eLab, INSEAD
Francis Gurry
Director General, World Intellectual Property Organization (WIPO)
THE GLOBAL INNOVATION INDEX 2012
9. foreword vii
Embracing New Types of Partnerships
Foreword
to Drive Open Innovation
We talk a great deal about innovation in the informa- many cases, this means working very differently than
tion and communication technologies (ICT) industry, they ever have before. It means forging much closer ties
where I have spent most of my career. When we speak between previously distinct sectors than ever before. It
about innovation we are generally talking about break- means sharing resources and responsibilities, depending
throughs, new technologies, and the companies that on others to do their part in the collaborative action,
bring them to market. and embracing these interdependencies. Alcatel-Lucent,
Breakthroughs are of course an important aspect with many others, does this in the GreenTouch con-
of innovation. Breakthroughs can reduce energy sortium, which is working to help reduce the energy
consumption, create new markets, introduce differ- consumption of telecommunications networks 1,000-
ent ways of doing things, generate new revenue, help fold by 2015.
people connect better, and help us solve problems in Partnering in this way is difficult. Many countries
areas as diverse as healthcare, agriculture, education, have sought to bring their educational, business, and
and transportation. But innovation is about much more NGO sectors together to address specific challenges.
than just technological breakthroughs. Increasingly it is Some have been successful, but just as often they have
about breakthroughs in collaboration—forming link- not: the often divergent motivations of these different
ages among different types of companies, industries, and organizations can lead to a mismatch of objectives,
public institutions to address challenges and opportuni- expectations, and approaches.
ties that reach far beyond the scope or capability of any But innovation is a crucial element of competitive-
individual organization. ness. For organizations, companies, and countries to
This notion of linkages and the collaborative models remain competitive and to grow, they must innovate,
needed to address our biggest challenges is the central and one of the ways they can accomplish this is through
theme of the 2012 edition of the Global Innovation Index broad collaboration. Given the challenges we face as a
(GII), which we are proud to support once again as a global community, we must find ways to partner more
Knowledge Partner. The 2012 GII explores the condi- effectively.
tions in which innovation f lourishes and documents The GII offers an opportunity to think through this
which countries are most successful in fostering those challenge. By shining a light on successful models of
conditions. The GII also looks at some of the ways old collaboration and innovation, and by documenting what
models of innovation are evolving, how new models has worked (or not) and where, the GII is contributing
are emerging, why they matter, and the impacts they to an absolutely critical conversation.
can have.
Chapter 2 of this report, contributed by colleagues Ben Verwaayen
Chief Executive Officer
at Alcatel-Lucent, explores how an ancient model of
Alcatel-Lucent
collaboration—the public-private partnership—is being
THE GLOBAL INNOVATION INDEX 2012
applied in novel ways to address some of the large-scale
challenges faced today. The reality is that no organiza-
tion—no government, company, research institution,
or nongovernmental organization (NGO)—by itself
can solve our biggest problems, such as the economic
crisis facing Europe or the massive emerging ecological
threats. They must partner. They must collaborate. In
10.
11. foreword ix
The Coherence Premium in
Foreword
Innovation
Booz & Company is honoured to contribute to The direction, and selling products or services that thrive
Global Innovation Index 2012 for a second consecu- within that system. When these three elements are
tive year. This is a critical element in our continuing aligned, a company can be described as coherent and can
effort to support businesses and governments in their move past the competition consistently and with ease.
development of innovation-led economies. For almost We recognize that coherence is as relevant and
a decade, Booz & Company’s annual Global Innovation critical for countries as it is for companies. Coherence
1000 study has ranked the top 1,000 public companies between innovation strategies and capabilities at the
by their research and development (R&D) spending and national level requires the stakeholders to be closely
has analysed how that spending inf luences their overall linked in an effective ecosystem. Developed economies
financial performance. Through this work, we continue must continue to strengthen and develop such linkages
to gain significant insight into the nature of innovation. to stay ahead in strategic sectors. At the same time,
It is clear that success in innovation is not just a blend of developing economies must institute a national model
quantitative elements such as the number of researchers, that establishes coherent linkages in their innovation
the amount that they receive in funding, and the number systems. This involves forging strong ties among all
of patents they file. Rather, the companies and countries stakeholders in the innovation ecosystem, encompassing
that have succeeded in establishing strong innovation policies, stakeholders, and operations. Key to this effort
cultures have also embraced qualitative success fac- is establishing an innovation-promotion entity that will
tors—they have developed coherent linkages between create and develop the necessary linkages, coordinate
their strategies and capabilities, and they nurture an policy, convene stakeholders, and drive the national
environment that supports innovation. agenda.
Our 2011 study The Global Innovation 1000: Why At Booz & Company, we believe that coherence
Culture Is Key shows that spending more on R&D is around key capabilities drives essential advantage.
not enough to create robust and sustainable innovative Coherent companies and, indeed, countries, wield a
enterprises. Instead, numerous elements comprise a truly clear set of capabilities aligned with their strategy
innovative company: a focused innovation strategy, a throughout their portfolio. Furthermore, both public
winning overall business vision, profound customer and private sectors have an important role to play in
insight, great talent, and the right set of capabilities—the increasing global welfare by developing coherent strate-
combination of processes, tools, knowledge, skills, and gies and linkages for innovation at both the firm and
organization—are needed to succeed. Importantly, cor- country-wide levels.
porate culture ties all those elements together, making
the ’secret sauce’ that makes innovative companies dif- Cesare R. Mainardi
Chief Executive Officer
ferent from their peers. The right culture of innovation
Booz & Company
guarantees a high degree of coherence between strate-
THE GLOBAL INNOVATION INDEX 2012
gies and capabilities or between a company’s aspirations
and its implementation.
A coherent capabilities-driven strategy is the key
to unlocking value creation on a reliable and sustained
basis. Three interlocking elements comprise this strat-
egy: pursuing a clear strategic direction, building a
system of differentiating capabilities consistent with that
12.
13. foreword xi
Why Innovation Linkages?
Foreword
Perspectives from an
Emerging Economy
Too often these days, any discussion on innovation and critical area and on inclusive growth. At the same time,
its linkages to growth and development is reduced to the government has prioritized a doubling of investment
the difficulties faced by economies in certain parts of in R&D over the next five years. The Indian National
the world over the last few years and the implications for Innovation Council (NIC) was established by the gov-
the global economy. There is an urgent need to broaden ernment in 2010 to discuss, analyse, and help implement
this discussion and to explore how innovation can be not strategies for inclusive innovation in India and prepare
only fostered and harnessed for growth but also how it a Roadmap for Innovation 2010–2020. Recently, for
can solve everyday problems, reduce poverty, and help example, the NIC has taken up the challenge of forg-
us attain a faster-sustainable-inclusive-growth-driven ing global collaborations through its Global Innovation
future. Roundtable Conference.
There is also a need to widen the perspective on the The government’s partnership with stakeholders
actors that are crucial in promoting innovation. Today’s provides the key to the success of its initiatives. The
innovation environment is broad and involves bilateral Confederation of Indian Industry (CII) has been work-
and multilateral collaborations in scientific and tech- ing with the industry, institutions, government and
nological research and development (R&D), cultural global organizations to strengthen innovation ecosystem
exchanges, sharing of best practices, open innovation in India. Many innovative initiatives based on public-
challenges, and other forms of linkages. private-partnership (PPP) mode have been launched
Such linkages must, however, energize and be ener- to implement and support innovations on the ground.
gized by the innovative and creative spirits inherent in One key initiative is formation of a not-for-profit PPP
every society and culture. In this context, India stands company named Global Innovation & Technology
as an example. With a large population and limited Alliance to support industrial R&D that converts global
resources, Indians must innovate to thrive, and this is high cost/high quality innovative technologies into cost
expressed in every strand of society: by those on the effective products those are affordable by and accessible
street; by grassroots innovators; by entrepreneurs; and to people.
by small, medium, and large companies. The theme of this year’s Global Innovation Index,
A specific instance is found in one of India’s big- which emphasizes innovation linkages in high- and
gest recent success stories: the mobile and ICT revolu- lower-income countries alike, is well suited for address-
tion. This revolution has enabled innovation in other ing the contemporary challenges of innovation. I take
spheres by connecting people throughout the country, this opportunity to thank INSEAD and the World
providing the means for optimization of ideas and their Intellectual Property Organization for bringing out
realization. The government, for example, is connect- this excellent work and to express my pleasure at CII’s
ing Indian panchayats (village administrations) through participation over the last four years as a Knowledge
fibre optic cables with the goal of transforming service Partner in this important initiative. I also congratulate
THE GLOBAL INNOVATION INDEX 2012
delivery in areas such as health, education, agriculture. the other Knowledge Partners for their continued sup-
This has truly provided an important means by which port and contribution to the report.
this Indian innovative spirit can be harnessed.
The government is keen to provide an enabling Chandrajit Banerjee
Director General
policy and institutional framework to promote innova-
Confederation of Indian Industry
tion. The President of India has declared 2010–2020
the ‘Decade of Innovation’ to focus attention on this
14.
15. contributors xiii
Contributors to the Report
Contributors
This report was developed under the general direction of Soumitra DUTTA DIRECT COLLABORATORS
(Editor) and Francis GURRY (Director General, World Intellectual Property Michaela SAISANA, Senior Researcher, Institute for the Protection and
Organization). It was prepared and coordinated by a core team comprising: Security of the Citizen, Joint Research Centre of the European Commission
Hope STEELE, Editor, Steele Editorial Services
core team Neil WEINBERG, Principal, Neil Weinberg Design
Soumitra DUTTA, Roland Berger Professor of Business and Technology,
INSEAD, and Academic Director of eLab, INSEAD data COLLABORATORS
Bruno LANVIN, Executive Director of eLab, INSEAD Alex CHISHOLM, Director, Statistical Analysis; and Hillary CHAN, Research
Daniela BENAVENTE, GII Lead Researcher and Project Manager, Analysis Associate Manager at the Graduate Management Admission
eLab, INSEAD Council (GMAC)
Sacha WUNSCH-VINCENT, Senior Economist, Economics and Janis KARKLINS, Assistant Director-General for UNESCO’s Communication
Statistics Division, WIPO and Information Sector, Martin SCHAAPER, Programme Specialist, Lydia
DELOUMEAUX, Assistant Programme Specialist, Luciana MARINS,
KNOWLEDGE PARTNERS Assistant Programme Specialist, UNESCO Institute for Statistics
Alcatel-Lucent Alex KOZAK, Policy Analyst, Google
Revital MAROM, Head of Market and Consumer Insight Sean MAC CURTAIN, Head, Conformity Assessment, International
Louis WITTERS, Director, Market and Consumer Insight Organization for Standardization (ISO)
Adelina MENDOZA, Senior Statistical Officer, Economic Research and
Kurt STEINERT, Director of Corporate Communications
Statistical Division, World Trade Organization (WTO)
Simon POULTER, Head of Media Relations
Ifigenia POULKA, Data and Applications Specialist, Thomson Reuters
Booz and Company Programme for International Student Assessment (PISA), Directorate for
Barry JARUZELSKI, Senior Vice President Education, Indicators and Analysis Division, Organisation for Economic
Karim M. SABBAGH, Senior Vice President Co-operation and Development (OECD)
Taylor REYNOLDS, Head; Piotr STRYSZOWSKI, Economist; and Frederic
Richard SHEDIAC, Senior Vice President
BOURASSA, Statistician, Information, Computer and Communication
Chadi N. MOUJAES, Vice-President
Policy Division, Directorate for Science, Technology and Industry, OECD
Rasheed ELTAYEB, Principal
Susan TELTSCHER, Head; and Esperanza MAGPANTAY, Statistician
Hadi RAAD, Principal
at the Market Information and Statistics Division, Telecommunication
Hatem A. SAMMAN, Director, The Ideation Center Development Bureau, International Telecommunication Union (ITU)
Karen TREANTON, Head of Energy Balances, Prices and Emissions Section,
Confederation of Indian Industry
Energy Statistics Division, International Energy Agency
Anjan DAS, Executive Director, Technology
Erik ZACHTE, Data Analyst, Wikimedia Foundation
Seema GUPTA, Director
Matthew ZOOK, Associate Professor at the University of Kentucky
Jibak DASGUPTA, Deputy Director
INSEAD
Shellie KARABELL, Director Media Relations & Knowledge
Sophie BADRE, Associate Director Media Relations
Shilpa DODDA, Research Programmer, eLab
THE GLOBAL INNOVATION INDEX 2012
Virginie BONGEOT-MINET, Centre Coordinator, eLab
WIPO
Carsten FINK, Chief Economist
Ryan LAMB, Statistical Analyst, Economics and Statistics Division
Liudmila KASHCHEEVA, Intern, Economics and Statistics Division
WIPO Communications Division
WIPO Printing & Publication Production Section
16.
17. advisory board xv
Advisory Board to the Global Innovation Index
Advisory Board
In 2011, an Advisory Board was set up to provide advice ADVISORY BOARD MEMBERS
Khalid S. Al-Sultan
on the research underlying the Global Innovation Index
Rector, King Fahad University for Petroleum & Minerals, Saudi Arabia
(GII), generate synergies at its stages of development, and
Daniele Archibugi
assist with the dissemination of its messages and results.
Research Director, Italian National Research Council (CNR), affiliated with
The Advisory Board is a select group of leading interna- the Institute on Population and Social Policy (IRPPS); and Professor of
tional practitioners and experts with unique knowledge Innovation, Governance and Public Policy, Department of Management,
and skills in the realm of innovation. Its members, while Birkbeck College, University of London
coming from diverse geographical and institutional Irina Bokova
backgrounds (international organizations, the public Director General of the United Nations Educational, Scientific and Cultural
sector, non-governmental organizations, business, and Organization (UNESCO)
academia), participate in their personal capacity. We Leonid Gokhberg
First Vice-Rector, Higher School of Economics (HSE), and Director, HSE
are grateful for the time and support provided by the
Institute for Statistical Studies and Economics of Knowledge, Russian
Advisory Board members.
Federation
In 2012, we welcomed two new members to the
Rolf-Dieter Heuer
Advisory Board: Sibusiso Sibisi and Rob Steele. Director General, European Organization for Nuclear Research (CERN)
Rolf Lehming
Director, Science and Engineering Indicators Program, National Science
Foundation (NSF), United States of America
Raghunath Anant Mashelkar
Bhatnagar Fellow, National Chemical Laboratory, Council of Scientific and
Industrial Research (CSIR); Chairperson, National Innovation Foundation;
and President, Global Research Alliance, India
Sibusiso Sibisi
President and Chief Executive Officer, Council for Scientific and Industrial
Research (CSIR), South Africa
Lynn St. Amour
President and Chief Executive Officer, Internet Society
Rob Steele
Secretary-General, International Organization for Standardization (ISO)
Hamadoun Touré
Secretary-General, International Telecommunication Union (ITU)
THE GLOBAL INNOVATION INDEX 2012
20. xviii
Global Innovation Index rankings
Rankings
Country/Economy Score (0–100) Rank Income Rank Region Rank
Switzerland 68.2 1 HI 1 EUR 1
Sweden 64.8 2 HI 2 EUR 2
Singapore 63.5 3 HI 3 SEAO 1
Finland 61.8 4 HI 4 EUR 3
United Kingdom 61.2 5 HI 5 EUR 4
Netherlands 60.5 6 HI 6 EUR 5
Denmark 59.9 7 HI 7 EUR 6
Hong Kong (China) 58.7 8 HI 8 SEAO 2
Ireland 58.7 9 HI 9 EUR 7
United States of America 57.7 10 HI 10 NAC 1
Luxembourg 57.7 11 HI 11 EUR 8
Canada 56.9 12 HI 12 NAC 2
New Zealand 56.6 13 HI 13 SEAO 3
Norway 56.4 14 HI 14 EUR 9
Germany 56.2 15 HI 15 EUR 10
Malta 56.1 16 HI 16 EUR 11
Israel 56.0 17 HI 17 NAWA 1
Iceland 55.7 18 HI 18 EUR 12
Estonia 55.3 19 HI 19 EUR 13
Belgium 54.3 20 HI 20 EUR 14
Korea, Rep. 53.9 21 HI 21 SEAO 4
Austria 53.1 22 HI 22 EUR 15
Australia 51.9 23 HI 23 SEAO 5
France 51.8 24 HI 24 EUR 16
Japan 51.7 25 HI 25 SEAO 6
Slovenia 49.9 26 HI 26 EUR 17
Czech Republic 49.7 27 HI 27 EUR 18
Cyprus 47.9 28 HI 28 NAWA 2
Spain 47.2 29 HI 29 EUR 19
Latvia 47.0 30 UM 1 EUR 20
Hungary 46.5 31 HI 30 EUR 21
Malaysia 45.9 32 UM 2 SEAO 7
Qatar 45.5 33 HI 31 NAWA 3
China 45.4 34 UM 3 SEAO 8
Portugal 45.3 35 HI 32 EUR 22
Italy 44.5 36 HI 33 EUR 23
United Arab Emirates 44.4 37 HI 34 NAWA 4
Lithuania 44.0 38 UM 4 EUR 24
Chile 42.7 39 UM 5 LCN 1
Slovakia 41.4 40 HI 35 EUR 25
Bahrain 41.1 41 HI 36 NAWA 5
Croatia 40.7 42 HI 37 EUR 26
Bulgaria 40.7 43 UM 6 EUR 27
Poland 40.4 44 HI 38 EUR 28
Montenegro 40.1 45 UM 7 EUR 29
Serbia 40.0 46 UM 8 EUR 30
Oman 39.5 47 HI 39 NAWA 6
Saudi Arabia 39.3 48 HI 40 NAWA 7
Mauritius 39.2 49 UM 9 SSF 1
Moldova, Rep. 39.2 50 LM 1 EUR 31
Russian Federation 37.9 51 UM 10 EUR 32
Romania 37.8 52 UM 11 EUR 33
Brunei Darussalam 37.7 53 HI 41 SEAO 9
South Africa 37.4 54 UM 12 SSF 2
Kuwait 37.2 55 HI 42 NAWA 8
Jordan 37.1 56 UM 13 NAWA 9
Thailand 36.9 57 UM 14 SEAO 10
Brazil 36.6 58 UM 15 LCN 2
Tunisia 36.5 59 UM 16 NAWA 10
THE GLOBAL INNOVATION INDEX 2012
Costa Rica 36.3 60 UM 17 LCN 3
Lebanon 36.2 61 UM 18 NAWA 11
Macedonia, FYR 36.2 62 UM 19 EUR 34
Ukraine 36.1 63 LM 2 EUR 35
India 35.7 64 LM 3 CSA 1
Colombia 35.5 65 UM 20 LCN 4
Greece 35.3 66 HI 43 EUR 36
Uruguay 35.1 67 UM 21 LCN 5
Mongolia 35.0 68 LM 4 SEAO 11
Armenia 34.5 69 LM 5 NAWA 12
Argentina 34.4 70 UM 22 LCN 6
Georgia 34.3 71 LM 6 NAWA 13
21. xix
Global Innovation Index rankings (continued)
Rankings
Country/Economy Score (0–100) Rank Income Rank Region Rank
Bosnia and Herzegovina 34.2 72 UM 23 EUR 37
Namibia 34.1 73 UM 24 SSF 3
Turkey 34.1 74 UM 25 NAWA 14
Peru 34.1 75 UM 26 LCN 7
Viet Nam 33.9 76 LM 7 SEAO 12
Guyana 33.7 77 LM 8 LCN 8
Belarus 32.9 78 UM 27 EUR 38
Mexico 32.9 79 UM 28 LCN 9
Belize 32.5 80 LM 9 LCN 10
Trinidad and Tobago 32.5 81 HI 44 LCN 11
Swaziland 32.0 82 LM 10 SSF 4
Kazakhstan 31.9 83 UM 29 CSA 2
Paraguay 31.6 84 LM 11 LCN 12
Botswana 31.4 85 UM 30 SSF 5
Dominican Republic 30.9 86 UM 31 LCN 13
Panama 30.9 87 UM 32 LCN 14
Morocco 30.7 88 LM 12 NAWA 15
Azerbaijan 30.4 89 UM 33 NAWA 16
Albania 30.4 90 UM 34 EUR 39
Jamaica 30.2 91 UM 35 LCN 15
Ghana 29.6 92 LM 13 SSF 6
El Salvador 29.5 93 LM 14 LCN 16
Sri Lanka 29.1 94 LM 15 CSA 3
Philippines 29.0 95 LM 16 SEAO 13
Kenya 28.9 96 LI 1 SSF 7
Senegal 28.8 97 LM 17 SSF 8
Ecuador 28.5 98 UM 36 LCN 17
Guatemala 28.4 99 LM 18 LCN 18
Indonesia 28.1 100 LM 19 SEAO 14
Fiji 27.9 101 LM 20 SEAO 15
Rwanda 27.9 102 LI 2 SSF 9
Egypt 27.9 103 LM 21 NAWA 17
Iran, Islamic Rep. 27.3 104 UM 37 CSA 4
Nicaragua 26.7 105 LM 22 LCN 19
Gabon 26.5 106 UM 38 SSF 10
Zambia 26.4 107 LM 23 SSF 11
Tajikistan 26.4 108 LI 3 CSA 5
Kyrgyzstan 26.4 109 LI 4 CSA 6
Mozambique 26.3 110 LI 5 SSF 12
Honduras 26.3 111 LM 24 LCN 20
Bangladesh 26.1 112 LI 6 CSA 7
Nepal 26.0 113 LI 7 CSA 8
Bolivia, Plurinational St. 25.8 114 LM 25 LCN 21
Zimbabwe 25.7 115 LI 8 SSF 13
Lesotho 25.7 116 LM 26 SSF 14
Uganda 25.6 117 LI 9 SSF 15
Venezuela, Bolivarian Rep. 25.4 118 UM 39 LCN 22
Mali 25.4 119 LI 10 SSF 16
Malawi 25.4 120 LI 11 SSF 17
Cameroon 25.0 121 LM 27 SSF 18
Burkina Faso 24.6 122 LI 12 SSF 19
Nigeria 24.6 123 LM 28 SSF 20
Algeria 24.4 124 UM 40 NAWA 18
Benin 24.4 125 LI 13 SSF 21
Madagascar 24.2 126 LI 14 SSF 22
Uzbekistan 23.9 127 LM 29 CSA 9
Tanzania, United Rep. 23.9 128 LI 15 SSF 23
Cambodia 23.4 129 LI 16 SEAO 16
Gambia 23.3 130 LI 17 SSF 24
THE GLOBAL INNOVATION INDEX 2012
Ethiopia 23.3 131 LI 18 SSF 25
Syrian Arab Rep. 23.1 132 LM 30 NAWA 19
Pakistan 23.1 133 LM 31 CSA 10
Côte d'Ivoire 22.6 134 LM 32 SSF 26
Angola 22.2 135 LM 33 SSF 27
Togo 20.5 136 LI 19 SSF 28
Burundi 20.5 137 LI 20 SSF 29
Lao PDR 20.2 138 LM 34 SEAO 17
Yemen 19.2 139 LM 35 NAWA 20
Niger 18.6 140 LI 21 SSF 30
Sudan 16.8 141 LM 36 SSF 31
Note: World Bank Income Group Classification (April 2012): LI = low income; LM = lower-middle income; UM = upper-middle income; and HI = high income. Regions are based on the United Nations Classification (20 September 2011):
EUR = Europe; NAC = Northern America; LCN = Latin America and the Caribbean; CSA = Central and Southern Asia; SEAO = South East Asia and Oceania; NAWA = Northern Africa and Western Asia; and SSF = Sub-Saharan Africa.
25. chapter 1 3
The Global Innovation Index 2012: Stronger Innovation Linkages for Global
1: The Global Innovation Index 2012
Growth
Daniela Benavente and S oumitra Dutta, INSEAD eLab
Sacha Wunsch-Vincent, WIPO
The global economic recovery is this downturn on innovation is com- Unmistakably, reductions or a
fragile and uneven across different plex and ambiguous, with large vari- streamlining of R&D expenditures
regions. ations across f irms, sectors, coun- in times of crisis does not have to
Most current economic forecasts tries, and regions. On the one hand, affect research output or innovations
by leading international economic crisis might stimulate new entrepre- if eff iciency is improved and less
institutions predict a slowdown neurial ventures and growth areas. promising projects are discontinued.
of gross domestic product (GDP) Past crises in the 1990s are said to Still, firms—in particular small and
growth throughout 2012 and an have generated new strings of inno- medium-sized enterprises (SMEs)—
uncertain recovery in 2013.1 Despite vative companies and may have put face greater diff iculties in tapping
some setbacks, growth remains rel- entire nations—such as Finland and external sources of funding to sup-
atively strong in most emerging- the Republic of Korea—on a new port their innovation investments
market economies. The situation in growth path.3 Countries that con- and to f inance new business ven-
high-income economies, however, tinue to invest in innovation despite tures. The access to venture capital is
is more precarious. Unemployment economically worsening conditions still severely depressed. The number
is high and growing in many of these are reaping the benef its of their of firm creations is down in coun-
countries. Full crisis recovery will efforts at some point. tries for which data are available.
take its time, and there are risks of On the other hand, true risks Importantly, research and
a renewed degradation of the eco- exist in terms of a negative effect on development (R&D) and innova-
nomic climate resulting in a pro- innovation expenditures and out- tion expenditures cannot often be
longed state of uncertainty. puts. Total and/or business R&D stopped and subsequently picked
In this context, the economic investments have declined as of 2008 up again simply when the economy
policy debate is placing renewed or 2009 in a significant number of recovers. Initial investments are
emphasis on achieving an appro- countries for which data are avail- sunk. Researchers deskill and PhD
priate policy framework that fosters able (for example, in Canada, Israel, students without funding go into
growth and employment while pro- Lithuania, Netherlands, Spain, other fields. Innovation that is post-
moting sustainable public finances. Sweden, and the United Kingdom, poned now will also not take place
As outlined in the Preface to this or UK).4 Moreover, the world’s later; there are hysteresis effects in
report, policies that promote inno- top R&D investors decreased their innovation.
vation and structural policies foster- R&D spending by 1.9% in 2009.5 Knowing the exact effects of the
ing long-term output growth should The crisis is expected to have slowed economic crisis on business innova-
feature prominently in these discus- the introduction of new products tion will take time. The questions
sions. Although innovation cannot or processes, primarily because of involved are too complex to be
cure the most immediate financial decreased demand and increased reduced to a blanket assessment of
THE GLOBAL INNOVATION INDEX 2012
diff iculties, it is a crucial element business uncertainty, including the effect of the economic slowdown
of sustainable growth. Forward- uncertainty about the size of the on the level and geography of inno-
looking measures are needed to lay future market. Large multinational vation. Moreover, such an assess-
the foundations for future prosperity. firms responsible for a large share of ment is premature and data to fully
The economic crisis is affecting business R&D have recently accu- assess the impacts are only emerging.
not only investments but also the cli- mulated large cash stocks that are not Also, as part of their stimulus
mate for innovation.2 The effect of being reinvested. packages, in 2009 and onwards most
26. 4
governments have pledged to avoid In the policy debate and the liter- so by introducing and discussing rel-
1: The Global Innovation Index 2012
cutbacks in science and R&D or even ature, emphasis is put on the increas- evant metrics that are complemented
increase spending.6 Ideally, spending ingly collaborative nature of inno- by substantive chapters that analyse
measures decided by governments vative processes. Such collaboration this theme in the context of partic-
need to marry short-term demand has been facilitated as innovation ular country settings (Chapter 3 on
stimulus with longer-lasting growth processes have become more frag- Saudi Arabia, Chapter 5 on the Golf
objectives. Most governments have mented and ‘open’.7 As studied in Cooperation Council, Chapter 6 on
also identified financial or structural several chapters of this publication, the Russian Federation, and Chapter
policies to foster new employment the role of the Internet more gener- 7 on India) and with a focus on sci-
and growth in areas such as research, ally has been crucial in introducing ence-industry linkages (Chapters 4
the health sector, transport, and the changes to the innovation process and 8), public-private partnerships
environment. There is now a need to and to related outputs.8 Markets for (Chapter 2), and the role of informa-
monitor and assess how and whether technologies that allow for knowl- tion and communication technolo-
these stimulus measures have been edge diffusion have added a further gies and the Internet (Chapters 8, 9,
implemented and to determine the boost to collaboration.9 and 10).
impacts on short-term demand and Accordingly, in the last decades
longer-term economic foundations in high- and middle-income coun-
and the society more broadly. This tries alike, various national strate- The rationale for the Global Innovation
applies to programmes decided in gies have aimed to improve the link- Index
2009 and to those that are in the ages between the various innovation The GII project was launched by
offing. actors, most notably the science sys- INSEAD in 2007 with the simple
To support these debates, to tem and higher education, the gov- goal of determining how to f ind
guide polices, and to highlight good ernment, the private sector, and metrics and approaches to better
practices, metrics are required to increasingly also the not-for-profit capture the richness of innovation
assess innovation and related policy sector such as philanthropies and in society and go beyond such tradi-
performance. For this purpose the nongovernmental organizations. tional measures of innovation as the
GII is timely and relevant. The measurement agenda has number of research articles and the
evolved to address the systemic dimen- level of R&D expenditures.13
sion of innovation10—that is, the activ- There were several motivations
Stronger innovation linkages for global ities of multiple innovation actors for setting this goal. First, innova-
growth and linkages among them.11 The tion is important for driving eco-
The theme of this year’s GII report, challenge is to detect and quantify nomic progress and competitive-
‘Stronger innovation linkages for the dynamic and often informal ness—both for developed and devel-
global growth’, underlines the nature of linkages and their efficacy. oping economies. Many govern-
importance of productive interac- This policy and measurement ments are putting innovation at the
tions among innovation actors— ambition is far from being impor- centre of their growth strategies.
firms, the public sector, academia, tant only to advanced economies. It Second, there is awareness that the
and society—in modern innovation is also critical in most low- and mid- definition of innovation has broad-
ecosystems (see also Chapter 4 of this dle-income country contexts, where ened—it is no longer restricted to
report). innovation linkages are, on average, R&D laboratories and to published
More and more attention is weaker than in high-income coun- scientific papers. Innovation could
focused on the interplay of institu- tries. Furthermore, low- and mid- be and is more general and horizontal
tions and the interactive processes dle-income countries have been in nature, and includes social inno-
in the creation, application, and dif- the source of incremental innova- vations and business model innova-
THE GLOBAL INNOVATION INDEX 2012
fusion of knowledge, human capi- tion.12 One challenge is to appro- tions as well. Last but not least, rec-
tal, and technology. In particu- priately quantify the extent of this ognizing and celebrating innovation
lar, the transfer of scientific results type of innovation and the required in emerging markets is seen as criti-
and inventions and their application linkages. cal for inspiring people—especially
to societal challenges in high- and Yet again, the GII intends to the next generation of entrepreneurs
lower-income countries alike is gar- contribute to the policy and mea- and innovators.
nering attention. surement debate on linkages. It does
27. 5
The GII helps to create an envi- An inclusive perspective on innovation Furthermore, the process of
1: The Global Innovation Index 2012
ronment in which innovation factors The GII adopts a broad notion of innovation has undergone signif i-
are under continual evaluation, and innovation, originally presented in cant change. Investment in innova-
it provides a key tool and a rich data- the Oslo Manual developed by the tion-related activity has consistently
base of detailed metrics for refining European Communities and the intensified at the firm, country, and
innovation policies. OECD:14 global levels, adding new innovation
The GII is not meant to be the actors from outside high-income
An innovation is the implementation of a
ultimate and definitive ranking of economies and also nonprofit actors.
new or significantly improved product (good
nations with respect to innovation. The structure of knowledge produc-
or service), a new process, a new marketing
Measuring innovation outputs and tion activity is more complex and
method, or a new organizational method in
impacts remains diff icult; hence geographically dispersed than ever.
business practices, workplace organization,
great emphasis is placed on mea- A key challenge is to find metrics
or external relations.
suring the climate and infrastruc- that capture innovation as it happens
ture for innovation and on assessing This def inition ref lects the in the world today.16 Direct official
related outcomes. evolving nature of the way inno- measures that quantify innovation
Although the end results take the vation is perceived and understood outputs remain extremely scarce.17
form of several rankings, the GII is over the last two decades.15 For example, there are no off icial
more concerned with improving the Previously, economists and pol- statistics on the amount of innova-
‘ journey’ to better measuring and icy makers focused on R&D-based tive activity—defined as the num-
understanding innovation, and with technological product innovation, ber of new products, processes, or
identifying targeted policies, good largely produced in-house and other innovations—for any given
practices, and other levers to foster mostly in manufacturing industries. innovation actor, let alone for any
innovation. The rich metrics can This type of innovation is performed given country. Most measures also
be used by individual countries— by a highly educated labour force struggle to appropriately capture the
either at the level of the index and in R&D-intensive companies. The innovation outputs of a wider spec-
sub-indices or at the level of individ- process leading to such innovation trum of innovation actors, such as
ual variables, such as ‘the number of was conceptualized as closed, inter- the services sector, public entities,
patent applications by resident’—to nal, and localized. Technological and so on.
monitor performance over time and breakthroughs were necessarily The GII aims to move beyond
to benchmark developments against ‘radical’ and took place at the ‘global the mere measurement of such sim-
other countries in the same region or knowledge frontier’. This character- ple innovation metrics. This requires
of the same income group. ization also implied the existence of the integration of new variables,
As a result, and drawing on the leading and lagging countries with with a trade-off between the qual-
expertise of the GII’s Knowledge low- or middle-income economies ity of the variable on the one hand
Partners and the prominent only catching up. and achieving good country cover-
Advisory Board, the GII model is Today, innovation capability is age on the other hand.
continually updated to ref lect the seen more as the ability to exploit The timeliest indicators are
improved availability of statistics and new technological combinations and used for the GII. About 35% of data
our understanding of the meaning embraces the notion of incremental obtained is from 2011, 35% from
and implications of innovation. This innovation and ‘innovation without 2010, 21% from 2009, and the small
year particular emphasis is placed on research’. Non-R&D-innovative remainder—for certain particular
avoiding f lawed year-on-year com- expenditure is an important compo- variables or low-income countries—
parisons by estimating the impact nent of reaping the rewards of tech- from earlier years.18 This gives the
in the rankings of changes in per- nological innovation. GII good coverage of the years where
THE GLOBAL INNOVATION INDEX 2012
formance on particular indicators, There is also an increasing inter- the economic crisis attained its ini-
adjustments to the GII framework, est in understanding how innova- tial peak, when innovation expen-
and/or the inclusion of additional tion takes place in low- and middle- ditures were most severely affected,
economies in the rankings. income countries and an awareness and when stimulus programmes
that incremental forms of innovation were decided and meant to be put
can impact development. into action.
28. 6
Figure 1: Framework of the Global Innovation Index 2012
1: The Global Innovation Index 2012
Global Innovation Index
(average)
Innovation Efficiency Index
(ratio)
Innovation Input Innovation Output
Sub-Index Sub-Index
Human Knowledge and
capital and Market Business technology Creative
Institutions research Infrastructure sophistication sophistication outputs outputs
Political Knowledge Knowledge Creative
environment Education ICT Credit workers creation intangibles
Regulatory Tertiary General Innovation Knowledge Creative goods
environment education infrastructure Investment linkages impact and services
Business Research & Ecological Trade & Knowledge Knowledge Online
environment development sustainability competition absorption diffusion creativity
That said, the time coverage the latest research on the measure- the simple average of the first
does not allow us to capture more ment of innovation. This year the five pillar scores.
medium-term effects of the crisis or GII model includes 141 economies,
2. Innovation Output Sub-Index:
the stimulus programmes on inno- which represent 94.9% of the world’s
Innovation outputs are the
vation, some impacts of which might population and 99.4% of the world’s
results of innovative activities
be very long-term (e.g., expen- GDP (in current US dollars).
within the economy. There are
ditures on education and public The GII relies on two sub-
two output pillars: (6) Knowl-
R&D). Moreover, the renewed set- indices: the Innovation Input Sub-
edge and technology outputs19
back of the global economy in the Index and the Innovation Output
and (7) Creative outputs. The
second half of 2011 and the current Sub-Index, each built around pil-
Innovation Output Sub-Index is
set-backs to the world economy, as lars. Four measures are calculated
the simple average of the last two
well as possible new spending mea- (Figure 1):
pillar scores. Although the Out-
sures are not accounted for. These
1. Innovation Input Sub-Index: put Sub-Index includes only two
effects will naturally be at the heart
Five input pillars capture ele- pillars, it has the same weight in
of future GIIs.
THE GLOBAL INNOVATION INDEX 2012
ments of the national economy calculating the overall GII scores
that enable innovative activities: as the Input Sub-Index.
The GII conceptual framework
(1) Institutions, (2) Human capital
The GII is an evolving project that 3. The overall GII score is the
and research, (3) Infrastructure,
builds upon previous editions of the simple average of the Input and
(4) Market sophistication, and
index while incorporating newly Output Sub-Indices.
(5) Business sophistication. The
available data and that is inspired by
Innovation Input Sub-Index is
