1. 3The Worlds Top Innovators 2008-2009

2. The Global Innovation Rankings and Report 2008-2009The Worlds Top Innovators 2008-2009 This research design and preparation of the Global Innovation Index 08/09 report was supervised by Professor Soumitra Dutta of INSEAD. The assistance of Amir Ullah Khan, Aarti Bharadwaj and Tiksha Kaul with the research analysis and George Skaria with the writing of the report is gratefully acknowledged. More details on the Global Innovation Index 08/09 can be downloaded from the online site: http://elab.insead.edu. Comments can be sent to Professor Dutta at his email address: soumitra.dutta@insead.edu 2009 INSEAD All Rights Reserved 4 3. ContentsPreface2 Case Studies 47In Search of Innovation Excellence Countries At The Cutting Edge Of Innovation Finland :Towards A Futuristic Society Sweden : The Quest For New KnowledgeForeword 3 South Korea :How Knowledge Power Helped CreateThe Innovation Imperative An Economic Powerhouse Qatar :Integrated Vision Sets OfKensaku KonishiMultiplier Effect In SocietyPresident & CEO, Canon India Private Limited Japan: A New Blueprint For ScienceAnd Innovation India: Weaving Grassroots InnovationThe Worlds Top Innovators 2008-2009 5With Emerging Global RealitiesOver the last two quarters, the global economicenvironment has undergone a tectonic shift: hit by The Worlds Top Innovators 2008-2009multiple shocks of the mortgage crisis, financialAppendix I 57crunch, rising inflation and slowdown, the economic Methodology For Computingoutlook worldwide has turned uncertain. In such a The Global Innovation Indexbackdrop, the rationale for releasing this second GlobalInnovation Index (GII) and Report at this particulartime has never been more compelling. Brought out bythe worlds business school INSEAD in collaborationAppendix II60with Indias leading industry and business association,Definition And Sourcesthe Confederation of Indian Industry (CII), as in thefirst edition, the 2008/2009 years report is the mostcomprehensive assessment of innovationthis timecovering 130 nations.Country Profiles 691 4. The Global Innovation Rankings and Report 2008-2009 Preface In Search of Innovation Excellence I n recent years, the world has witnessed the power of innovation and its various constituents in revolutionizing the business and economic landscape. With the advancement of the knowledge economy, the world is also seeing how innovation empowers individuals, communities and countries with profound impact on business, politics, and society. What is equally evident is the increasing role that innovation plays in accelerating economic growth and promoting development. Therefore, more than ever, in the current global economic situation, policy makers and business leaders recognize the need to create an enabling environment to support the adoption of innovation and spread their benefits across all sectors of society. The importance of innovation readiness, especially at theThe Worlds Top Innovators 2008-2009 national level, has achieved prominence on the public policy agenda, with the realization that the right policies, inputs and enabling environment can help countries fulfill their national potential and enable a better quality of life for their citizens. Recognizing the key role of innovation as a driver of growth and prosperity, this year the Confederation of Indian Industry jointly with INSEAD and supported by Canon India , has brought out The Global Innovation Index and Report 2008. This Report evaluates the progress of innovation readiness in countries, highlighting the obstacles that prevent governments, businesses, and individuals from fully capturing the benefits of innovation. Confederation of Indian Industry (CII), has over the years, taken a pioneering role in building a culture of innovation in Indian industry and society. It is our belief that the only way for Indian industry to have sustainable and inclusive growth is to go for innovation. With this belief, a number of initiatives have been taken in the area of innovation. To make a successful plan and roadmap for action in the area of innovation, we need to align the measurement gauge with similar benchmark practices adopted globally. Against this backdrop that CII along with INSEAD is pleased to present the Global Innovation Index and Report 2008. The Global Innovation Index 2008 ranks countries on parameters like Institution and Policy, Human Capacity, Infrastructure, Technological Sophistication and Business Markets etc to arrive at a global ranking for nations on innovation using the methodology developed by Professor Soumitra Dutta, INSEAD. The GII Report 20082009, the second in the series, presents the latest findings and highlights the best policies and practices for promoting innovation readiness. The Report offers a comprehensive snapshot and this year covers a record number of 130 economies. Also included in the Report is an extensive section on country profiles covering over 90 indicators looking at different aspects of innovation. We hope that the Report will come to be recognized as an authoritative benchmarking instrument and an invaluable tool for facilitating public-private dialogue, whereby policy makers, business leaders, and other stakeholders can evaluate progress on a continual basis. 2 5. ForewordThe Innovation ImperativeT he Global Innovation Index and Report 2008 could not have been released at a more relevant timewhen the global economy is witnessing unprecedented economic shifts. In my opinion, it is intimes like that these that the full benefits of innovation and technology can be reaped by countries andcompanies, even to the extent of emerging better winners when the financial crisis ebbs.With increasing number of countries and industries adopting innovation, the discussion now focuses noton if but on how best we can get the best results so as to maximize the benefits to business and society.Canon founded in 1937 has over the course of its 70-year history built values that have contributed toglobal DNA including an emphasis on technology and innovation, good governance and the building ofThe Worlds Top Innovators 2008-2009a sustainable society. Canon India Pvt. Ltd., set up in 1997 currently has offices in 7 cities across Indiaemploying over 500 people By implementing a mindset focusing on total optimization and profit, Canonglobally has made great strides through reforms targeting such areas as production, development andinnovation. It is in this overall context that Canon is pleased to sponsor The Global Innovation Index andReport 2008.Clearly, some parts of the world are more innovation friendly than others. In developing nations, thisability will have a dramatic impact not only on the global economy but also on the quality of life formillions as we begin to share widely the economic and social benefits of globalisation. Even in developednations of Asia, Europe and North America, I believe we are only at the beginning of whats possible usinginnovation.Different types of organizations and companies in various stages of innovation are at the forefront,investing in technology, research and development and innovation to create and maintain competitiveadvantage. We are truly in the midst of a transition where innovation as an enabler will have a profoundimpact on the ways in which people live and work. But this transition is not inevitable and therefore bestpractices and conditions must be put in place to create such an environment. In order for this to occur,characteristics as defined by the eight pillars of the Global Innovation Index (GII) must be put in place.We hope the GII and the Report 2008 will help you to benchmark where we stand and provide us all withgreater insight on how we can create a better world to live.Sincerely,Kensaku KonishiPresident & CEOCanon India Private Limited3 6. The WorldsTop Innovators2008-2009 The Worlds Top Innovators 2008-2009Over the last two quarters, the global economic environmenthas undergone a tectonic shift: hit by multiple shocks of themortgage crisis, financial crunch, rising inflation and slowdown,the economic outlook worldwide has turned uncertain.In such a backdrop, the rationale for releasing this second GlobalInnovation Index (GII) and Report at this particular time hasnever been more compelling. Amid the prospect of prolongeddeceleration of economic growth, it is more important than everto understand the strong contribution innovation can make togrowth and productivity. At a time when economic growth isstalling in many parts of the world, the latest GII and Reportreiterates that the use and application of innovation tools,techniques and strategies by countries can be one of the mostpowerful engines to keep the economies on even keel and evenmove towards faster recovery. In short, when the financial stormabates, countries that innovate, looking beyond the immediateconcerns will be better prepared for the next few decades.The Global Innovation Index 2007, which was the first and mostcomprehensive assessment of the innovation capabilities of itskind, was released in January 2007, when the global economywas flush with growth momentum and expectations. Thisyear, however, we present the second in the series, the GlobalInnovation Index and Report 2008-2009, against the backdropof a completely different picture marked by heighteneduncertainty in the global economy. 5 7. The Global Innovation Rankings and Report 2008-2009 Brought out by the worlds business school INSEAD in Thanks to the Internet, cheaper air travel and improved collaboration with Indias leading industry and business patenting procedures, access to the latest technology has association, the Confederation of Indian Industry (CII), asbecome universal. Today, few firms can feel secure behind their in the first edition, the 2008/2009 years report is the mostestablished brands, long-standing customer relationships, and comprehensive assessment of innovationthis time coveringproprietary technology or tariff barriers. 130 nations.Countries that innovate in the creation of technologies and Using a wide array of data and maintaining the previousencourage their adoption grow faster. This fact is being methodology, the findings of this section (the analysis) recognised by governments worldwide and is being reflected are presented under six broad headings: an overview andin their national policies. Long-term economic growth introduction to the concept and practice of innovation, thedepends on the creation and fostering of an environment that model and unique framework of innovation used in this Index, encourages innovation. Thats the main driver for productivity detailed results of the findings, lessons from innovations at theand economic growth. bottom of the pyramid from various parts of the world, in- depth case studies of six countries and conclusions. Innovation is the amalgamation of invention and creativity thatleads to the generation of social and economic value. In the The entire report on the other hand, is broadly divided into fourdeveloping world, there are many instances where innovation parts. The first consists of messages and the preface; the secondhas occurred, and is occurring. This is a mere beginning. TheThe Worlds Top Innovators 2008-2009 is the detailed analysis; the third part consists of the rankings of global economy is large and there are considerable opportunities the 130 countries; and finally, there are the country profiles ofas the world embarks on a path of rapid, sustainable and those that have been surveyed and ranked.inclusive growth. Taken together, these sections give the reader a deeperOver the years, through its own research, INSEAD has understanding of the innovation environment in a nation. examined the many factors enabling national economies to The analysis, data and tables are designed to serve as a achieve sustained and higher innovation capabilities. The goal guide to national leaders as they craft the appropriate policy has been to provide benchmarking tools for business leaders framework to enable individuals, businesses, and governments and policymakers to identify obstacles to improved innovation to fully capture the benefits of innovation. Recognising the and competitiveness and stimulate discussion on strategies to importance of benchmarking performance and disseminating overcome them. This time and earlier in 2007, INSEAD based best practices, this Report monitors the progress of innovationits innovation analysis on the Global Innovation Index (GII) over the years in various parts of the world, and also reveals and Framework, a highly comprehensive index for measuring the obstacles that prevent countries from fully capturing theglobal innovation, which captures the microeconomic and benefits of innovation and the power of knowledge. macroeconomic parameters and variables. We hope that with this second edition of the GII and the Report, In the emerging global order, knowledge and intellectual skills we have contributed to the establishment of a process forare critical to create and improve products and services, develop benchmarking progress in innovation throughout the world.more efficient distribution and marketing methods and ensurecustomer satisfaction. New ways of information management The Compelling Imperative For Innovation and application are used to improve competitiveness. A Innovation takes many forms. A decade ago, companies saw knowledge economy is not about accumulating information, survival and growth in terms of restructuring, lowering costsbut using knowledge to improve performance. And that and raising the quality of their goods and services. Since then, performance can be enhanced with innovation. This has commoditisation, privatisation and deregulation have swept become the driving force behind expanding global commerce the world from the advanced economies of the United States,and rise in manufactured goods.. Japan and Europe to the rapidly emerging markets of the Asia-The history of human progress is also a history of innovation. Pacific rim and Latin America.And this can now be translated to give a spurt to the global 6 8. economy. Consider the US. For two decades, the worlds largest Can we pin down ways in which innovation can be quantifiedand most advanced economy has been driving forward the to generate meaningful comparisons? The principal objectivefrontiers of technical progress. Yet, be it information technology of this report is therefore to understand the circumstances that(IT), pharmaceuticals or biotechnology, the US knows it must breed innovative thoughts and their application, leading to thecontinue to innovate to stay ahead. So too must all economies, generation of social and economic value in economies.large and small, which have been transformed, thanks to therole they play in the global innovation chain. A Holistic Framework and Overall Results Over the past few years, there have been many attempts toOr consider China and India whose recent space ventures are a measure the comparative levels of innovation in nations. Thesereminder not only of their re-emergence as global powers, but of efforts and the sheer diversity of the organisations conductingtheir history of technological advancements. Today, both these them only help underscore the importance of innovation notcountries also have communication firms to rival the best, and only as a key factor contributing to a nations development buthave invested in nanotechnology and biotechnology research. also as a cohesive force in a nations globalisation process. TheAs global competition intensifies and innovation becomes speed with which technological and knowledge forces affect usmore important, the business sector has been internationalisingand the rapidity of the ensuing changes requires a mechanismknowledge-intensive corporate functions, including R&D.for measurement that not only accounts for factors enablingAt the same time, companies are increasingly opening their the inculcation of innovation and ideas but that also explicitly considers the roles played by the major stakeholders involved. The Worlds Top Innovators 2008-2009innovation processes and collaborating with external partnerslike suppliers, customers and universities. Most prior approaches to measuring innovation in economiesInnovation is not just about generating new ideas. It is about tend to focus on specific metrics such as number of patentstranslating these ideas into value-added products and services.registered, number of articles published in research journalsThis requires flexibility of attitude and a willingness to adapt and percentage of GDP spending on R&D. While useful,and welcome unprecedented levels of change on the part of allthese metrics are narrow in scope and do not reflect the factstakeholders involved: individuals, organisations and society. that innovation has become horizontal today. Innovation is noAnd there has to be the correct environment for this innovationlonger restricted to the vertical structures of R&D laboratoriesto flourish. This includes institutions, laws, infrastructure, and universities. Innovation comes in different shapes and takesmindsets, incentives and culture.the form of marketing innovations (e.g., the success of Swatch watches), business model innovations (e.g., the success of eBayIts important to provide a safety net to innovators. They mustfor person to person trading) and even social innovations (e.g.,be empowered to experiment and fail. A `succeed or perish the proliferation of social networks). So a broader approachenvironment often kills innovative ideas in the nascent stages asto measuring innovation is needed and this is one of the keypeople will be too intimidated to take creative risks that could assumptions behind the approach used in this study.fail. Any society must therefore institute adequate measures toshield unsuccessful innovators from the enormous social andA countrys readiness is linked to its ability to garner the besteconomic costs of failure. from leading-edge technologies, expanded human capacities, better organisational and operational capabilities and improvedInnovation is not the mere domain of large corporations. institutional performance. This report brings togetherSometimes, it works best when like-minded individuals come indicators to measure innovation performance, which takestogether in small collectives, irrespective of political and into account all and more of the above factors in the form ofcultural differences and work on projects that yield value for the Global Innovation Index (GII). Using this framework, theall parties involved. No wonder in recent years, innovationworlds best-and worst-performing economies are ranked onhas pushed itself to the very top of policy-making and seniortheir innovation capabilities, which provide insights into theexecutive agendas. strengths and weaknesses of countries in innovation-related policies and practices.So who is doing it best? What are the best conditions for it?7 9. The Global Innovation Rankings and Report 2008-2009 The framework of the GII is based upon the following The GII helps business leaders and public policymakers to principles:investigate the reasons leading to a nations innovation rankingand relative performance. It captures key factors relating to the 1. There is a distinction between inputs and outputs while eight pillars and can be used to understand the performance ofmeasuring innovation in an economy. Inputs are aspectsa nation or even a region with regards to innovation capabilities.that enable an economy to stimulate innovative and outputsThe pillar performance rankings also serve to identify key areasare the results of innovative activities within the economy.where a nation is under- or over-performing. 2. There are five input pillars that are included in the GII:While rankings are useful as relative indicators of a nationsInstitutions and Policies, Human Capacity, General andinnovation capability, there are several limitations to theICT Infrastructure, Markets Sophistication and Businessanalytical process. For example, countries ranked closelySophistication. The input pillars define aspects of thetogether can show very small variation in index scores.conducive environment required to stimulate innovationFurther, small differences in the index may be outside thewithin an economy.limits of statistical importance.In the final analysis, only 130 3. There are three output pillars which provide evidence ofcountries were considered from a larger universe because ofthe results of innovation within the economy: Knowledge limitations in the availability of data from and insufficient dataCreation, Competitiveness and Wealth Creation.for a significant portion of the variables from reliable sources.Inferences drawn on the current rankings should be done withThe Worlds Top Innovators 2008-2009 Figure 1 presents a graphical view of the GII. The overall this kept in mind. measure of innovativeness of an economy is obtained by taking a simple average of the scores along the input and output pillars. Results Overview Each of the pillars is defined by several variables. The choiceThe GII 2008/2009 final rankings (see Table 1) show that this of the variables is influenced by available data from reputedtime also the global leader in innovation continues to be the international organizations such as the World Economic Forum,US. This comes partly as no surprise, as the US with a legacy of the World Bank and the International Telecommunicationsover 100 years in innovation, has been consistent in taking the Union. In particular, a combination of qualitative and leaders slot. Germany follows in second position, maintaining quantitative data is used for the computation of the GII. Theits position from last year. Sweden rises to 3rd rank this year qualitative data is obtained from the Executive Opinion Survey,from 12th in 2007. The United Kingdom falls from 3rd to 4th a global CEO survey conducted by the World Economic Forum. slot. Singapore rises to 5th rank this year from 7th the previous The quantitative data comes from other international agencies. year. But it is South Korea that consolidates its position the most Further details on the computational procedure for the GII are by grabbing 6th rank, up from 19th position last year. Japan provided in Appendix 1.moves down to 9th position (as compared to 4th in the lastrankings) and France slips to the 19th position from 5th ranklast year. The others in the top ten rankings are Switzerland,Denmark and Netherlands which are ranked 7th, 8th and 10threspectively.Of note also are:Finland which at 13th rank has maintained its position inthe overall rankings;Taiwan ranked 16th, which has performed much betterthan some of the other economies in the region; 8 10. Table 1:GII 2008/2009 Overall RankingsCountry2008-09 Rank Country 2008-09 RankUnited States 5.281 Bahrain3.5934Germany 4.992 Slovakia 3.5935Sweden4.843 Slovenia 3.5936United Kingdom4.824 China3.5937Singapore 4.815 Malta3.5438Korea, South4.736 Chile3.5139Switzerland 4.737 Portugal 3.4940Denmark 4.698 India3.4441Japan 4.659 Lithuania3.4342Netherlands 4.6410South Africa 3.4143Canada4.6311Thailand 3.4044Hong Kong 4.5912Cyprus 3.3945 The Worlds Top Innovators 2008-2009Finland 4.5713Tunisia3.3746Norway4.4714Hungary3.3447Austria 4.4615Costa Rica 3.2748Taiwan4.4116Indonesia3.2649Luxembourg4.3717Brazil 3.2550Belgium 4.3518Turkey 3.2451France4.3519Oman 3.2352Iceland 4.3420Barbados 3.1753Ireland 4.3021Greece 3.1754Australia 4.2722Jordan 3.1655Israel4.1723Poland 3.1556Qatar 4.1224Azerbaijan 3.1457Malaysia4.0625Sri Lanka3.1258United Arab Emirates3.9926Uzbekistan 3.1159New Zealand 3.9727Latvia 3.1060Spain 3.8128Mexico 3.0661Estonia 3.6929Croatia3.0362Kuwait3.6630Philippines2.9963Italy 3.6531Vietnam2.9764Saudi Arabia3.6532Trinidad and Tobago2.9665Czech Republic3.6433Mauritius2.9566* The maximum score in the tables is 7 9 11. The Global Innovation Rankings and Report 2008-2009 Table 1: GII 2008/2009 Overall RankingsCountry2008-09RankCountry2008-09 RankPanama 2.9467 Benin 2.4199Russia 2.9368 Uganda2.38 100Romania2.9269 Venezuela 2.37 101Nigeria2.9170 Mauritania2.34 102Montenegro 2.9071 Guyana2.34 103Kazakhstan 2.8572 Armenia 2.34 104Jamaica2.8573 Mongolia2.32 105Bulgaria 2.8574 Cameroon2.31 106Colombia 2.8475 Bosnia and Herzegovina2.30 107Egypt2.8376 Algeria 2.29 108Botswana 2.8177 Ecuador 2.28 109Kenya2.8178 Suriname2.28 110The Worlds Top Innovators 2008-2009Ukraine2.7779 Bangladesh2.27 111Uruguay2.7780 Tajikistan2.27 112Guatemala2.7781 Madagascar2.26 113Morocco2.7682 Nicaragua 2.22 114Honduras 2.7683 Burkina Faso2.22 115Argentina2.7484 Moldova 2.21 116Peru 2.7485 Cambodia2.18 117Tanzania 2.6686 Paraguay2.16 118Gambia, The2.6387 Libya 2.13 119El Salvador2.6188 Ethiopia2.13 120Macedonia2.6089 Albania 2.11 121Senegal2.5990 Kyrgyzstan2.09 122Dominican Republic 2.5791 Bolivia 2.05 123Serbia 2.5792 Nepal 2.04 124Pakistan 2.5593 Mozambique2.02 125Syria2.5594 Zimbabwe1.97 126Namibia2.5295 Cape Verde1.93 127Zambia 2.4896 Lesotho 1.93 128Mali 2.4697 Timor-Leste 1.89 129Georgia2.4498 Burundi 1.81 130 10 12. Table 2: Overall Input Pillars IndexInnovationInnovation CountryRank CountryRankInput Index Input Index Denmark5.73 1 Slovenia4.1434 United States5.72 2 Czech Republic4.1235 Sweden 5.64 3 Slovakia4.1036 United Kingdom 5.60 4 Lithuania 4.0737 Singapore5.60 5 South Africa4.0638 Switzerland5.59 6 Tunisia 4.0139 Canada 5.48 7 Barbados4.0140 Korea, South 5.45 8 Thailand3.9841 Hong Kong5.45 9 Cyprus3.9742 Germany5.45 10Kuwait3.9143 Finland5.36 11Saudi Arabia3.9144 The Worlds Top Innovators 2008-2009 Netherlands5.31 12Hungary 3.8945 Australia5.21 13Italy 3.8846 Japan5.18 14China 3.8547 Austria5.17 15Jordan3.8248 Iceland5.16 16India 3.8249 Israel 5.08 17Latvia3.8050 Norway 5.05 18Turkey3.7251 New Zealand5.03 19Costa Rica3.7052 Taiwan 5.03 20Greece3.6553 Belgium5.00 21Brazil3.6454 Ireland4.99 22Panama3.6455 France 4.92 23Oman3.6356 Luxembourg 4.84 24Croatia 3.5957 Malaysia 4.65 25Sri Lanka 3.5958 Estonia4.60 26Poland3.5859 Bahrain4.46 27Jamaica 3.5760 Spain4.40 28Mexico3.5761 Qatar4.37 29Mauritius 3.5662 Malta4.30 30Indonesia 3.5563 United Arab Emirates 4.30 31Montenegro3.4864 Chile4.28 32Azerbaijan3.4265 Portugal 4.26 33Vietnam 3.426611 13. The Global Innovation Rankings and Report 2008-2009 Table 2: Overall Input Pillars IndexInnovation InnovationCountry RankCountryRankInput IndexInput IndexUzbekistan3.41 67 Algeria 2.8399Colombia3.41 68 Bosnia and Herzegovina2.83 100Bulgaria3.37 69 Mali2.83 101Trinidad and Tobago 3.37 70 Macedonia 2.82 102Romania 3.37 71 Guyana2.82 103Honduras3.35 72 Benin 2.81 104Uruguay 3.34 73 Venezuela 2.80 105Kenya 3.32 74 Armenia 2.78 106Egypt 3.32 75 Moldova 2.74 107Russia3.30 76 Suriname2.69 108Morocco 3.29 77 Tajikistan2.68 109The Worlds Top Innovators 2008-2009Botswana3.28 78 Albania 2.65 110Guatemala 3.28 79 Nicaragua 2.65 111Philippines 3.27 80 Madagascar2.64 112Kazakhstan3.26 81 Burkina Faso2.62 113Ukraine 3.23 82 Ecuador 2.60 114Gambia, The 3.23 83 Bangladesh2.59 115Namibia 3.22 84 Mauritania2.57 116Nigeria 3.21 85 Kyrgyzstan2.56 117Peru3.18 86 Cambodia2.56 118Pakistan3.12 87 Paraguay2.56 119El Salvador 3.10 88 Ethiopia2.56 120Argentina 3.09 89 Cameroon2.50 121Dominican Republic3.08 90 Zimbabwe2.49 122Serbia3.01 91 Mozambique2.42 123Tanzania2.98 92 Nepal 2.40 124Georgia 2.98 93 Libya 2.40 125Syria 2.97 94 Bolivia 2.37 126Senegal 2.96 95 Timor-Leste 2.21 127Zambia2.92 96 Lesotho 2.14 128Mongolia2.89 97 Burundi 2.11 129Uganda2.86 98 Cape Verde1.99 130 12 14. Table 3: Overall Output Pillars IndexInnovationInnovation CountryRank CountryRank Output IndexOutput Index United States 4.841 India 3.0534 Germany 4.542 Slovenia3.0435 Japan 4.123 Indonesia 2.9636 Sweden4.054 New Zealand 2.9137 United Kingdom4.045 Azerbaijan2.8638 Singapore 4.026 Brazil2.8639 Korea, South4.017 Costa Rica2.8440 Netherlands 3.968 Oman2.8441 Luxembourg3.899 Thailand2.8242 Norway3.8910Cyprus2.8243 Qatar 3.8811Uzbekistan2.8144 The Worlds Top Innovators 2008-2009 Switzerland 3.8612Hungary 2.7945 Taiwan3.7913Lithuania 2.7946 France3.7814Malta 2.7947 Finland 3.7715Estonia 2.7848 Canada3.7716Turkey2.7649 Austria 3.7417South Africa2.7550 Hong Kong 3.7418Chile 2.7351 Belgium 3.7019Bahrain 2.7352 United Arab Emirates3.6920Tunisia 2.7353 Denmark 3.6421Portugal2.7354 Ireland 3.6122Philippines 2.7255 Iceland 3.5223Poland2.7256 Malaysia3.4724Greece2.6857 Italy 3.4325Sri Lanka 2.6658 Kuwait3.4226Nigeria 2.6259 Saudi Arabia3.3927Russia2.5660 Australia 3.3428Trinidad and Tobago 2.5561 China 3.3329Mexico2.5562 Israel3.2630Vietnam 2.5263 Spain 3.2231Jordan2.4964 Czech Republic3.1732Romania 2.4865 Slovakia3.0933Croatia 2.466613 15. The Global Innovation Rankings and Report 2008-2009 Table 3: Overall Output Pillars IndexInnovationInnovationCountry RankCountry Rank Output IndexOutput IndexKazakhstan2.44 67 Pakistan 1.9899Argentina 2.40 68 Ecuador1.97 100Latvia2.40 69 Bangladesh 1.96 101Macedonia 2.38 70 Venezuela1.94 102Tanzania2.35 71 Georgia1.91 103Egypt 2.34 72 Uganda 1.91 104Barbados2.34 73 Armenia1.89 105Mauritius 2.34 74 Madagascar 1.89 106Botswana2.34 75 Suriname 1.87 107Montenegro2.33 76 Cape Verde 1.87 108Ukraine 2.32 77 Tajikistan 1.87 109The Worlds Top Innovators 2008-2009Bulgaria2.32 78 Libya1.86 110Peru2.30 79 Guyana 1.86 111Kenya 2.29 80 Namibia1.82 112Colombia2.28 81 Burkina Faso 1.81 113Guatemala 2.26 82 Nicaragua1.80 114Panama2.24 83 Cambodia 1.80 115Morocco 2.22 84 Bosnia and Herzegovina 1.77 116Senegal 2.22 85 Paraguay 1.77 117Uruguay 2.20 86 Algeria1.75 118Honduras2.16 87 Mongolia 1.74 119Syria 2.13 88 Bolivia1.73 120Serbia2.13 89 Lesotho1.71 121Jamaica 2.12 90 Ethiopia 1.70 122El Salvador 2.11 91 Moldova1.69 123Mauritania2.11 92 Nepal1.67 124Cameroon2.11 93 Mozambique 1.62 125Mali2.10 94 Kyrgyzstan 1.62 126Dominican Republic2.07 95 Albania1.58 127Zambia2.05 96 Timor-Leste1.56 128Gambia, The 2.04 97 Burundi1.50 129Benin 2.01 98 Zimbabwe 1.46 130 14 16. Israel and Qatar, at 23rd and 24th positions, respectively,capitalise on innovation. In contrast, Germany shows a reverse have maintained their reputations as technology-savvy andpattern scoring relatively low on the input pillars (10th) and innovation-friendly countries in the Middle East.very high on the output pillars (2nd), leading to an overall rankof 2nd in the GII tables. Japan shows a pattern similar to thatTables 2 and 3 provide the overall ranks on the input and outputof Germany. Ranked relatively lower along the input pillarspillars and they provide additional, interesting insights. The(16th), Japan comes in at an impressive 3rd position along theUnited States presents a balanced profile - coming in at top of the output pillars. Clearly, Germany and Japan are able to leverageoverall GII tables by scoring high along both the input (ranked their less favourable innovation environments (as compared to2nd) and output (ranked 1st) pillars. However, the same cannotDenmark and the USA) into more effective innovation results.be said for all the other top performers. While Denmark comes There could be useful lessons to learn from them.at top position with an overall score of 5.73 along the differentinput pillars, it ranks relatively low at position 21st position alongAmong the top ten countries on the input pillars, two arethe output pillars, This pulls the overall GII rank of Denmarkfrom North America USA (2nd) and Canada (7th); five fromdown to 8th and raises questions about why despite creating a Europe Denmark (1st), Sweden (3rd), United Kingdom (4th),highly conducive environment for innovation, it is not able toSwitzerland (6th) and Germany (10th); and three from Asia Table 4: High and Low Income CountriesThe Worlds Top Innovators 2008-2009High Income CountriesSub-region RegionInnovation Input IndexInnovation Output IndexGII 2008-09AmericaOECD5.604.314.95 OECD5.003.674.34Rest of Europe Non-OECD3.972.823.39East Asia andOECD5.143.464.30PacificNon-OECD5.363.854.61Middle EastNon-OECD4.363.463.91 OECD5.253.814.53All Non-OECD4.563.383.97All4.903.594.25Low Income CountiresSub-region RegionInnovation Input IndexInnovation Output IndexGII 2008-09America 2.65 1.802.22East and South Sub Saharan Africa 2.701.86 2.28AfricaEast Asia and 3.10 2.262.68PacificEastern Europe2.97 2.122.55and Central AsiaSouth Asia2.98 2.172.57 Sub Saharan Africa 2.842.13 2.48West Africa Sub Saharan Africa 2.771.99 2.38All 2.87 2.062.4715 17. The Global Innovation Rankings and Report 2008-2009 Singapore (5th), South Korea (8th) and Hong Kong (9th).manage regulations, and respond to citizens concerns. The The pattern is similar across the output pillars but there are institutional framework in a country can make or break some differences. Amongst the top ten countries for the output innovation. While a certain level of regulation is required pillars we find one from North America USA (1st); six from for the functioning of the economy, if mismanaged, it acts as Europe Germany (2nd), Sweden (4th), United Kingdom (5th),a deterrent to innovation and innovators. The adaptability of Netherlands (8th), Luxembourg (9th) and Norway (10th); and various social, political and economic institutions of a country three from Asia Japan (3rd), Singapore (6th) and South Korea to change can also make a difference in the way innovation is (7th). Conspicuous by their absence from the top ten lists are absorbed there. Policy-making must allow for risk-taking and countries from Latin America, Middle East and Africa.be amenable to entrepreneurial failures. Thats the only wayto encourage more and more people to engage in innovative Comparing the ranks this time with that of 2007, in the Superthinking and experimentation with new ideas. Governments League, that is, among the top 10 ranks, the leads are in fact which enact and enforce fair and open procedures, protect real narrowing down between countries. While last time, the US wasand intellectual property rights, regulate markets efficiently, and unique in being consistently among the top eight performers in lower the burden of regulations are more likely to see higher all the measures in the Global Innovation Index (GII), it haslevels of innovative entrepreneurial activity. Since the new that distinction in only five areas this time. Additionally, it is millennium reform efforts have been underway to create more first on the pillar rankings in only three areas: human capacity,market-friendly economies, stimulated in many instances by business markets and competitiveness. This should be cause joining the World Trade Organization, or signing internationalThe Worlds Top Innovators 2008-2009 for concern for the USA as the qualitative data from Americanintellectual property treaties and other trade agreements. CEOs were collected by the World Economic Forum around summer 2008, before the start of the sharp economic downturn It is significant that eight out of the top 10 countries in the in the USA. It is possible that the data collected next year willrankings in this pillar are from Europe. Singapore (2nd) from be more pessimistic and will further reduce Americas lead and the Asian region and Canada (10th) are two other countries in perhaps even threaten its leading position.the top ranking. Their high rankings are a remarkable testimonyto the leadership and phenomenal development of the three The GII results show that innovation is correlated with income Nordic countries of Finland (1st), Denmark (3rd) and Sweden levels in a country. For example, the innovation levels in the (5th), which have consistently done well in the development OECD countries are much more than non-OECD countries.of institutions and policies that nurture innovation. Finland, The high income countries do significantly better by topping for example, has put most of the ingredients of a futuristic innovation rankings and the average innovation index ofnetworked society in place by focusing on innovation, education the high income countries is 4.25 (see Table 4). The average and IT. Unlike the rest of Europe, it scores very highly on human innovation index falls with the income levels of the country. Thecapacity and on institutions and policies. Finland was also the average of the innovation index of the low income countries is first country in the world to conceive of the idea of a national 2.47.innovation system to feed into policy formulation. Leadershipcomes from the very top. Finlands investment in R&D, at 3.4% Pillar Performancesof GDP, is one of the highest in the world. Tables 5 and 6 depict the ranks of the countries included in this report along the individual input and output pillars. More details Taking some of the variables that comprise this pillar to get on the pillars, their constituent variables and the computationa deeper insight, it becomes evident, for example that the top of scores for the pillars are given in Appendix 1. three countries with the shortest time to launch a new businessare Australia (7.00), Canada (6.99) and Belgium (6.98) followed Input Pillarsclosely by Singapore and Iceland. Similarly, for dealing withlicenses, the countries with the shortest spans reported are Institutions and PoliciesSouth Korea (7.00), Finland (6.97) and the United States (6.96). The Institution pillar reviews a countrys overall political The lowest in this scale are Zimbabwe (1.00), Cambodia (2.59) stability, effectiveness of its government to implement laws,and Russia (2.62). This result has an important implication 16 18. Table 5: Input Pillar Rank: Institutions CountryInstitutions Rank CountryInstitutions Rank Finland 6.19 1 Portugal4.55 33 Singapore 6.14 2 Malaysia4.52 34 Denmark 6.12 3 Jordan4.48 35 Switzerland 6.10 4 Slovenia4.48 36 Sweden6.00 5 Spain 4.47 37 Iceland 5.94 6 Taiwan4.43 38 Germany 5.82 7 Malta 4.42 39 Austria 5.70 8 Uzbekistan4.40 40 Luxembourg5.68 9 Lithuania 4.39 41 Canada5.66 10South Africa4.22 42 New Zealand 5.55 11Mauritius 4.21 43 United Kingdom5.55 12India 4.19 44 The Worlds Top Innovators 2008-2009 Netherlands 5.53 13Tunisia 4.16 45 Norway5.50 14Czech Republic4.14 46 Ireland 5.43 15Senegal 4.10 47 Australia 5.41 16Slovakia4.10 48 United States 5.40 17Hungary 4.09 49 Hong Kong 5.38 18Botswana4.08 50 Korea, South5.25 19Sri Lanka 4.05 51 Belgium 5.23 20Mali4.04 52 Japan 5.20 21Kenya 4.01 53 Israel5.19 22Cyprus4.00 54 France5.18 23Latvia3.99 55 United Arab Emirates5.10 24China 3.99 56 Bahrain 5.04 25Honduras3.98 57 Estonia 5.04 26Italy 3.98 58 Gambia, The 4.94 27Thailand3.97 59 Saudi Arabia4.93 28Morocco 3.96 60 Qatar 4.70 29Namibia 3.96 61 Barbados4.69 30Greece3.91 62 Chile 4.65 31Kuwait3.91 63 Oman4.58 32Costa Rica3.90 6417 19. The Global Innovation Rankings and Report 2008-2009 Table 5: Input Pillar Rank: InstitutionsCountryInstitutions RankCountryInstitutions RankMauritania 3.8765 Tajikistan3.40 98Syria3.8666 Vietnam 3.38 99Nigeria3.8567 Algeria 3.35100Pakistan 3.8268 Dominican Republic3.30101Tanzania 3.8269 Cameroon3.28102Ethiopia 3.8270 Indonesia 3.27103Benin3.7971 Armenia 3.26104Montenegro 3.7872 Russia3.22105Turkey 3.7173 Guyana3.19106Panama 3.6974 Nicaragua 3.19107Egypt3.6875 El Salvador 3.17108Zambia 3.6776 Cape Verde3.17109The Worlds Top Innovators 2008-2009Mexico 3.6777 Peru3.16110Croatia3.6678 Burundi 3.15111Madagascar 3.6579 Mozambique3.10112Uruguay3.6580 Ukraine 3.09113Guatemala3.6281 Ecuador 3.02114Azerbaijan 3.6182 Kyrgyzstan3.00115Uganda 3.5983 Mongolia3.00116Philippines3.5884 Macedonia 2.94117Kazakhstan 3.5885 Cambodia2.93118Colombia 3.5686 Nepal 2.91119Bulgaria 3.5487 Albania 2.90120Jamaica3.5188 Paraguay2.85121Poland 3.4689 Bangladesh2.84122Burkina Faso 3.4690 Bosnia and Herzegovina2.78123Georgia3.4391 Argentina 2.67124Trinidad and Tobago3.4392 Venezuela 2.67125Romania3.4393 Bolivia 2.64126Serbia 3.4394 Zimbabwe2.62127Moldova3.4295 Suriname2.62128Brazil 3.4096 Libya 2.54129Timor-Leste3.4097 Lesotho 2.28130 18 20. Table 5: Input Pillar Rank: Human Capacity Country Human Capacity Rank Country Human Capacity Rank United States5.92 1 South Africa 4.44 34 Denmark5.72 2 Estonia4.43 35 Korea, South 5.68 3 Sri Lanka4.39 36 Switzerland5.52 4 Brazil 4.39 37 United Kingdom 5.50 5 China4.33 38 Canada 5.43 6 Slovenia 4.32 39 Singapore5.42 7 Czech Republic 4.32 40 Sweden 5.37 8 Spain4.25 41 Germany5.13 9 Portugal 4.24 42 Belgium5.12 10Lithuania4.23 43 Japan5.12 11Hungary4.21 44 Netherlands5.08 12Poland 4.15 45 The Worlds Top Innovators 2008-2009 Finland5.07 13Saudi Arabia 4.13 46 Israel 5.06 14Malta4.13 47 Austria5.05 15Russia 4.09 48 Taiwan 5.03 16Turkey 4.07 49 Australia4.97 17Mexico 4.06 50 Malaysia 4.96 18Slovakia 4.04 51 Ireland4.91 19Jamaica4.04 52 Kuwait 4.81 20Italy4.03 53 Norway 4.80 21Trinidad and Tobago3.99 54 New Zealand4.76 22Jordan 3.97 55 Indonesia4.76 23Colombia 3.96 56 France 4.68 24Cyprus 3.96 57 Tunisia4.66 25Luxembourg 3.94 58 Hong Kong4.63 26Argentina3.90 59 Chile4.62 27Kazakhstan 3.90 60 India4.55 28Oman 3.89 61 United Arab Emirates 4.53 29Croatia3.88 62 Costa Rica 4.52 30Greece 3.86 63 Thailand 4.49 31Ukraine3.85 64 Qatar4.48 32Panama 3.84 65 Iceland4.45 33Egypt3.83 6619 21. The Global Innovation Rankings and Report 2008-2009 Table 5: Input Pillar Rank: Human CapacityCountry Human CapacityRankCountryHuman Capacity RankLatvia 3.83 67Georgia 3.24 99Barbados 3.83 68Venezuela 3.23100Vietnam3.82 69Guyana3.18101Azerbaijan 3.80 70Nicaragua 3.14102Philippines3.76 71Moldova 3.13103Mongolia 3.75 72Benin 3.12104Bahrain3.73 73Kyrgyzstan3.11105Suriname 3.69 74Albania 3.10106Morocco3.67 75Gambia, The 3.06107Guatemala3.66 76Cambodia3.05108Kenya3.66 77Tanzania3.03109Botswana 3.64 78Senegal 3.02110The Worlds Top Innovators 2008-2009Namibia3.64 79Bangladesh2.96111Bulgaria 3.64 80Mali2.96112Syria3.62 81Pakistan2.96113Nigeria3.60 82Zambia2.95114Romania3.59 83Bolivia 2.92115Honduras 3.58 84Lesotho 2.90116Uruguay3.55 85Bosnia and Herzegovina2.89117Peru 3.54 86Ecuador 2.88118Libya3.53 87Paraguay2.84119Uzbekistan 3.53 88Serbia2.83120Algeria3.52 89Ethiopia2.78121Mauritius3.52 90Madagascar2.78122Dominican Republic 3.34 91Cameroon2.74123Armenia3.33 92Mozambique2.71124Uganda 3.32 93Burkina Faso2.69125El Salvador3.32 94Mauritania2.54126Montenegro 3.31 95Nepal 2.51127Tajikistan 3.28 96Burundi 2.49128Macedonia3.27 97Timor-Leste 2.47129Zimbabwe 3.26 98Cape Verde2.32130 20 22. Table 5: Input Pillar Rank: General and ICT InfrastructureGeneral and ICT General and ICT CountryRank CountryRank InfrastructureInfrastructure Denmark 5.721 Qatar 3.8234 Hong Kong 5.662 Lithuania 3.6935 Sweden5.593 Malaysia3.6836 Switzerland 5.524 Bahrain 3.6637 Taiwan5.495 Slovakia3.6538 Netherlands 5.476 Czech Republic3.5939 Iceland 5.447 Greece3.5840 Germany 5.358 Croatia 3.5041 United Kingdom5.349 Hungary 3.4942 United States 5.2510Montenegro3.4843 Korea, South5.2111Latvia3.4144 The Worlds Top Innovators 2008-2009 Canada5.1712Russia3.4045 Japan 5.1613Chile 3.3846 Singapore 5.0814Kuwait3.3547 Finland 5.0215China 3.3148 Luxembourg4.9816Turkey3.2749 Norway4.9517Brazil3.2550 France4.9118Thailand3.2451 Austria 4.9119Poland3.1752 Australia 4.8220Saudi Arabia3.1553 Israel4.7121Bulgaria3.1454 Belgium 4.6122Tunisia 3.0955 Estonia 4.2823Romania 3.0956 Spain 4.2824Jamaica 3.0557 Barbados4.2425Jordan3.0358 Slovenia4.1826Mexico3.0059 New Zealand 4.1727Mauritius 2.9560 Malta 4.0628Uruguay 2.9461 Portugal4.0529Ukraine 2.9362 Italy 4.0130Macedonia 2.8363 United Arab Emirates4.0131Argentina 2.8164 Ireland 3.9132Trinidad and Tobago 2.7565 Cyprus3.8633Bosnia and Herzegovina2.736621 23. The Global Innovation Rankings and Report 2008-2009 Table 5: Input Pillar Rank: General and ICT Infrastructure General and ICT General and ICTCountry RankCountryRankInfrastructureInfrastructureVietnam2.71 67Albania 2.1799Oman 2.70 68Armenia 2.15 100Colombia 2.69 69Botswana2.13 101Costa Rica 2.68 70Libya 2.08 102Egypt2.68 71Kyrgyzstan2.03 103Azerbaijan 2.67 72Namibia 1.99 104El Salvador2.63 73Nigeria 1.94 105Morocco2.63 74Suriname1.93 106Venezuela2.59 75Mali1.93 107India2.53 76Tanzania1.92 108Syria2.53 77Senegal 1.91 109The Worlds Top Innovators 2008-2009Algeria2.49 78Kenya 1.88 110Dominican Republic 2.48 79Paraguay1.85 111Panama 2.48 80Benin 1.83 112Serbia 2.47 81Nicaragua 1.81 113Kazakhstan 2.46 82Bolivia 1.79 114Honduras 2.44 83Zambia1.76 115Moldova2.40 84Cambodia1.75 116Indonesia2.40 85Uganda1.71 117Georgia2.39 86Mauritania1.69 118Guatemala2.38 87Bangladesh1.69 119Guyana 2.33 88Cameroon1.68 120South Africa 2.33 89Burkina Faso1.66 121Philippines2.30 90Nepal 1.64 122Peru 2.29 91Zimbabwe1.61 123Sri Lanka2.28 92Madagascar1.61 124Ecuador2.25 93Lesotho 1.47 125Tajikistan 2.22 94Mozambique1.46 126Uzbekistan 2.20 95Timor-Leste 1.45 127Pakistan 2.19 96Ethiopia1.41 128Gambia, The2.18 97Burundi 1.38 129Mongolia 2.17 98Cape Verde1.17 130 22 24. Table 5: Input Pillar Rank: Market SophisticationMarketMarket CountryRankCountry Rank SophisticationSophistication Hong Kong6.33 1Malta 4.31 34 United Kingdom 6.21 2Montenegro4.19 35 United States5.95 3Qatar 4.15 36 Bahrain5.92 4Thailand4.11 37 Canada 5.71 5Czech Republic4.08 38 Singapore5.66 6India 4.07 39 New Zealand5.62 7Latvia4.07 40 Ireland5.53 8Lithuania 4.01 41 Australia5.51 9Cyprus3.99 42 Germany5.36 10 Hungary 3.97 43 Sweden 5.28 11 Tunisia 3.95 44 The Worlds Top Innovators 2008-2009 Israel 5.26 12 Italy 3.84 45 Korea, South 5.24 13 China 3.84 46 Netherlands5.24 14 Turkey3.84 47 Denmark5.23 15 Indonesia 3.80 48 South Africa 5.17 16 Slovenia3.77 49 Malaysia 5.12 17 United Arab Emirates3.75 50 Japan5.12 18 Peru3.74 51 Spain5.09 19 Greece3.72 52 France 5.05 20 Saudi Arabia3.71 53 Finland5.05 21 Mexico3.70 54 Belgium4.97 22 Romania 3.70 55 Switzerland4.90 23 Trinidad and Tobago 3.70 56 Luxembourg 4.84 24 Namibia 3.69 57 Austria4.81 25 Kuwait3.68 58 Chile4.76 26 Serbia3.68 59 Slovakia 4.68 27 Poland3.68 60 Taiwan 4.65 28 Jordan3.67 61 Norway 4.59 29 Botswana3.66 62 Iceland4.54 30 Mauritius 3.64 63 Estonia4.44 31 El Salvador 3.58 64 Portugal 4.44 32 Kenya 3.58 65 Panama 4.43 33 Honduras3.57 6623 25. The Global Innovation Rankings and Report 2008-2009 Table 5: Input Pillar Rank: Market SophisticationMarketMarketCountry RankCountry Rank SophisticationSophisticationJamaica 3.5567Morocco 2.80 99Bulgaria3.5368Ukraine 2.77100Nigeria 3.5269Nepal 2.74101Vietnam 3.5070Uganda2.72102Barbados3.4971Uzbekistan2.72103Croatia 3.4872Zimbabwe2.69104Bosnia and Herzegovina3.4773Suriname2.67105Azerbaijan3.4274Guyana2.65106Sri Lanka 3.4175Venezuela 2.62107Colombia3.3776Moldova 2.61108Dominican Republic3.3677Albania 2.59109The Worlds Top Innovators 2008-2009Uruguay 3.3678Ecuador 2.58110Costa Rica3.3379Mozambique2.49111Pakistan3.3280Burkina Faso2.48112Brazil3.3281Kyrgyzstan2.47113Oman3.2882Benin 2.38114Georgia 3.2783Bolivia 2.37115Kazakhstan3.1984Cambodia2.32116Guatemala 3.1885Algeria 2.28117Egypt 3.1686Senegal 2.26118Zambia3.1387Mauritania2.16119Tanzania3.1288Cameroon2.13120Bangladesh3.1189Madagascar2.11121Paraguay3.1090Lesotho 2.09122Philippines 3.0591Ethiopia2.09123Macedonia 2.9492Mali2.06124Nicaragua 2.9393Timor-Leste 2.01125Mongolia2.9294Syria 1.92126Argentina 2.8895Tajikistan1.84127Gambia, The 2.8596Cape Verde1.60128Russia2.8497Libya 1.53129Armenia 2.8298Burundi 1.50130 24 26. Table 5: Input Pillar Rank: Business Sophistication Business Business CountryRank Country Rank Sophistication Sophistication United States6.07 1 Thailand4.09 34 Sweden 5.95 2 Costa Rica4.04 35 Switzerland5.91 3 Portugal4.04 36 Korea, South 5.87 4 Lithuania 4.03 37 Denmark5.86 5 Cyprus4.02 38 Singapore5.71 6 Slovakia4.01 39 Germany5.58 7 Chile 4.00 40 Taiwan 5.54 8 Jordan3.97 41 Finland5.48 9 Bahrain 3.95 42 Iceland5.47 10Slovenia3.95 43 Canada 5.46 11Spain 3.93 44The Worlds Top Innovators 2008-2009 United Kingdom 5.43 12Brazil3.86 45 Norway 5.42 13Kuwait3.82 46 Austria5.40 14Sri Lanka 3.81 47 Australia5.32 15Barbados3.79 48 Japan5.32 16China 3.77 49 Hong Kong5.25 17India 3.75 50 Netherlands5.23 18Panama3.75 51 Israel 5.17 19Turkey3.71 52 Ireland5.16 20Latvia3.70 53 Belgium5.08 21Hungary 3.69 54 New Zealand5.06 22Jamaica 3.69 55 Malaysia 4.98 23Vietnam 3.68 56 Estonia4.80 24Oman3.67 57 Luxembourg 4.77 25Philippines 3.66 58 France 4.76 26Saudi Arabia3.62 59 Qatar4.68 27Azerbaijan3.62 60 Malta4.59 28Guatemala 3.54 61 Czech Republic 4.46 29Indonesia 3.52 62 Uzbekistan 4.20 30Italy 3.52 63 Tunisia4.19 31Ukraine 3.50 64 South Africa 4.13 32Senegal 3.50 65 United Arab Emirates 4.11 33Mauritius 3.49 66 25 27. The Global Innovation Rankings and Report 2008-2009 Table 5:Input Pillar Rank: Business SophisticationBusiness BusinessCountry RankCountry RankSophistication SophisticationKenya 3.47 67 El Salvador 2.78 99Colombia3.46 68 Cambodia2.75100Croatia 3.43 69 Guyana2.72101Poland3.42 70 Cameroon2.70102Mexico3.42 71 Ethiopia2.68103Morocco 3.41 72 Serbia2.66104Pakistan3.33 73 Tajikistan2.64105Egypt 3.24 74 Montenegro2.63106Uruguay 3.23 75 Mongolia2.61107Kazakhstan3.19 76 Mauritania2.58108Greece3.17 77 Georgia 2.55109The Worlds Top Innovators 2008-2009Peru3.17 78 Suriname2.54110Honduras3.17 79 Algeria 2.53111Argentina 3.15 80 Albania 2.48112Mali3.14 81 Armenia 2.34113Nigeria 3.12 82 Bangladesh2.34114Gambia, The 3.11 83 Mozambique2.34115Zambia3.07 84 Libya 2.33116Madagascar3.05 85 Bosnia and Herzegovina2.29117Bulgaria3.02 86 Ecuador 2.25118Romania 3.02 87 Zimbabwe2.24119Tanzania3.01 88 Nepal 2.22120Trinidad and Tobago 2.99 89 Kyrgyzstan2.20121Uganda2.98 90 Nicaragua 2.17122Russia2.96 91 Bolivia 2.16123Benin 2.94 92 Paraguay2.15124Dominican Republic2.93 93 Moldova 2.12125Venezuela 2.92 94 Macedonia 2.12126Syria 2.91 95 Burundi 2.06127Botswana2.88 96 Lesotho 1.96128Namibia 2.84 97 Timor-Leste 1.73129Burkina Faso2.83 98 Cape Verde1.70130 26 28. Table 6: Output Pillar Rank: Knowledge CountryKnowledge Rank CountryKnowledge Rank Korea, South5.051 Kuwait 3.48 34 Switzerland 4.982 Brazil 3.38 35 Germany 4.983 Sri Lanka3.37 36 Japan 4.934 Spain3.37 37 Sweden4.855 United Arab Emirates 3.36 38 United States 4.776 Costa Rica 3.36 39 Finland 4.677 Philippines3.35 40 Taiwan4.638 Australia3.29 41 United Kingdom4.599 Oman 3.28 42 Netherlands 4.5710Hungary3.28 43 Singapore 4.5111Malta3.26 44 Denmark 4.4212Vietnam3.18 45 The Worlds Top Innovators 2008-2009 Austria 4.3813Portugal 3.13 46 France4.3614Turkey 3.11 47 Belgium 4.2915Cyprus 3.10 48 Ireland 4.2516Romania3.10 49 Malaysia4.2417New Zealand3.07 50 Luxembourg4.1818Lithuania3.01 51 Italy 4.1319Estonia3.01 52 Israel4.0720Slovakia 3.00 53 Hong Kong 4.0321Chile2.98 54 Canada4.0022Thailand 2.98 55 India 3.8923Poland 2.95 56 Norway3.8824Jordan 2.92 57 Iceland 3.7225South Africa 2.90 58 Uzbekistan3.6526Nigeria2.88 59 Saudi Arabia3.6327Mexico 2.81 60 China 3.5828Kenya2.80 61 Indonesia 3.5629Morocco2.78 62 Tunisia 3.5230Ukraine2.77 63 Czech Republic3.5131Barbados 2.74 64 Qatar 3.4932Azerbaijan 2.73 65 Slovenia3.4833Benin2.69 6627 29. The Global Innovation Rankings and Report 2008-2009 Table 6:Output Pillar Rank: KnowledgeCountryKnowledgeRankCountryKnowledge RankMauritius2.6667 Cape Verde 2.19 99Croatia2.6568 El Salvador2.17100Argentina2.6069 Gambia, The2.16101Panama 2.5970 Madagascar 2.13102Russia 2.5871 Nepal2.10103Tanzania 2.5672 Macedonia2.09104Egypt2.5373 Georgia2.07105Serbia 2.5274 Ecuador2.06106Guatemala2.5175 Libya2.06107Greece 2.4976 Ethiopia 2.04108Kazakhstan 2.4977 Algeria2.01109Timor-Leste2.4678 Botswana 2.00110The Worlds Top Innovators 2008-2009Senegal2.4679 Guyana 1.99111Honduras 2.4680 Dominican Republic 1.98112Mali 2.4581 Zambia 1.98113Uganda 2.4282 Cameroon 1.98114Colombia 2.4283 Suriname 1.95115Bulgaria 2.4284 Kyrgyzstan 1.94116Bahrain2.4285 Armenia1.94117Mauritania 2.3986 Paraguay 1.91118Pakistan 2.3787 Moldova1.90119Latvia 2.3388 Burundi1.89120Bangladesh 2.3389 Venezuela1.89121Syria2.3290 Nicaragua1.85122Tajikistan 2.2891 Lesotho1.85123Cambodia 2.2792 Bosnia and Herzegovina 1.80124Montenegro 2.2693 Mongolia 1.77125Trinidad and Tobago2.2694 Bolivia1.74126Uruguay2.2595 Albania1.70127Peru 2.2496 Mozambique 1.66128Jamaica2.2297 Namibia1.51129Burkina Faso 2.2098 Zimbabwe 1.41130 28 30. Table 6: Output Pillar Rank: Competetiveness CountryCompetetiveness Rank Country Competetiveness Rank United States 6.401 South Africa 3.2234 Germany 6.132 Brazil 3.1935 United Kingdom4.933 Tanzania 3.1836 Japan 4.844 New Zealand3.1737 China 4.555 Nigeria3.1538 France4.526 Slovenia 3.1539 Netherlands 4.517 Saudi Arabia 3.1540 Hong Kong 4.288 Qatar3.1541 Korea, South4.269 Trinidad and Tobago3.1342 Belgium 4.1610Mexico 3.1243 Sweden4.1511Philippines3.1044 Austria 4.1512Costa Rica 3.0945The Worlds Top Innovators 2008-2009 Canada4.1413Macedonia3.0746 Switzerland 4.0514Lithuania3.0347 United Arab Emirates3.9915Portugal 3.0248 Singapore 3.9616Poland 3.0249 Denmark 3.8917Iceland2.9750 Italy 3.8618Greece 2.9651 Ireland 3.7819Estonia2.9452 Spain 3.7720Uzbekistan 2.9453 Taiwan3.7221Israel 2.9354 Australia 3.6722Hungary2.9255 Malaysia3.5523Vietnam2.9256 India 3.5524Sri Lanka2.9057 Norway3.5525Tunisia2.8658 Slovakia3.5426Cameroon 2.8559 Finland 3.5327Guatemala2.8460 Czech Republic3.4528Malta2.8361 Chile 3.4229Senegal2.8262 Thailand3.3730Montenegro 2.8263 Luxembourg3.3231Bahrain2.8064 Turkey3.2932Kenya2.7265 Indonesia 3.2933Jordan 2.7066 29 31. The Global Innovation Rankings and Report 2008-2009 Table 6: Output Pillar Rank: CompetetivenessCountryCompetetivenessRankCountryCompetetiveness RankOman2.7067Benin 2.1299Kuwait2.6968Namibia 2.11 100Peru2.6969Botswana2.10 101Argentina 2.6870Mauritania2.06 102Russia2.6371Suriname2.02 103Honduras2.6272Venezuela 2.02 104Cyprus2.6173Paraguay2.00 105Gambia, The 2.6074Bangladesh1.99 106Colombia2.5675Pakistan1.98 107Latvia2.5576Uganda1.97 108Croatia 2.5177Mongolia1.95 109Egypt 2.5178Burkina Faso1.95 110The Worlds Top Innovators 2008-2009El Salvador 2.4979Nicaragua 1.94 111Panama2.4980Georgia 1.90 112Mali2.4281Zimbabwe1.88 113Mauritius 2.4182Moldova 1.82 114Barbados2.4183Nepal 1.77 115Romania 2.4084Algeria 1.77 116Uruguay 2.3685Bolivia 1.77 117Jamaica 2.3686Bosnia and Herzegovina1.74 118Morocco 2.3687Cambodia1.72 119Zambia2.3688Libya 1.72 120Syria 2.3589Ethiopia1.70 121Kazakhstan2.3490Tajikistan1.63 122Dominican Republic2.3091Mozambique1.63 123Bulgaria2.2692Albania 1.60 124Madagascar2.2693Kyrgyzstan1.51 125Azerbaijan2.2394Armenia 1.48 126Ukraine 2.2195Cape Verde1.40 127Guyana2.1996Lesotho 1.34 128Ecuador 2.1397Burundi 1.32 129Serbia2.1398Timor-Leste 1.17 130 30 32. Table 6: Output Pillar Rank: Wealth CountryWealth Rank Country Wealth Rank Qatar 5.00 1 Czech Republic 2.55 34 Norway4.23 2 Spain2.51 35 Luxembourg4.17 3 Germany2.51 36 Kuwait4.08 4 Slovenia 2.49 37 Iceland 3.88 5 New Zealand2.49 38 United Arab Emirates3.71 6 Kazakhstan 2.48 39 Azerbaijan3.63 7 Russia 2.48 40 Singapore 3.58 8 France 2.47 41 Saudi Arabia3.40 9 Estonia2.40 42 United States 3.36 10Lithuania2.32 43 Canada3.18 11Latvia 2.30 44 Sweden3.14 12Italy2.30 45The Worlds Top Innovators 2008-2009 Finland 3.12 13Malta2.27 46 Australia 3.07 14Bulgaria 2.27 47 Taiwan3.03 15Armenia2.26 48 Bahrain 2.97 16Trinidad and Tobago2.25 49 Botswana2.92 17Croatia2.22 50 Hong Kong 2.89 18Poland 2.19 51 Netherlands 2.82 19Hungary2.17 52 Israel2.79 20South Africa 2.15 53 Ireland 2.78 21Thailand 2.12 54 Cyprus2.74 22Costa Rica 2.08 55 Slovakia2.73 23Indonesia2.05 56 Korea, South2.73 24Portugal 2.02 57 Austria 2.69 25Cape Verde 2.02 58 Belgium 2.65 26Brazil 2.01 59 Malaysia2.63 27Macedonia1.99 60 Denmark 2.62 28Egypt1.99 61 Greece2.60 29Ukraine1.99 62 United Kingdom2.59 30Uruguay1.98 63 Japan 2.58 31Peru 1.96 64 Switzerland 2.56 32Romania1.96 65 Oman2.55 33Lesotho1.95 66 31 33. The Global Innovation Rankings and Report 2008-2009 Table 6: Output Pillar Rank: WealthCountry WealthRankCountryWealth RankMauritius1.9567 Panama1.63 99Argentina1.9268 Nicaragua 1.62100Dominican Republic 1.9269 Pakistan1.58101Venezuela1.9170 Mozambique1.58102Montenegro 1.9171 Bangladesh1.55103Barbados 1.8872 Morocco 1.54104Mauritania 1.8773 Mongolia1.52105China1.8674 Cameroon1.50106Turkey 1.8675 Vietnam 1.47107Colombia 1.8676 Algeria 1.46108Uzbekistan 1.8577 Guatemala 1.44109Jordan 1.8578 Albania 1.44110The Worlds Top Innovators 2008-2009Nigeria1.8479 Honduras1.41111Namibia1.8380 Mali1.41112Zambia 1.8181 Cambodia1.41113Tunisia1.8082 Kyrgyzstan1.40114Libya1.8083 Guyana1.39115Chile1.8084 Paraguay1.38116Jamaica1.8085 Senegal 1.38117Bosnia and Herzegovina 1.7786 Kenya 1.36118Georgia1.7687 Gambia, The 1.36119Serbia 1.7488 Ethiopia1.35120Ecuador1.7389 Moldova 1.34121India1.7390 Uganda1.32122Syria1.7191 Tanzania1.30123Philippines1.7192 Burkina Faso1.29124Mexico 1.7193 Burundi 1.28125Sri Lanka1.7094 Madagascar1.27126Tajikistan 1.6995 Benin 1.21127El Salvador1.6796 Nepal 1.15128Bolivia1.6797 Zimbabwe1.10129Suriname 1.6598 Timor-Leste 1.04130 32 34. for emerging markets such as Russia. If they can reduce the strengthened by the presence of a large number of top-qualityprocessing time for start-ups, they can considerably improveresearch universities. The country continues to be a magnet fortheir overall innovation climates.attracting top talent many of whom stay back in the countrybeyond their education to become researchers, professorsHuman Capacityand highly qualified workers in US industry. The success ofHuman resources of a country are a significant factor in theinnovative clusters such as Silicon Valley and Boston is duedevelopment of new ideas. That cannot flourish withoutin large part to the success of these regions in attracting andadequate investment in the education system. Its therefore retaining some of the best minds of the world. Of significanceimperative to have good-quality institutions of higher learning also is the fact that South Korea has move into third slot scoringand R&D centres. This includes good schools and universities. high on education and focus on science and technology. Inparticular, the priority of the Korean government has been toA static, stagnant education system cannot nurture innovation.create a knowledge economy focusing on human resources andInnovation can happen only in an environment where one is technology infrastructure.encouraged to ask critical questions. Education cannot remainjust a breeding ground for information gathering. Its far more Investment in education yields long term benefits for betteringcrucial to see what one does with the information garnered in human capacity and in turn significantly improving theschool than to see how much of it is remembered. This is theinnovation capabilities of a nation. One indicator is educationfundamental truth and the sooner education systems around expenditure as a per cent of GNI. Interestingly, two of three top The Worlds Top Innovators 2008-2009the world realise it, the better. countries in this group are from Africa. They include Lesotho(7.00), Denmark (6.66) and Botswana (6.47). The countriesA leading concern of business executives is finding and with the lowest scores are not surprising too: Cape Verde (1.00),employing qualified personnel to create, supervise and performEcuador (1.02) and Cambodia (1.23).innovative activities. An increasingly complex technologicalworld requires both higher levels of education and greaterWhile many nations focus a lot on primary and secondaryspecialization. This is a critical issue for all countries and is education, not many do on adult population. The countries thatdifficult for even the most innovative economies. Countries inscore highest on the literacy rate of adult population are Latviamany parts of the world have increased their investments in and Estonia (7.00) and Ukraine (6.99).general education to increase literacy. The focus is also changingin many countries to apply resources to prepare a new generationThe countries with the lowest rates of adult literacy were Maliwith the skills needed for a knowledge-based economy. This(1.00), Burkina Faso (1.42) and Benin (2.35).shift in priorities is corroborated by a 2007 World Bank studyGeneral & ICT Infrastructureon firm innovation in 47 emerging economies which found theeducation level of the manager and workforce had a significant The components of this pillar highlight the critical importanceinfluence on innovative capabilities.1 of Information Communication Technologies (ICT) and thegeneral infrastructure as enablers for innovation. A little moreWhen we come to the human capacity pillar, the representation than two decades ago, a discussion on innovation would notof geographies and countries is mixed, with two countries fromhighlight the specific importance of ICT. But in a quarter of athe Americas (the USA ranked first and Canada ranked 6th),century - by the speed of their evolution and diffusion, theirtwo from the Nordic region (Denmark ranked 2nd and Sweden complementary qualities, and the economic efficiencies andranked eight), three from the rest of Europe (Switzerland intellectual advances achieved through networked people andranked 4th, United Kingdom ranked 5th and Germany rankeddata - ICT have become a vital component of a knowledge-9th) and two from Asia (South Korea ranked 3rd and Singaporebased economys infrastructure.ranked 7th). The lead of the US in the human capacity pillar is1Most intriguingly, a highly-educated manager created a firm more innovative along all the innovation dimensions reviewed in the study.Meghana Ayyagari, Asli Demirg-Kunt, Vojislav Maksimovic, Firm Innovation in Emerging Markets, World Bank Policy Research Working Paper 4157, March2007, p. 21 33 35. The Global Innovation Rankings and Report 2008-2009 There are many reasons for giving such a prominent role to ICT.In the General and ICT infrastructure pillar, there are some First, the IT industry itself is a fountain of innovation with somesurprises with Iceland finding a place in the top 10 and estimates claiming that ICT related sectors account for as muchthe US coming in just at the 10th position. Taiwan with its as 50 per cent of all innovations in some developed economies. manufacturing strengths in the ICT sector also performs well Secondly, ICT accelerates the innovation process by making at the 5th position along with Hong Kong the in the top pack. the analysis of and access to data more powerful and efficient.Although South Korea missed being in the top 10, it finds itself Thirdly, ICT has enabled networking, whether of personal just below at the 11th rank. Nevertheless, it reflects the strengths contacts, ideas, or information, to introduce novel ways for it has built up in recent years, particularly in broadband businesses to outsource functions and conduct research acrossdevelopment and penetration. multiple time zones. Fourthly, ICT has eliminated distance andMarket Sophistication time as obstacles to educational advancement, both for students and lifelong learning, by making vast informational resourcesAccess to financial institutions and investors willing to support available through a networked PC. Finally, ICT can improve entrepreneurial ventures and business expansion are essential governmental regulatory and supervisory capabilities, as wellto encourage innovative business activities because the as interactions with businesses and citizens.degree to which companies can finance innovative, risky newproducts and services have a profound effect on a countrys Denmark tops the ICT and infrastructure pillar. This is notability to develop its innovation capabilities. The Pillar of surprising given the fact that Denmark also comes at top Market Sophistication measures a number of factors relatedThe Worlds Top Innovators 2008-2009 position in the 2008 Networked Readiness Rankings of the to the ability of an economy to provide a supportive market World Economic Forum2. The country continues to display theenvironment for innovation. Such an environment is essential highest Internet bandwidth (346 Mb/s per 10,000 population)for any innovation to flourish. An efficient market ensures ready and broadband Internet penetration rates (36.3 per 100 access to credit for corporate and individual entrepreneurs, a population) in the sample, together with extensive ICT usage steady inflow of foreign direct investment (FDI) and a prepared by companies in their business transactions. Other notable capital formation system. competitive advantages helping the country to fully leverage technology have to do with more general aspects, such as a wellThe ranks of various countries along the Markets Sophistication functioning and developed internal market, which providedpillar are depicted in Table 4. Significantly, Hong Kong (ranked the national high tech industry with a large domestic demand 1st), Bahrain (ranked 4th) and Singapore (ranked 6th) rate very in its early stage, an excellent education system coupled with highly on this pillar. That may not come as a surprise as these the close collaboration between the academia and industry, and countries are known to be investor - friendly with financial Danish peoples taste and talent for developing, pioneering, and market sophistication and the ability to protect investors and using new technologies and applications. stakeholders with the right balance of market freedom andregulation. Globally, Hong Kong is a leader in financial markets The development of Internet is seen as an important indicatorsophistication with one of the most active stock exchanges in of innovation with the nations focus on ICT and knowledge Asia and strong fiscal management. Singapore with a projected management. The leaders in the development of Internet near 6 per cent growth in its GDP in 2009 because of its small bandwidth are Denmark (7.00) followed by Netherlands (4.53)size and tight economic management has created a sophisticated and Sweden (4.01). There are several countries doing poorly on market that attract a high degree of foreign investment - many this variable, the most deprived being Burundi, Cape Verde and companies worldwide have used the option of listing on the Cambodia (1.00). Similarly, the countries that have the highestSingapore stock exchange. number of Internet users are (which is also another pointer) are Netherlands (7.00), Canada (6.59) and Norway (6.31). The United Kingdom (ranked 2nd) and United States (ranked3rd) also score very highly along this pillar. These high rankings 2http://www.weforum.org/en/initiatives/gcp/Global%20Information%20Technology%20Report/index.htm 34 36. reflect the strength and sophistication of the financial markets The presence of US at the top of the rankings for this pillarin London and New York respectively. Although these marketsshould not be a surprise. American businesses have longhave come under pressure in recent months due to the financial been highly customer - orientated, have invested in businesscontagion, the strengths of these financial markets should process reengineering and have aggressively invested in newcontinue after the implementation of appropriate reforms overtechnologies when needed. Three Asian countries also show upthe next months. in the top ten rankings: South Korea (4th), Singapore (6th) and Taiwan (8th).Many countries have considerably liberalised foreigninvestment laws and financial markets. Competition can spark Output Pillarsinnovation as firms are compelled to find new ways beyondKnowledgepricing to attract and retain customers. Reducing barriers isanother important lever to improve innovation, because for This pillar reflects the degree to which a country can developmany countries it is easier to open domestic markets to foreignand apply knowledge to increase the value-added componentscompetitors than reform legal and financial institutions. France in products and services, as well as more generally move(7.00), China (6.14) and Germany (4.17) are among the leaderstowards an innovation-driven economy. Ten metrics create thein having an environment that attracts net inflows of foreignKnowledge pillar as detailed in Appendix I.direct investment. South Korea and Switzerland come in at first and secondBusiness Sophisticationpositions respectively, along the Knowledge pillar. Both theseThe Worlds Top Innovators 2008-2009 economies boast high spending on R&D, excellent scientificThe Business Sophistication pillar refers to how adept research institutions and strong collaborations betweencompanies are in developing and applying new technologies academia and the corporate sectors. A strong innovationin their practices, products and services. It also reflects the and knowledge culture is also a result of their high patentingoverall quality of domestic manufacturing and services and capabilities.how responsive companies are to the market. ICT spending aspercentage of GDP is a good indicator. The countries that do The Knowledge pillar manifests itself particularly in hi-techwell in this variable score are Vietnam (7.00), Zimbabwe (5.94)and manufactured exports, along with the total number ofand New Zealand (5.02).patents and research personnel produced. The countries on the top of the list in terms of volume of high tech exports areA service orientation toward customers is a requirement as Philippines with a score of 7.0, Singapore (6.1) and Malta (6.01).markets become more competitive and global. Customer This variable reflects the extent to which a countrys exportingdemands for innovative products and services requires a long- companies have climbed the value chain from resource- andterm commitment across the whole organisation and at all levels factor-driven production to such higher innovation-drivenof management. As clients become more sophisticated and functions as product design, novel marketing techniques, anddemand more innovative practices, champions of innovation advanced logistics. As local skills levels improve, manufacturersneed to be encouraged and empowered. can apply sophisticated processes to increase productionICT technologies have great potential to stimulate innovativeefficiency.products and services, and manufacturing improvements, Clusters have become a favoured method to develop enterprisesand change relations with vendors and consumers, providing in a particular or related sectors, industries or services.they are integrated with business processes and methods. The presence of stronger and deeper clusters of innovativeGovernments in several countries have been demonstrating companies were particularly seen in South Korea (7.0) at thehow ICT technologies can enhance administrative procedures top followed by Taiwan (6.93), Italy (6.40) and the USA (6.27).and improve access to governmental services by investing in Singapore follows next. Clusters are a versatile and powerfulnew e-government services.35 37. The Global Innovation Rankings and Report 2008-2009 technique to stimulate economic progress and the countries inhigh spending on R&D by companies. With overall economic the top league here are home to some of the worlds leadingcompetitive pressures, the government realises that unless there cluster developments in specific industries. Their leadershipis a greater focus on creation of new industries, it will not be positions are bolstered by research and development clusters able to substantially improve its competitive advantage. in these countries.Despite Chinas competitive weaknesses with respect to Local availability of process machinery is another indicator offinancial markets and stock markets operations, innovation is knowledge development. Japan and Germany top the list here becoming a key competitive advantage through greater focus with scores of 7.0 and 6.87. Similarly, the Value chain presence on corporate R&D and focus on academic-corporate interface variable reflects the extent to which a countrys exportingand creating market-friendly innovation and products. Of companies have climbed the value chain from resource and course, its natural strengths of market size allows for substantial factor-driven production to such higher innovation-drivenscale of economies. functions as product design, novel marketing techniques, and advanced logistics. Predictably, both Japan and Germany scoreAs companies develop innovative products and services offering high here coming in at the second and forth ranks respectively.better value, features and performance, their appeal increasesacross domestic and international markets. A significant reason Competitivenessfor many countries strong competitive performance has been the The competitiveness of a nation has been traditionally linkedreach of its products and services into foreign markets. The leadingThe Worlds Top Innovators 2008-2009 with comparative advantage in trade since the days of Ricardo. countries in goods exports are United States (7.00), Germany Innovative products in industries give nations an edge over their(6.54) and China (6.18). Similarly, in service exports, the countries rivals. But in order that these products be a popular technology that top the list as the top exporters of services are the United States among markets, the number of competing manufacturers too (7.00), the United Kingdom (4.47) and Germany (3.61). should be increased. A healthy relationship between industryWealth and the number of innovative products, combined with good local sales and sizeable exports, bodes well for the world This is a tangible measure of the results of innovation. Wealth economy. We also took into account other factors like goodscan be created from the presence of highly demanded natural and service exports, intensity of local competition and breadthresources such as oil within an economy.Wealth is also created of international markets.by innovative products and services thatcreate value and areappealing for customers. Consequently they generate greater The United States and Germany come in at first and secondwealth for the economies creating them. Even economies such positions, respectively, on this pillar. The high degree ofas Saudi Arabia who benefit from large reserves of oil and innovation in its products and services coupled with the globalgas are investing heavily in the innovative processing of these reach of its leading firms puts the USA in a very competitiveresources to serve global needs for petrochemicals. position to serve customers around the world. Germany despite its relative weaknesses along the input pillars continues to beCommon measures for wealth include annual GDP growth rate, very competitive still being the largest exporter in the world.GDP per capita and volume of stocks traded. Electric power This is based upon the strength of investments in R&D andconsumption too has been incorporated, as these consumption the creation of high value adding technologies in its large andlevels are highly correlated to the wealth of households and medium sized corporations. families. Competitiveness is the only pillar where China (ranked It is significant but not surprising that four oil producing fifth) comes in the top ten and also marks the presence of companies from the Middle East with last years record crude another Asian country Japan (ranked fourth). Despite Japans prices - including Qatar (ranked 1st), Kuwait (ranked 4th), UAE overall macroeconomic weaknesses and high deficits, its(ranked 6th) and Saudi Arabia (ranked 9th) - find themselves in competitiveness and higher business innovation sophisticationthe top ten rankings in this pillar. Nevertheless, what is equally results from a high availability of scientific engineers and significant is that these governments and national leadership 36 38. are using their wealth in turn to beef up their competitive [including the UAE (26); Kuwait (30); Saudi Arabia (32)],abilities through high innovation and ICT usages. Qatar withindicating that marginal differences in rankings cannota per capita income of US$ 62, 000 is incorporating nationalbe taken at just face value and that many countries in theinitiatives to instill changes and innovations at the societal andregion have enormous government leadership behindbusiness levels. All of these efforts will ensure to a certain extent strong initiatives at innovation policy development andthat despite the performance of the crude barometer in theimplementation.coming years, the innovation momentum will be supported.In Asia, after Singapore in the top bracket, Malaysia comesWhile the edge that oil production gives to a nations wealth in at the 26th position followed by China (38th), and India,and innovation capability is well known, some of the otherdespite its immense pool of trained IT manpower, slipsindicators like market value of publicly traded shares anddown from 23rd in 2007.annual GDP growth are also important. In the first category,There are few countries from Africa that are included inZimbabwe is the clear leader in this variable with a score ofthe rankings with only South Africa coming in at the 43rd7.00 followed by Hong Kong (4.47) and South Africa (3.33).position.The countries that scored the lowest on this were Uzbekistan,Armenia and Uganda (1.00). On the other hand, the countries Despite the financial crisis, the United States continues to bethat scored the highest on annual percentage GDP growth werethe most competitive and innovative economy in the world.Azerbaijan (7.00), followed by China (3.01) and Cyprus (2.85).Among the reasons for this, the most important are the many The Worlds Top Innovators 2008-2009structural features that make its economy extremely productiveElectric power consumption too has been incorporated as awith high business-market sophistication. In other studies too,variable, as these consumption levels are highly correlated tolike the Global Competitiveness Report 2008-09, the Unitedthe wealth of households and families. In some ways, it is notStates is ranked first for innovation. It is evident that the marketsurprising that the top countries in this category are Icelandsupports the innovative activity through an efficient allocation(7.0), Norway (6.47), Canada (4.59) and Finland (4.44).of resources for effective use. But increasingly the US facesGDP per capita is another clear indicator of wealth. The topcompetitive question marks, at home and abroad. Until now,countries in this category are characterized by their small US managed to camouflage the shortcoming in its primary andpopulation size and in most of the cases with abundance onsecondary education by attracting overseas talent. Now it facesnatural resources. Luxembourg comes on the top with a score the need to produce more scientists and engineers from within,of 7.0, Qatar next with 6.63 followed by Norway (5.12), Kuwaitjust as it must improve the quality of an ageing communication(5.09) and UAE (5.09).and transportation infrastructure. However, overall, despiterising concerns about the soundness of its banking sector, theRegional Reviewscountrys other strengths continue to make it productive andinnovative.On taking an in depth analysis of the top twenty-five countries,one notes that: There seems to be a concentration in innovation in theAmericas, Asia-Pacific and the European regions. The highThere are only two countries from the Americas, Unitedincome countries are the global leaders in innovation andStates and Canada, in this list.are consistently present in the top 10 rankings. The averageA majority of countries -14 of them - are from Europe innovation index in Asia is the highest and that of Africa isincluding the Nordic countries. much lower. The efficiency of innovation in the Asia-Pacificregion is also higher than in the Americas.There are 7 countries from the East Asian and Pacificregion. With five European countries in the top 10 namely, UK,France, Switzerland and Netherlands alongside Germany oldAlthough only two countries from Middle East and WestEurope had put in a creditable collective performance last year.Asia (Israel and Qatar) are there in the top 25 this year,This year, there is also the inclusion of three Nordic countriesmany of them feature in positions just below this bracket 37 39. The Global Innovation Rankings and Report 2008-2009 Europe EuropeCountrySub-region 2008-09 RankCountry Sub-region 2008-09 RankGermanyRest of Europe 4.99 1Eastern Europe andAzerbaijan3.1428Sweden Rest of Europe 4.84 2Central AsiaUnited Kingdom Rest of Europe 4.82 3Eastern Europe andUzbekistan3.1129Central AsiaSwitzerlandRest of Europe 4.73 4Eastern Europe andDenmarkRest of Europe 4.69 5Latvia3.1030Central AsiaNetherlandsRest of Europe 4.64 6Eastern Europe andCroatia 3.0331FinlandRest of Europe 4.57 7Central AsiaNorway Rest of Europe 4.47 8Eastern Europe andRussia2.9332AustriaRest of Europe 4.46 9Central AsiaLuxembourg Rest of Europe 4.3710Eastern Europe andRomania 2.9233Central AsiaBelgiumRest of Europe 4.3511Eastern Europe andFrance Rest of Europe 4.3512Kazakhstan2.8534Central AsiaThe Worlds Top Innovators 2008-2009IcelandRest of Europe 4.3413Eastern Europe andIrelandRest of Europe 4.3014Bulgaria2.8535Central AsiaSpainRest of Europe 3.8115Eastern Europe and Eastern Europe and Ukraine 2.7736Estonia 3.6916Central Asia Central AsiaEastern Europe andItalyRest of Europe 3.6517Macedonia 2.6037Central Asia Eastern Europe and Eastern Europe andCzech Republic3.6418Georgia 2.4438 Central Asia Central Asia Eastern Europe and Eastern Europe andSlovakia3.5919Armenia 2.3439 Central Asia Central Asia Eastern Europe and Bosnia andEastern Europe andSlovenia3.59202.3040 Central Asia Herzegovina Central AsiaPortugal Rest of Europe 3.4921Eastern Europe and Eastern Europe and Tajikistan2.2741Lithuania 3.4322Central Asia Central Asia Eastern Europe andMoldova 2.2142Cyprus Rest of Europe 3.3923Central Asia Eastern Europe and Eastern Europe andHungary 3.3424Albania 2.1143 Central Asia Central AsiaTurkey Rest of Europe 3.2425Eastern Europe andKyrgyzstan2.0944Greece Rest of Europe 3.1726Central Asia Eastern Europe andPoland3.1527 Central Asia 38 40. Asia AsiaCountrySub-region 2008-09 Rank Country Sub-region 2008-09 RankSingaporeEast Asia and Pacific4.811Eastern Europe and Central Uzbekistan 3.1130Korea, South East Asia and Pacific4.732Asia Eastern Europe and CentralJapanEast Asia and Pacific4.653Latvia 3.1031 AsiaHong KongEast Asia and Pacific4.594 Eastern Europe and CentralTaiwan East Asia and Pacific4.415Croatia3.0332 AsiaAustraliaEast Asia and Pacific4.276Philippines East Asia and Pacific2.9933Israel Middle East4.177Vietnam East Asia and Pacific2.9734QatarMiddle East4.128Eastern Europe and Central Russia 2.9335Malaysia East Asia and Pacific4.069AsiaUnited ArabEastern Europe and Central Middle East3.9910 Romania2.9236Emirates AsiaNew ZealandEast Asia and Pacific3.9711 Eastern Europe and Central Kazakhstan 2.8537 Eastern Europe and CentralAsiaThe Worlds Top Innovators 2008-2009Estonia 3.6912 Eastern Europe and Central AsiaBulgaria 2.8538 AsiaKuwait Middle East3.6613 Eastern Europe and CentralSaudi Arabia Middle East3.6514 Ukraine2.7739 AsiaCzechEastern Europe and Central3.6415 Eastern Europe and CentralRepublic AsiaMacedonia2.6040 AsiaBahrainMiddle East3.5916 PakistanSouth Asia 2.5541 Eastern Europe and CentralSlovakia3.5917 Syria Middle East2.5542 Asia Eastern Europe and Central Eastern Europe and CentralGeorgia2.4443Slovenia3.5918 Asia Asia Eastern Europe and CentralChinaEast Asia and Pacific3.5919 Armenia2.3444 AsiaIndiaSouth Asia 3.4420 MongoliaEast Asia and Pacific2.3245 Eastern Europe and CentralLithuania 3.4321 Bosnia andEastern Europe and Central Asia 2.3046 Herzegovina AsiaThailand East Asia and Pacific3.4022 BangladeshSouth Asia 2.2747 Eastern Europe and CentralHungary 3.3423 Eastern Europe and Central AsiaTajikistan 2.2748 AsiaIndonesiaEast Asia and Pacific3.2624 Eastern Europe and Central Moldova2.2149Oman Middle East3.2325 AsiaJordan Middle East3.1626 CambodiaEast Asia and Pacific2.1850 Eastern Europe and CentralEastern Europe and CentralPoland3.1527 Albania2.1151 AsiaAsia Eastern Europe and CentralEastern Europe and CentralAzerbaijan3.1428 Kyrgyzstan 2.0952 AsiaAsiaSri LankaSouth Asia 3.1229 Nepal South Asia 2.0453 39 41. The Global Innovation Rankings and Report 2008-2009 America AfricaCountryIncome Group2008-09 Rank Country Sub-region 2008-09 RankUnited StatesHigh Income 5.281Malta North Africa3.54 1Canada High Income 4.632South AfricaEast and South Africa 3.41 2ChileUpper Middle Income 3.513Tunisia North Africa3.37 3Costa Rica Lower Middle Income 3.274Mauritius East and South Africa 2.95 4Brazil Upper Middle Income 3.255Nigeria West Africa 2.91 5Barbados Upper Middle Income 3.176Egypt North Africa2.83 6Mexico Upper Middle Income 3.067BotswanaEast and South Africa 2.81 7Trinidad and Upper Middle Income 2.968Kenya East and South Africa 2.81 8TobagoPanama Upper Middle Income 2.949Morocco North Africa2.76 9JamaicaLower Middle Income 2.85 10TanzaniaEast and South Africa 2.6610Colombia Lower Middle Income 2.84 11Gambia, The West Africa 2.6311UruguayUpper Middle Income 2.77 12Senegal West Africa 2.5912The Worlds Top Innovators 2008-2009GuatemalaLower Middle Income 2.77 13Namibia East and South Africa 2.5213Honduras Lower Middle Income 2.76 14ZambiaEast and South Africa 2.4814ArgentinaUpper Middle Income 2.74 15MaliWest Africa 2.4615Peru Lower Middle Income 2.74 16El SalvadorLower Middle Income 2.61 17Benin West Africa 2.4116Dominican UgandaEast and South Africa 2.3817 Lower Middle Income 2.57 18RepublicMauritaniaWest Africa 2.3418VenezuelaUpper Middle Income 2.37 19CameroonWest Africa 2.3119Guyana Lower Middle Income 2.34 20Algeria North Africa2.2920EcuadorLower Middle Income 2.28 21MadagascarEast and South Africa 2.2621Suriname Lower Middle Income 2.28 22Burkina FasoWest Africa 2.2222NicaraguaLow Income2.22 23Libya North Africa2.1323Paraguay Lower Middle Income 2.16 24BoliviaLower Middle Income 2.05 25EthiopiaEast and South Africa 2.1324MozambiqueEast and South Africa 2.0225 from Europe, i.e. Finland, Sweden and Denmark in the top 10ZimbabweEast and South Africa 1.9726 slots. While the GII 2008/2009 shows that Europes innovationCape VerdeWest Africa 1.9327 performance is both above par and an optimistic sign for theBurundi East and South Africa 1.8128 future, the exclusion of some of the old European countries is a trend to be watched. from the 19th to the 6th position. While Japan continues to be Last year, while South-east and East Asia had goodin the top ten having slipped one position from the 4th to the representation in the top rankings, the promise of the East is5th position, Singapore comes in the 9th position also having not so clearly evident this time round. Consider: last time Japan slipped down. stood fourth; Singapore (7th); Hong Kong (10th); South Korea (19th); and India and China, 23rd and 29th respectively; this While the three countries in the Middle-east and West-Asian year only South Korea has managed to improve its performanceregion - Israel, UAE and Qatar - continue to show promise, they 40 42. have moved down in the ranking compared to last year. All rankings, it has over the years built some significant strengths.these three countries benefit from a few common denominators: Of note are the high talent pool of scientific and technicalOne, oil wealth, the relatively low population base, high per engineers, building of ICT and knowledge capabilities incapita income and the smallness of the countries make it easier companies, greater globalization process of Indian companies,to implement policies. Two, all of them have benefited from more focused government initiatives and better innovationgovernment and political leadership that sets them apart from capabilities in Indian companies. Indian and expat talent fromtheir neighbours through policies designed to attract skilled overseas is either returning or coming afresh in recent years toworkers and technology-intensive companies. Three, they India reversing the braid drain of the eighties. None of this ofhave tried to inculcate ICT (information and communicationcourse would have been possible without a strong governmenttechnologies) and innovation policies in a holistic manner so leadership which is now committed to take the country forwardthat society as a whole benefits. in the 21st century and moving up the innovation ladder byweaving together a global and local approach.China as a nation at 37th rank this year has again showed thatit is serious about moving up the innovation chain. This is Whats the story of the Brics countries (Brazil, Russia, India andevident from the huge sums of money being poured into R&D China) on the innovation ranking this time around? Unlike lastand education to ensure that it climbs steadily up the rankings,year when India and China (23 and 29 ranks respectively) ranleaving India some way behind. For example, China has neck-and-neck at the top of the second quartile, with Brazilalready overtaken Japan to become the worlds second largest(40) and Russia (54) lower down the pecking order, this timeThe Worlds Top Innovators 2008-2009investor (after the US) in R&D in absolute terms. According around China has over taken India to finish at the 37th andto the OECD, China spent US$136bn on R&D in 2006, a 20% 41st ranks. One thing that is notable and which was observedincrease on the previous year. This was more than Japans spend last year was that all these countries scored high on the humanof US$130bn, but still well below that of the United States atcapacity pillar with respect to their performance on the pillars.US$330bn. Among all the pillars, India scored scored highest here with ascore of 4.55, Brazil with 4.39 and Russia with 4.09. Again all theChina can also expect to benefit more than India from foreign Bric countries score well on the knowledge pillar. Predictably,direct investment because of its more favourable regulatory China scores highest with 4.55 on the competitiveness pillarand economic climate. Much of Chinas inbound investmentonly reflecting the strides that it has made in globalizationwill continue to target innovation rich sectors such a