INSEAD issues The Global Innovation Index 2011

INSEAD, the leading international business school, today announced the findings of The Global Innovation Index (GII) 2011 edition. Switzerland topped this year's GII ranking, gaining three spots from its position in last year’s GII. Sweden and Singapore follow in the 2nd and 3rd positions, respectively. Joining INSEAD as Knowledge Partners for the report were Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry (CII), and the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations.

This year’s rankings show that innovation has become a global phenomenon with six European economies (including Finland 5th, Denmark 6th, the Netherlands 9th and the United Kingdom 10th), two Asian (including Hong Kong, SAR, China 4th) and two North American economies (the United States 7th and Canada 8th) in the Top 10.

‘Innovation is critical to driving growth in both developed and emerging economies, especially during a time when the global economy is still in a state of recovery,’ said Soumitra Dutta, Roland Berger Professor of Business and Technology at INSEAD and editor of the study. ‘The GII has evolved into a valuable benchmarking tool to encourage private-public dialogue including policy-makers, business leaders and other stakeholders.’

WIPO Director General Francis Gurry stressed that ‘Innovation is central to economic growth and to the creation of new and better jobs. It is the key to competitiveness for economies, for industries and for individual firms.’ He added that ‘innovation and its many benefits do not come without the investment of time, effort and human and financial resources,’ noting that this report captures efforts by a large number of economies to provide an enabling environment that promotes innovation.

The five Nordic economies—Sweden (2nd), Finland (5th), Denmark (6th), Iceland (11th), and Norway (18th)—have very strong performances globally as well as regionally. Within the European Union (EU), the Netherlands and the UK are in the top 10, followed by Germany (12th), Ireland (13th), Luxembourg (17th), and Austria (19th) in the top 20.

The GII includes 16 economies from the Middle East and North Africa, of which two—Israel (14th) and Qatar (26th)—are ranked among the top 30; both high-income economies. Among Sub-Saharan African economies, Mauritius (53rd overall) achieves the top regional spot while South Africa (59th) is the runner-up. Ghana comes next at position 70, and ranked first among economies classified as low-income, all regions combined.

In Latin America and the Caribbean, Chile comes first (ranked 38th), followed by Costa Rica (45th) and Brazil (47th) among the top 50.

Of the four economies from South Asia in the GII, India is ranked 62nd overall, followed by Sri Lanka (82nd), Bangladesh (97th), and Pakistan (105th). From East Asia and the Pacific, besides the leading positions of Singapore (3rd) and Hong Kong (SAR, China, 4th), five more are in the top 30: New Zealand (15th), the Republic of Korea (16th), Japan (20th), Australia (21st), and China (29th), the top-ranked emerging economy.

Dr. Naushad Forbes, Chairman of the CII Innovation Council 2011-12 and Director of Forbes Marshall commented: ‘Today the whole world is talking about innovation in all forms starting from industry to government to society. After the recent economic slowdown the focus has shifted clearly towards the developing regions not only in terms of a booming potential market but also a hot spot for frugal innovations. Measuring this shift is important to know how we are doing, the GII is a starting point to do that and unquestionably in the right direction.’

The Global Innovation Index is computed as an average of the scores across inputs pillars (describing the enabling environment for innovation) and output pillars (measuring actual achievements in innovation). Five pillars constitute the Innovation Input Sub-Index: 'Institutions,' 'Human capital and research,' 'Infrastructure', 'Market sophistication' and 'Business sophistication'. The Innovation Output Sub-Index is composed of two pillars: 'Scientific outputs' and 'Creative outputs’. The Innovation Efficiency Index, calculated as the ratio of the two Sub-Indices, examines how economies leverage their enabling environments to stimulate innovation results.

The top 10 economies in the Innovation Efficiency Index are Côte d’Ivoire, Nigeria, China, Pakistan, Moldova, Sweden, Brazil, Argentina, India, and Bangladesh. Three BRIC economies (Brazil, India, and China) are in this select list, with the fourth, the Russian Federation, coming in at 52nd place. By region, the best performers are Côte d’Ivoire (1st), China (3rd), Pakistan (4th), Moldova (5th), Brazil (7th), Jordan (16th), and the US (26th). By income group, in descending order of income, leaders are Sweden (6th), Brazil (7th), Côte d’Ivoire (1st), and Bangladesh (10th).

Ben Verwaayen, CEO of Alcatel-Lucent, said: ‘The world faces many daunting societal challenges, which require bold, creative leaps to meet them. We need an environment where open innovation can thrive and be supported by dynamic collaboration between industries, enterprise, governments and the scientific community.’

Shumeet Banerji, Chief Executive Officer of Booz & Company added: ‘The ability to innovate is the great equalizer in the global economy. In the industrial era, nations relied on their natural resources to compete. Today, any country can advance with carefully focused investments in talent and R&D. The performance of some emerging economies in this year's GII shows what nations can accomplish with a focus on building 21st century economies.’