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Global Innovation Index 2011 – Switzerland Ranks First


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
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Posted: Jul 1, 2011 @ 12:44 pm
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INSEAD, one of the world’s leading and largest graduate business schools, yesterday announced the findings of The Global Innovation Index (GII) 2011 edition. Partners for the report were Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry (CII), and the World Intellectual Property Organization (WIPO).

According to INSEAD, Switzerland is the most innovative country in the world, gaining three spots from its position in last year’s GII. Sweden and Singapore follow in the 2nd and 3rd positions, respectively. This year’s rankings include 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.

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.

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 also includes 16 economies from the Middle East and North Africa, of which two—Israel (14th) and Qatar (26th)—are ranked among the top 30. 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.

“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 explained 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.

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.”

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.”

The top ten economies in the GII 2011 ranking are:

  1. Switzerland
  2. Sweden
  3. Singapore
  4. Honk Kong (SAR)
  5. Finland
  6. Denmark
  7. United States
  8. Canada
  9. Netherlands
  10. United Kindgom

About the Author

is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

4 comments
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  1. hi Gene!
    i read selected portions of this report yesterday(the ones relating to patents because as a patent attorney, i am always curious to see how business schools including INSEAD manage the patent concepts in their reports) and i have to admit that i am skeptical about the conclusions you can draw from this report .when you look at the patent hypothesis taken into account to compute their GII(this index by the way reminds me the supposedly wonderful index defined by this patent troll to measure the value of a patent and consequently the price for getting a license) here is what you get:.
    index 6.1.1(nat. pat appl.), NZ Moldavia Mongolia Georgia KAZAKSTAN, Iran are in the top 15!
    index 6.1.2:PCT applications are considered:while PCT is a route for filing it has never been a way to get a patent right(no patent is granted by WIPO).I understand WIPO is part of the sponsors but …and of course WIPO is in switzerland..if swizerland and finland are the first 2 in this index it’s probably more because of the pct filing policies of the big international groups in these two countries(including foreign filings of inventions first filed outside those countries by their affiliates) than the innovation capacity of the residents(this may not be true for swizerland
    by the way)
    index 6.1.3: Utility models applications:waouh!!ukraine, mongolia, moldova, tajikistan, estonia, georgia..are in the top ten!!!!! and USA is not available!!!lol!
    6.3.1 royalty and license fees:guyana and paraguay are the top 2!waouhhh!! never seen a priority application from guyana or paraguay during my entire carreer in the patent world:these incredible license incomes for these two countries are undoubtly not related to technology born in those countries.
    index 7.1.1 and 7.1.2:i do not catch the link between innovation and trademarks filed:while you launch new products under new trademarks , the birth of new trademarks is not linked to
    “innovation”(novelty) but to availability of the name (even if not new).
    i don’t know how those indexes are weighted in their global innovation index, but if all other indexes have the same flaws as the patent/technology indexes hereabove, i wander what kind of reliable information you can get from there!

  2. Whether Switzerland (where I live and work) merits the No.1 position I cannot say, but there’s no doubt that it is remarkably innovative. The country has only 7 million people and probably could be lost (and never again found) in a corner of some of the US’s larger states. But consider:
    (i) Little Basel is home to two pharma giants, two specialty chemical giants and a host of other chemical/pharmaceutical companies;
    (ii) The world’s biggest and second biggest flavour and fragrance companies (respectively Givaudan and Firmenich) reside in Geneva, about a mile from each other;
    (iii) The world’s biggest food company, Nestlé, is Swiss.
    In addition to these big boys, there is a host of other little boys, who are giants in their specialised fields. For example, the biggest manufacturer of dental implants is in Basel. Synthes, recently bought by J&J, is a world leader in artificial joints. Being a little country surrounded by much bigger countries, the Swiss have learned to play to their strengths. The watch industry is the pinnacle of a vast engineering business. I recently attended the Holzmesse (Wood trade fair) in Basel. The ground floor was full of awesome machines for making furniture – and they were all German or Swiss. The Swiss may be famous (notorious?) for banking, but they have never forgotten how to make things, and make them well. And the proportion of patent attorneys to general population is one of the highest of any EPC Contracting State.

  3. Hi ‘Dude’,

    Hard as it is for we patent attorneys to accept, patents and patent applications form only a very small part of any objective measure of innovation activity within a national economy. The problem with reading ‘selected portions’ of the report is that you might miss the bigger picture. I recommend reading Chapter 1 in its entirety (including the Appendix on statistical verification) before dipping in to specific areas at random.

    A few points on the patent and trade mark statistics…

    First, the relevant measures are normalised to GDP, which means that tiny developing economies do not necessarily need to be generating patent applications in globally significant numbers in order to rank highly. It makes perfect sense to me that a small economy (e.g. New Zealand) whose residents are filing more patent applications per $bn GDP is generating knowledge more effectively than a larger economy (e.g. Australia) with fewer applications per $bn GDP. On this measure, NZ and the US are neck-and-neck and Australia (sadly) is lagging behind.

    Second, patent applications and licenses are used as measures of ‘knowledge creation’ and ‘knowledge diffusion’ within an economy. It is not necessarily appropriate to equate ‘innovation’ with global novelty. In this context the quality of knowledge generated is a separate issue, and of course a better objective measure of quality would be US patent grants. But quality is not necessarily the most important characteristic in a measure of the level of innovation in an economy.

    For example, 10-15 years ago it was widely recognised that while South Korea was producing increasing numbers of research publications and patent applications, many of these duplicated technologies already devised in developed economies. The same might have been said of Japan a few decades earlier, or of China in recent years. But all of these examples show that the growing numbers of research publications and patent applications were good predictors of where those economies were heading. If a culture of innovation exists in a developing economy, it will nonetheless spend some time playing catch-up before starting to surpass more-developed (but less innovative) economies.

    Thirdly, the statistical methodology employed in the study ensures that particular measures are not given any greater weight than is justified. All of the measures are generally considered to be indicators with some greater or lesser correlation to an underlying ‘latent’ variable which is not directly measurable. So, for example, the absence of a utility model system in the US does not penalise it, because there is presumably a corresponding greater use of utility patents. However, it would clearly be absurd to ignore utility model filings when there are countries (most notably China) where they are used extensively by innovative local companies.

    Finally, trade mark filings are presumably representative of underlying brand creation. Trade mark applications are linked not only to new products, but also to the creation of new companies, and (perhaps, in developing economies) entire new industries. Note that the measure in 7.1.1 is domestic residential trade mark applications. I would assume that innovative developing nations move from an era in which most of their registered trade marks are foreign (COCA COLA, PEPSI, NIKE, FORD, KFC…), to an era in which new applications are increasingly filed by local companies, and then further towards international filings as export industries develop.

    Mark

  4. hi tony!hi mark!
    i appreciate your comments.and nobody would blame you to consider that any kind of report should deserve consideration just because it is made by a reputable business school.
    my point is that you cannot trust an information which is based on data with so many flaws.and this is damageable to countries like switzerland which deserve better than that.(Tony my grandfather was swiss!i do not discuss the no 1 position of switzerland(most people in innovation business knew it already)but the suspicion drawn on that result due to the flaws in the data at the basis of this study)