Why Your Country’s Global Innovation Index Ranking Matters

Innovation- They key for success
Global Innovation
Innovation is not just the key for success in the tech industry – it’s integral for the success of any country.

Can you give us a bit of background on the Global Innovation Index? What is its purpose?

The Global Innovation Index (GII) was launched in 2007 with the goal of measuring and capturing the intricacies of innovation in global societies. Before the GII, traditional metrics of innovation were limited to qualities like the number of existing research articles or the level of research and development (R&D) expenditures. The GII takes a more holistic approach by considering other aspects also associated with innovation—such as creativity and culture—along with these more traditional metrics.

The GII helps to create an environment in which innovation factors are under continual evaluation. The GII also serves as a key tool for decision-makers and offers a rich database of detailed metrics for refining innovation policies. The GII is not meant to be the ultimate and definitive ranking of economies with respect to these aspects. Instead, it is intended to be seen as a tool for action.

With innovation being a central driver for economic growth and development, do you think innovation performance depends on economic growth—or vice versa?

In my view, both of these depend on each other. Within the frame of economic growth theory, innovation is key for the creation of markets. These markets offer new or improved products or processes that differ from those previously offered to consumers. In turn, some of these innovations become internalized in market-creation processes, helping them become more efficient. These new markets can then help to create the type of added value that cycles back into the economy in many ways—in the form of jobs, improved quality resources, greater savings, and the like—ultimately promoting economic growth.

In the other direction, it’s also fair to say that economic growth―understood as an expansion of resources―is also a factor that helps promote innovation. But, innovation also happens beyond the market economy. According to some theorists, regions with more sophisticated market economies and diversified resources have a higher probability of inducing longer and more productive economic expansion cycles based on innovation.

How do you define innovation when evaluating a country’s performance?

In the Global Innovation Index (GII) we measure innovation performance though 80 indicators distributed into seven pillars. These pillars are divided into inputs (Institutions, Human Capital & Research, Infrastructure, Market, and Business Sophistication) and outputs (Knowledge & Technology, Creative).

In conjunction, these allow us to obtain a score for each economy. These scores can then be ranked, ultimately offering the GII ranks.

All indicators in tandem provide a snapshot of the local innovation ecosystem operating in each of the economies reviewed. This information also allows us to pinpoint comparative strengths and areas of opportunity for each of these economies.

The GII also serves as a key tool for decision-makers and offers a rich database of detailed metrics for refining innovation policies.

The information provided by the GII can prove useful for countries looking to improve their innovation policies. Have you seen countries shape their innovation policies based on analyses provided by the GII?

We have seen multiple initiatives along this line. Aside from releasing an annual report, the GII helps define ad hoc policy recommendations through workshops and high-level meetings for the economies that require these services.

A particular case where these efforts have been more tangible is India. Their government is currently developing a local innovation index in collaboration with the GII. This initiative has had an impact on various areas, ranging from the development of data management technologies to improvements in data collection procedures―all with local policy implications.

You once worked as the Technology and Economic Advisor to the Senate of Mexico, and also as a board member for the President of Mexico on the Investment Advisory Board. With your particular experience in mind, how do you suggest a country can improve their GII ranking? For example, Mexico currently ranks at the 56th position. How could they improve their current ranking, considering the fact they didn’t typically rely on investment as a strategy for growth?

Fostering coordination between different term policies and improving harmonization between public and private institutions will be key for Mexico. Defining and maintaining the policy instruments that facilitate these actions beyond administration terms can help develop the environments where innovation is more likely to thrive. Mexico would also benefit from better coordination among its varying local authorities responsible for framing and implementing policies related to innovation. Additional reforms aimed at modernizing infrastructure and strengthening institutions can further improve conditions to boost local innovation.

In addition to structural reforms, further efforts to allow the local population to contribute more actively to higher economic growth are still needed—the lack of these is currently a weakness for Mexico. These policies can include the design of comprehensive programs to boost the skills of the local population, through both education and exposure to the labor markets. In the mid- and long-term, this can allow for higher levels of competitiveness, by moving beyond already consolidated sectors (like automotive and manufacturing) and into innovation-laden research and productive areas with a high international projection (like biotechnology, software, cultural and creative services).

Defining and maintaining the policy instruments that facilitate these actions beyond administration terms can help develop the environments where innovation is more likely to thrive.

By now we know that innovation isn’t just a privilege limited to high-income economies—it can also happen at the grassroots level. How do the lower-ranking countries get to their full potential?

Innovation is most certainly not an exclusive privilege of high-income economies. Each year, we identify within the GII a series of non-high-income economies that appear to be innovating beyond their expected level of performance. For these middle- and low-income economies, two factors seem to be key: solid institutions and an advanced business environment. Based on these findings, we believe that promoting the development of both of these areas can be an initial step for the creation of healthy local innovation ecosystems.

Do you think China is paving a way for similar middle-income economies to rise? How so?

China is an atypical case. Besides being a large economy, it’s an example where both substantial resources and a sufficiently developed innovation ecosystem meet. The two other upper-middle-income economies approaching this group are Malaysia (35th) and Bulgaria (37th)—and these are still at a considerable distance.

One takeaway for other middle-income group peers is China’s consistent high performance in core input sectors, specifically those that expand human capital and research, maintain a solid infrastructure, and promote both market and business sophistication. For China, these traits appear to have had a positive impact on both knowledge, technology, and creative outputs as measured by the GII.

Today’s challenge is to stimulate economic growth that is global, equitable and sustainable. This requires a fierce commitment to innovation in order to create long-term opportunities. How do you see this happening over the next 2 years for low and middle-income economies like in Southeast Asian, Sub-Saharan African, and Latin America?

Regional policy integration and coordination will be key. Efforts to improve innovation investments, promote more coordinated innovation systems, and broader regional R&D and innovation cooperation are expected to rise in these regions. These are tools that can help reduce the effects of negative local conditions and help these regions move towards paths that have been identified as more successful by the GII in other regions.

One last question. How do you stay innovative in your work? Do you have a “work hack” that allows you to work more effectively, or a source of inspiration that allows you to maintain an innovative mindset?

I like reading about cutting-edge technologies and about research happening at the fringe of scientific development. I also listen to minimal techno while I work. For me, this genre of music is quite innovative and makes me realize that I am living in the year 2018!

Dr. Rafael Escalona Reynoso is Lead Researcher at the Global Innovation Index since October 2013. His research experience at Cornell University includes comparative studies between Mexico and Spain on the regulatory aspects of Modern Biotechnology and Biosafety of GMOs (genetically modified organisms) and on the reaches of IPRs (intellectual property rights) in the Information Technologies Era. He holds a PhD in Regional Planning and a Masters in Public Administration from Cornell University as well as a B.A.in economics from Universidad Panamericana in Mexico City, Mexico.

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Illustration by Katarzyna Bogucka