Index shows the global innovation gap is growing

Innovation is increasingly important for both developed and emerging economies as they seek to develop solutions to complex challenges, gain competitive advantage in key industries and technologies and provide better living standards for their citizens.

The race to the top in innovation is epitomised by the keen attention given to the annual Global Innovation Index, in which higher education, and education more broadly, are crucial and enduring building blocks.

The rankings measure innovation inputs – institutions, human capital and research, infrastructure and market and business sophistication – and innovation outputs – such as patents, research articles and creative outputs. This year’s Global Innovation Index reveals that it is hard to change the status quo. It is a long haul to the top for newcomers and the incumbents appear entrenched.

Higher income European nations and the United States dominate the rankings, as they have done for many years. Switzerland is in first place for the seventh year in a row, while of the top 25 nations, only Singapore, Japan, South Korea, China and Hong Kong feature among Asian countries. The emerging powerhouse is China, which has moved into 22nd place from 25th place last year.

The lesson of the rankings is that countries with a broad base of innovation capabilities, including highly ranked universities, a strong performance from science and engineering graduates, strong industry and university research collaboration, an ability to share knowledge with industry and a competitive business environment and leading institutions, among other things, do very well.

Growing gap between middle- and high-income countries

Middle-income countries, with the exception of China, are significantly under-represented in the top echelons. After China, the next best middle-income country is Bulgaria at 36th place. In fact, as the index shows, the gap between high- and middle-income economies in terms of innovation performance and outlook is widening.

This is concerning in the context of growing inequality generally among and between nations and could further fuel protectionist sentiments around innovation as better placed nations seek to protect their advantages.

However, it is not all doom and gloom. As mentioned, China is moving up the ranks by enhancing the quality of its innovation (not just its quantity and scale) as reflected by its universities being increasingly highly ranked, by higher quality publications and a stronger patenting performance. Meanwhile India, at number 60, is performing better on innovation than its gross domestic product per capita would imply.

Further, there is evidence of some real promise among the next tier of emerging Asian economies of Malaysia, Thailand, Vietnam, the Philippines and to a lesser extent Indonesia and Cambodia.

Although not commanding that much attention as yet and still occupying the middle to lower ranks, these economies display some important characteristics.

First, their innovation efficiency rankings are generally higher than their overall rankings. This means that they have a significant ability to translate existing inputs such as education, training and research into knowledge outputs (for example, high technology industries) for tangible social and commercial gain. Developing further cutting-edge ways to share knowledge such as publications and boosting tertiary enrolment remain key challenges.

Second is the importance of science and engineering graduates for fuelling the industries of the future. Again, for these countries ranking on this criterion generally exceeds their overall rankings. In fact, Malaysia is ranked seventh in the world for numbers of science and engineering graduates and the Philippines 27th. Also, these economies, with some exceptions, have made inroads in terms of having a reasonably solid core of ranked universities. Broadening the base of higher education excellence would appear to be a further key priority.

Third, these economies also tend to be ‘linked’ in the sense of displaying solid performance on university and industry research collaboration, on cluster development and on the exploitation of research talent by business enterprises (the Philippines is ranked eighth in the world on this criteria). This bodes well for fully functioning innovation eco-systems.

Fourth, they show a strong performance on exporting creative goods (as a percentage of total trade). For example, Malaysia is ranked second in the world on this criterion, Thailand fifth, Vietnam seventh and Indonesia 13th. This suggests that these economies are successfully linking innovation with culture and tradition, building on locally based advantages to harness global advantage.

Overcoming weaknesses

On the other side of the coin, however, there are still significant weaknesses in these nations with regard to their business and institutional environments, including regulatory settings, ease of doing business and political stability, and with regard to weaker performance on attracting international students (with the exception of Malaysia).

Accessing the flows of ideas, know-how and connections that international mobility brings could be the key to further future success. Further, an important challenge will be to become more embedded in regional and global hubs of knowledge, research and technology transfer.

A final point: while the Global Innovation Index provides a wealth of detail, information on outward student mobility and the impact of immigration and emigration on knowledge flows could be useful.

Dr Anand Kulkarni is a consultant and principal adviser at Victoria University in Australia. Kulkarni’s book on India and the Knowledge Economy, published by Springer, is expected at the end of 2017.


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Viet Nam ranks 47th overall & 9th in Asia.

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