Strategy. Innovation. Brand.

Does Happiness Cause Innovation? Or Vice-Versa?

I'm happy being innovative.

I’m happy being innovative.

Does happiness cause innovation? Or is it the other way round: does innovation cause happiness? Or is there a third variable that causes both happiness and innovation to vary together?

In the past, I’ve written about measures of national happiness (here and here) and measures of innovation (here, here, and here). I’ve been wondering: are happiness and innovation correlated? It seems like a reasonable thought but I haven’t had any evidence to make an inference. Until now.

I’ve just been reviewing the Global Innovation Index of 2012 (the GII) as published by INSEAD (the business school) in conjunction with the World Intellectual Property Organization (part of the UN). One of the goals of the GII is to develop effective measures of innovation that can be applied at the national level. INSEAD has published the report annually since 2007. Each year, it evolves and adds new variables. In theory, each year it becomes a better reflection of the true state of innovation around the world. In the 2012 edition, the report incorporates about 80 different variables.

What struck me immediately was the relationship between the GII and the World Happiness Report that I’ve written about before. While researching this article, I also stumbled across the Legatum Institute‘s ranking of national happiness. Though Legatum uses a different method, the results closely match the World Happiness Report. Indeed, the top ten countries in each report are the same — though in different order.

So, how does happiness relate to innovation? Look at the table below, which compares the top ten countries in the World Happiness Report (WHR), Legatum, and the Global Innovation Index (GII). Half of the top ten most innovative countries (with *) are also among the world’s happiest countries. The correlation seems to grow stronger if you look past the top ten. For instance, the USA is 11th on the WHR and ninth on the GII. Similarly, Canada, New Zealand, and Norway are 11th, 12th, and 13th on the GII and all three are in the top ten of both WHR and Legatum.

Why should happiness be related to innovation? I’m not at all sure. Part of the reason I’m publishing this is to ask my readers: what do you think? Let’s gather the best ideas and see if we can test them logically. Over to you.

WHR Legatum GII
1 Denmark Norway Switzerland *
2 Finland Denmark Sweden *
3 Norway Sweden Singapore
4 Netherlands Australia UK
5 Canada New Zealand Netherlands *
6 Switzerland Canada Denmark *
7 Sweden Finland Hong Kong
8 New Zealand Netherlands Ireland *
9 Australia Switzerland USA
10 Ireland Ireland Luxembourg

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