Which Country Is The Most Innovative?

Earlier this year, I wrote about the Global Innovation Index for 2012 (and its relationship to happiness research). The 2013 GII report was recently published and surveys 142 different economies.  Here’s how the Top 10 countries shifted from 2012 to 2013.

The first thing you’ll notice is that the same countries dominate the leader board. Luxembourg has dropped out of the Top 10 and Finland has moved in but, otherwise, the countries are the same. The second major item is that the Nordic countries — Sweden, Finland, and Denmark — rate quite well. (Additionally, Iceland is 13th and Norway is 16th — all the Nordic countries are in the Top 20). These countries also dominate the leadership slots in research on national happiness. Apparently, there’s a connection between happiness and innovation.

You’ll also notice that Switzerland and Sweden take the first two positions in both years. The GII uses 84 indicators to rank countries on their ability to innovate. Switzerland and Sweden score high across the board. In terms of innovation, both countries deliver very balanced performance.

With the theme, “The Local Dynamics of Innovation” this year’s report looks not only at national level metrics but also at very specific, local phenomena. Here are some findings:

• Innovation hubs – these are physical locations such as Silicon Valley, Baden-Württemburg in Germany, or the Mumbai region in India. Typically, large enterprises serve as “hub champions” but government programs and policies can also play a major role. The hubs provide ideas, capital, and connections and create a virtuous circle — success breeds success.

• Democratization of innovation – companies and governments all over the world are investing in innovation and innovation hubs. The Internet has democratized innovation as has the rise of English as the global language of business. The report suggests that the region that has made the greatest strides in innovation is Latin America, with Costa Rica leading the way.

• Open innovation is growing – this is the opposite of the not-invented-here syndrome. Ideas are open and shared. Companies grant their ideas to third parties and use ideas from multiple sources. Sources may include companies, universities, or government research programs.

• Innovation is recovering – after a sharp drop in 2009, companies and governments have resumed investing in innovation. For instance, worldwide patent applications grew 7.5% in 2010 and 7.8% in 2011, significantly higher than before the crisis.

I’ve always thought that innovations result from collisions. As people, ideas, and cultures collide, creative combinations emerge in the form of innovations. The Global Innovation Index seems to confirm this on a global scale. Democratization, openness, and the hub concept suggest that “collisions” are happening more frequently and more pervasively. If so, we should see an acceleration of innovation over the next decade.