Fourth edition Five Knowledge Partners

The GII is a collaborative effort

Eight month consultative approach

Advisory Board of nine international experts

Statistical Audit by the Joint Research Centre of the European Commission, which developed, jointly with the OECD, the Handbook on constructing composite indicators (2008)

Five analytical chapters provided by Knowledge Partners

‘An innovation is the implementation of a new or significantly improved product (good or service), process, or method in

business practices, workplace organization, or external relations.’ (Oslo Manual, 2005)

125 economy profiles

80 data tables with indicators from public and private sources (59 hard statistics, 15 composite indicators, 6 survey questions)

Transparent and fully replicable computation methodology

Regional overviews, and performances within income group (World Bank classifications)

Global coverage

Broad scope

Effort to capture innovation in emerging markets

Innovation indicators

Traditional indicators …

• Education expenditure• Tertiary enrolment• Gross expenditure on R&D• Scientific and technical journal

articles• Domestic credit to private sector• National office and PCT patent

applications• Scaling by population

complemented by novel metrics

• School life expectancy• Tertiary inbound/outbound

mobility• R&D financed by abroad/business• Venture capital, joint venture,

strategic alliance deals• Microfinance gross loan portfolio• PCT patent filings with at least

one foreign inventor• Scaling by GDP in PPP$

INPUTRoyalty and license fees’ payments

Foreign Direct Investment net inflowsComputer & comm. service imports

High-tech imports

OUTPUT… receipts… outflows… exports… exports

Knowledge absorption v. knowledge diffusion‘Innovations: new to the world, new to a sector, new to a firm’

Most studies agree that the commercial introduction of innovations developed elsewhere constitutes an innovation.

Top 10 GII 2011 Sweden tops the Output Sub-Index, only

economy in the top 10 on all 4 indices Singapore tops the Input Sub-Index China only emerging economy in the top 30 Among lower-middle-income economies, China

tops the three indices Input (43), Output (14) and GII (29)

Among upper-middle income economies, Malaysia tops the ranking on GII (31) and Input (27), Brazil on Output (32)

Among low-income economies: Ghana leads on GII (70) and Input (65), Bangladesh on Output (65)

1. Switzerland

2. Sweden

3. Singapore

4. Hong Kong (SAR), China

5. Finland

6. Denmark

7. United States

8. Canada

9. Netherlands

10. United Kingdom

Top 3 by region All regions with at least one economy in the

upper half (<63) Although less developed, East Asia and the

Pacific (EAS) at par with Europe and Central Asia (ECS)

Europe led by Nordic and EU15 economies, EU12 economies doing better than Mediterranean economies

Best scores on Institutions (mean > 50/100) and Market sophistication (mean > 30/100)

US (7), Canada (8)

Switzerland (1), Sweden (2), Finland (5)

Singapore (3), Hong Kong, (SAR, China, 4), New Zealand (15)

Israel (14), Qatar (26), United Arab Emirates (34)

Chile (38), Costa Rica (45), Brazil (47)

India (62), Sri Lanka (82), Bangladesh (97)

Mauritius (53), South Africa (59), Ghana (70)

Top 3 by incomeHI High-income

Switzerland (1)Sweden (2)Singapore (3)

UM Upper-middle-incomeMalaysia (31)Chile (38)Lithuania (40)

LM Lower-middle-incomeChina (29)Moldova (39)Jordan (41)

LI Low-incomeGhana (70)Kyrgyzstan (85)Kenya (89)

High-income economies ahead in the rankings Some lower-middle income economies are highly

efficient Low-income economies are catching-up on their

enabling environments

1. Innovation leaders are found outside OECD countries2. All regions show potential as hubs of innovation,

companies and organizations need to look at global networks

3. Biggest progress in Institutions and Market sophistication

Key result 1Innovation has become global

1. China is the only developing economy in the top 30 (ranked 29th)

2. East Asia and the Pacific (EAS) and the Middle East and North Africa (MEA) have similar income structures, the former prevails in the rankings, at par with Europe and Central Asia (ECS)

3. Latin America and Caribbean economies show average performance in the rankings, South Asia and Sub-Saharan Africa with some challenges to take-off

Key result 2Some emerging economies stand out

1. Top 10 of the Efficiency Index top10 includes six densely populated economies: Nigeria, China, Pakistan, Brazil, India and Bangladesh

2. Those with challenges in converting their enabling capabilities into results: Malaysia, Chile, Lithuania and South Africa (top 40 on Input, lower on Output)

3. South Asian economies highly efficient (Bangladesh, India, Pakistan, Sri Lanka): Input Sub-Index ranks within 87th and 123rd, Output Sub-Index ranks within 44th and 69th

Key result 3Innovation efficiency matters

1. Many different roles for different actors: action and cooperation

2. Governments must adopt policies friendlier towards technological catch-up and the absorption of knowledge

3. Relevance of venture capital , joint ventures, strategic alliances, dynamic stock markets, increased employment in knowledge-intensive services, etc.

Key result 4Need for multi-stakeholder action

1. This is not the 'ultimate ranking' but part of a journey to better understand, measure and facilitate innovation

2. Some linkages are confirmed in the data: deficits in the Human capital and research pillar lead to mediocre performances on Scientific outputs

3. But need for better statistics, with greater economy-coverage1. Prominence of trade-related variables over output variables2. Importance of count variables over value variables3. Weakness of creative output pillar due to lack of statistics4. Challenges in comparisons year to year

Key result 5Challenges in measuring innovation

Back Up Slides

Switzerland (1, HI): Strengths and weaknesses

Trademark registrations filed through the Madrid System

1 Strength of investor protection 119

Total value of stocks traded 1 Ecological footprint and biocapacity

105

Press freedom 1 Creative services exports 97Applied tariff rate 1 Gross capital formation 76Computer software spending 1 Time to start a business 75Patent applications filed through the PCT

1 Growth rate of GDP per person engaged

69

Scientific and technical journal articles

2 Imports of goods and services 58

University/industry collaboration on R&D

2 Online participation 56

Quality of research institutions 2 Tertiary outbound mobility 49Employment in knowledge-intensive services

3 GERD financed by abroad 48

Singapore (3, HI): Strengths and weaknesses

Joint ventures / strategic alliances deals

1 Ecological footprint and biocapacity

115

Rigidity of employment 1 Share of renewables in energy use

109

Employment in knowledge-intensive services

1 Growth rate of GDP per person engaged

106

Government effectiveness 1 Press freedom 98State of cluster development 1 Expenditure on education 95Imports of goods and services 1 Creative services exports 79Royalty and license fees payments

1 Trademark registrations filed at the national office

79

Regulatory quality 1 Depth of credit information 66High-tech exports 1 Pupil-teacher ratio 65Exports of goods and services 1 Creative goods exports 54

China (29, LM): Strengths and weaknesses

Patent applications filed at the national office

1 Press freedom 122

Assessment in reading , maths, science (Shangai)

1 Total tax rate 115

Total value of stocks traded 1 Expenditure on education 115Utility model applications filed at the national office

1 Imports of goods and services

112

Firms offering formal training 1 Time to start a business 104Gross capital formation 2 Employment in knowledge-

intensive services 95

High-tech exports 3 School life expectancy 87Growth rate of GDP per person engaged

3 Exports of goods and services

87

High-tech imports 4 Tertiary outbound mobility 85Creative goods exports 4 Regulatory quality 83

Malaysia (31, UM): Strengths and weaknessesGERD performed by business enterprise

1 Gross capital formation 114

Depth of credit information 1 Foreign direct investment net inflows

106

High-tech imports 1 Press freedom 103GERD financed by business enterprise

1 Ecological footprint and biocapacity

91

Legal rights strength to get credit 1 Cost to start a business 83Tertiary graduates in engineering 2 Share of renewables in energy

use82

High-tech exports 2 GDP per unit of energy use 81Strength of investor protection 4 Scientific and technical journal

articles79

Exports of goods and services 6 Public expenditure on education per pupil

78

Joint ventures / strategic alliances deals

8 GERD financed by abroad 73

Brazil (47, UM): Strengths and weaknesses

Creative services exports 1 Imports of goods and services 125Ecological footprint and biocapacity

7 Time to start a business 123

Firms offering formal training 13 Exports of goods and services 122Computer and communications service exports

15 Total tax rate 120

Computer and communications service imports

16 Foreign direct investment net outflows

117

High-tech imports 19 Tertiary outbound mobility 117Trademark registrations filed at the national office

23 Rigidity of employment 106

Market capitalization 23 Gross capital formation 105ICT and business model creation

23 Gross tertiary outbound enrolment

103

Share of renewables in energy use

24 Legal rights strength to get credit

97

India (62, LM): Strengths and weaknesses

Computer and communications service exports

4 Pupil-teacher ratio 115

Creative goods exports 9 Total tax rate 114Gross capital formation 9 Cost to start a business 111Total value of stocks traded 13 ICT use 109Market capitalization 19 Political stability 108Legal rights strength to get credit

19 ICT access 108

Growth rate of GDP per person engaged

21 Exports of goods and services 107

Daily newspapers circulation 22 Tertiary outbound mobility 106Intensity of local competition 27 Imports of goods and services 105Creative services exports 29 School life expectancy 103

Ghana (70, LI): Strengths and weaknessesShare of renewables in energy use 10 Applied tariff rate 111

Legal rights strength to get credit 19 Creative goods exports 110

Foreign direct investment net inflows 20 Governments online service 109

Growth rate of GDP per person engaged 23 ICT use 106

Press freedom 25 Electricity consumption 103Tertiary graduates in science 31 Electricity output 102Strength of investor protection 34 School life expectancy 101Public expenditure on education per pupil 34 ICT access 101

Joint ventures / strategic alliances deals 35 Tertiary school enrolment 100

Microfinance institutions gross loan portfolio 38 Domestic credit to private

sector 95