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By the numbers: innovation goes global.

NOT THAT LONG AGO, any discussion about innovation started with the United States. Other nations were at best also-rans.

This is no longer true. Other governments have recognized a truth the United States embraced years ago, that innovation is a key driver of economic growth. They have embraced innovation strategies designed to spur prosperity and job growth.

This is clearly visible in the 2014 Global Innovation Index, the latest in a series published annually by Cornell University, The European Institute for Business Administration, and the World Intellectual Property Organization.

GII ranks 143 countries on 81 different indicators. The United States is sixth overall, trailing five European nations and just ahead of Singapore and Hong Kong. While the top 25 countries are all high-income economies, China (ranked 29th) and Malaysia (33rd) could break into the top tier in the very near future.

GII bases its rankings on two sets of factors. The first is inputs. Top performers combine stable, efficient institutions; strong investment in education and research; infrastructure to support innovation (including IT and communications technologies); modern, competitive markets; and business sophistication, including innovation linkages, knowledge workers, and knowledge absorption.

The second set of factors involves innovation outputs. These include knowledge and technology creation, impact, and diffusion; and creative outputs that embrace intangible assets, and goods and services.

The leaders in both sets of innovation factors vary widely, and offer several surprises. The United States may take pride in its entrepreneurial zeal, but it lags behind United Arab Emirates in joint venture deals; behind Luxembourg in knowledge workers; and behind New Zealand in ease of starting a new business.

The United States, however, continues to attract the world's top talent. "U.S. universities have been exceptionally effective in their quest to engage some of the most prominent people in the world, and have simultaneously created an ecosystem for entrepreneurs who have been able to establish some of the globe's biggest organizations," Chandrajit Banerjee, director general of the Confederation of Indian Industry, wrote in the report.

In fact, GII finds that the United States is home to a whopping 75 percent of migrant inventors from low- and middle-income countries. The largest countries of origin are China and India, followed by Russia, Turkey, Iran, Romania, and Mexico.

Relatively few researchers account for a major proportion of overall output, and these innovators are also the most mobile, GII notes. In addition to the United States, the United Kingdom, Switzerland, and Singapore are magnets for valued innovators.

Countries are only beginning to address their brain drain through government policies and economic liberalization. Gil gives Morocco as an example of a nation that has addressed a brain drain.

China now ranks as high as many high-income economies and outscores most in innovation quality. Yet this year India slipped back 10 places, in part because of challenges it faces in replicating throughout the economy the high standards found in its high-tech cities. Russia showed rapid improvement by rising 13 places to 49th.

Sub-Saharan Africa showed the greatest improvement in 2014. Of its 33 nations, 17 rose in the rankings while only 11 declined.

More surprisingly, this region outpaced all others in "innovation learners." These are nations that perform at least 10 percent higher than peers with similar gross domestic products. This shows "that something is happening even in the poorest parts of the globe regarding innovation, said the European Institute's executive director, Bruno Lanvin.

The 2014 Global Innovation Index report is available at


Business sophistication
  Knowledge workers                      Luxembourg
  University-industry collaboration      Switzerland
  Joint venture deals                    United Arab Emirates
  International patents                  Japan

  Government effectiveness               Finland
  Regulatory quality                     Singapore
  Ease of startups                       New Zealand

Human capital/Research
  Per-student spending/GDP per capita    Mozambique
  Tertiary engineering/science grads     Thailand
  Reading, math & science test scores    China
  University quality                     United Kingdom

  Use of information technologies        Sweden
  Online e-participation                 Kazakhstan
  Environmental performance              Switzerland
  Infrastructure and                     Mongolia
    capital formation/GOP

Market sophistication
  Importance of microfinancing           Bolivia
  Venture capital deals                  Israel


Knowledge/Technology Outputs
  Scientific & technical                 Iceland
    article productivity
  Quality of publications                Germany
  Rate of new business creation          Hong Kong, China
  Royalty/license receipts               United States
  Communications/IT exports              India
  High/medium-high-tech manufactures     Ireland

Creative outputs
  Resident trademark applications        Paraguay
  IT & organization innovation           Estonia
  Creative service exports               United Kingdom
  Global entertainment/media output      Australia


RANK    COUNTRY                    SCORE

1       SWITZERLAND                64.8
2       UNITED KINGDOM             62.4
3       SWEDEN                     62.3
4       FINLAND                    60.7
5       NETHERLANDS                60.6
7       SINGAPORE                  59.2
8       DENMARK                    57.5
9       LUXEMBOURG                 56.9
10      HONG KONG (CHINA)          56.8
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Title Annotation:TECH BUZZ: TRENDING
Author:Brown, Alan S.
Publication:Mechanical Engineering-CIME
Date:Jan 1, 2015
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