GII 2018: Which of the World’s Economies Are Innovating Efficiently?

July 31, 2018

By Edward Harris, WIPO News and Media Section

Why do some economies innovate more efficiently than others – translating their innovation investments into important outputs with greater value for money?

While the Global Innovation Index 2018 is most famous for its innovation ranking of 126 economies, WIPO and its GII partners also uncover insights by alternatively evaluating the GII’s 80 indicators, which range from R&D and education expenditures to international patent applications and mobile-app creation.

One set of findings shows how some economies are doing more with less – “efficient innovators” - handing an important tool to WIPO’s member states and others interested in fostering innovative economies.

The most successful of these so-called efficient innovators have found a policy mix that helps maximize return on innovation investments across the economy.

So which economies are the most efficient innovators?

In the chart above, the grey line indicates the prediction values of innovation inputs and outputs for all economies surveyed by income group. Those above the line are comparatively efficient innovators. Those below the line have work to do. The upper-right quadrant, far above the line, is the sweet spot: High-value inputs (like the availability of researchers or graduates in science and engineering) that result, efficiently, in high-value outputs (like high and medium-high tech manufactures).

Here you find countries like Switzerland (CH), the Netherlands (NL), Sweden (SE) and the United States of America (US). From the GII findings:

Among high-income countries, Switzerland, the Netherlands, Sweden, Germany, Ireland, Luxembourg, and also Hungary stand out for producing many outputs for their given level of inputs. For example, Switzerland is the top country in the GII 2018 in both areas that measure innovation results: creative outputs, and knowledge and technology outputs. In other words, it efficiently translates its investments in innovation into results.
Among upper-middle-income countries, China strongly overperforms in the efficiency relationship due, among others, to strengths including knowledge creation, including patent rates and publications, and knowledge impact, including trademarks and industrial designs. It is one of the only two upper-middle income economies, together with Malaysia, that have comparable levels of inputs and outputs as the high-income group.
Among lower-middle economies, Ukraine, the Republic of Moldova, and Viet Nam stand out as performing better than would be expected by their levels of inputs. Viet Nam, for example, over performs in productivity growth per worker, and it is the top country in its class for high-tech net exports. It is also relatively strong in creative goods exports and mobile app creation.
Among lower-income countries, Tanzania and Madagascar are efficient innovators.

“Efficient innovation” is just one of many ways the Global Innovation Index parses its rich data set, taking the GII insights beyond its reputed ranking - and adding an array of perspectives and comparisons than can help policy makers and business leaders find the right way to stimulate innovative activity.