July 3, 2011

INSEAD Issues: The Global Innovation Index 2011

Middle East economies Qatar and the UAE ranked in the top 40 out of 125 economies around the world. Partners with Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry, and the World Intellectual Property Organization.

INSEAD, the leading international business school, today announced the findings of The Global Innovation Index (GII) 2011 edition. Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry, and the World Intellectual Property Organization are Knowledge Partners in the project. Created in 2007, the GII is a composite indicator that synthesizes metrics on enablers and results of innovation in emerging and industrialised countries.

This year’s GII includes 16 countries from the Middle East and North Africa, of which only two—(Qatar (26th) and the United Arab Emirates (34th)—are ranked among the top 40. Three countries from the region are within the bottom 25 including the Syrian Arab Republic, Yemen, and Algeria. Qatar and  the United Arab Emirates, Bahrain (46th), Kuwait (52nd), Saudi Arabia (54th) and Oman (57th) are the high-income economies in the region.

"Innovation is critical to driving growth in both developed and emerging economies, especially during a time when the global economy is still in a state of recovery," said Soumitra Dutta, Roland Berger Professor of Business and Technology at INSEAD and editor of the study. "The GII has evolved into a valuable benchmarking tool to encourage private-public dialogue including policy-makers, business leaders and other stakeholders."

The Global Innovation Index examines how countries leverage their enabling environments to stimulate innovation results. Five pillars constitute the Innovation Input Sub-Index: "Institutions," "Human capital and research," "Infrastructure", "Market sophistication" and "Business sophistication". The Innovation Output Sub-Index is composed of two pillars: "Scientific outputs" and "Creative outputs".

Karim Sabbagh, Senior Partner and the global leader of the Communications, Media, and Technology practice at Booz & Company added: "The ability to innovate is the great equalizer in the global economy. In the industrial era, nations relied on their natural resources to compete. Today, any country can advance with carefully focused investments in talent and R&D. The performance of some emerging economies in this year's GII shows what nations can accomplish with a focus on building 21st century economies."

"Innovation is central to economic growth and to the creation of new and better jobs," said WIPO Director General Francis Gurry. "It is the key to competitiveness for countries, for industries and for individual firms. It is the process by which solutions are developed to social and economic challenges as well as the source of improvements in the quality of all aspects of our material life."

"Governments have recognised that, in order to take advantage of the potential that innovation represents for their citizens, they must adopt policies that are friendlier towards technological advances and the absorption of knowledge so that companies can build global innovation networks so that they can foster trans-border flows of knowledge and intellectual property", said Chadi Moujaes, Principal at Booz & Company.

Ben Verwaayen, CEO of Alcatel-Lucent, said: "The world faces many daunting societal challenges, which require bold, creative leaps to meet them. We need an environment where open innovation can thrive and be supported by dynamic collaboration between industries, enterprise, governments and the scientific community."

In this light, the Report highlights those countries that achieve more from lesser conditions, as well as those that lag behind in fulfilling their innovation potential by means of the Innovation Efficiency Index—the ratio of the Output score over the Input score.

Dr. Naushad Forbes, Chairman of the CII Innovation Council 2011-12 and Director of Forbes Marshall  commented: "Today the whole world is talking about innovation in all forms starting from industry to government to society. After the recent economic slowdown the focus has shifted clearly towards the developing regions not only in terms of a booming potential market but also a hot spot for frugal innovations. Measuring this shift is important to know how we are doing, GII is a starting point to do that and unquestionably in the right direction."

The Report includes analytical chapters to expose recent global innovation trends that can hardly be captured by traditional metrics. These were provided by Knowledge Partners, all leading actors in the area of innovation. Topics include: affordable innovations in India; insights on innovation in Latin America; the smart and sustainable cities; the global footprint of R&D, and metrics on creativity and copyright-related industries.

The GII Is A Collaborative Effort

Knowledge Partners participated actively in the project by providing their input to the research underlying the GII, and contributing to the dissemination of the results. In addition, in 2011 for the first time, an Advisory Board comprised of nine international practitioners and experts who bring unique knowledge and skills in the realm of innovation was created to assist with the research and the dissemination of results.

Although the general framework of past editions was maintained, important efforts were made this year to incorporate novel objective metrics from international organizations and private sources. The European Commission Joint Research Centre (Ispra, taly) performed an independent assessment of the robustness of the GII 2011 results by means of a thorough Statistical Audit, the results of which are included in the Report.