Nigeria and the Global Innovation Index

"Without actions, the world would still be an idea."

Professor Georges Doriot

Founder, INSEAD

"Innovation creates social progress and improves the economic well-being of people. The invention of the wheel shortened the distance between locations; the telephone reduced our dependence on the wheel. Today the Internet, over fixed and mobile networks, connects people from around the world, changing the way we communicate, work, learn, and innovate."

Ken Hu

Deputy Chairman and Rotating Chief Executive Officer

Huawei Technologies

In the post ‘Pure Water’ Nigeria on November 6, 2013, this blog began to reflect on which level Nigeria was on the creativity and innovation field. There is a recognised metric document we can actually use to gauge the country’s position on the innovation scale. This metric is the Global Innovation Index. (This blog would however remark that while this document concentrates on the economic and business aspects of innovation, we are interested in innovation on a holistic scale. Be that as it may, we would still reflect on the Global Innovation Index as it is.)

In 2007, the first edition of the Global Innovation Index (GII) was co-published by INSEAD, a global graduate business school and some partners including Canon India Private Limited. Since then the Index has been published annually. In 2013, the sixth edition was co-published by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO).

The World Intellectual Property Organisation describes the Global Innovation Index as:

The Global Innovation Index (GII) is a recognition of the key role that innovation serves as a driver of economic growth and prosperity. It is also an acknowledgement of the need for a broad horizontal vision of innovation that is applicable to both developed and emerging economies, with the inclusion of indicators that go beyond the traditional measures of innovation (such as the level of research and development in a given country). The GII is a valuable benchmarking tool to facilitate public-private dialogue, whereby policymakers, business leaders and other stakeholders can evaluate progress on a continual basis.

The Global Innovation Index ranks countries on their innovation capabilities based on selected variables and discovers how nations have responded to the challenges of globalisation. In the 2007 edition 17 variables were used for the ranking and in the 2013 edition 60 variables were used.

 Fig 1 - Table showing Number of Variables used from 2007 to 2011  (CLICK ON IMAGE TO ENLARGE)

In all the appraisals, eight (8) pillars underlay the Global Innovation Index. Five (5) INPUT pillars represent aspects that enhance the capacity of a nation to generate ideas and leverage them for innovative products and services. These include i) Institutions and policies, ii) Human capacity, iii) Infrastructure, iv) Technological sophistication, and v) Business markets and capital. The three (3) OUTPUT pillars define benefits of successful innovation to the citizens and organisations of the country. These include i) Knowledge, ii) Competitiveness, and iii) Wealth.

In the 2013 edition, INSEAD-WIPO-Cornell University ranked 142 countries on their innovation capabilities. Sixth annual index reshuffles the top ten and shows gap widening between rich and poor countries.

Fig 2 - Framework for Global Innovation Index in 2013  (CLICK ON IMAGE TO ENLARGE)

The GII 2013 sheds light on the factors leading to the excellence of innovation hubs, such as the role of local ‘champions’ (large corporations), the availability of funding for the development of start-ups, and the importance of path dependency. Linkages among stakeholders (governments, firms, academia, and society) in the development of innovation capabilities—such as the existence of incubators and technology transfer programmes and the interaction of innovation clusters with local, inter-regional, and global networks and value chains—are included in the analyses.

The top 25 countries may be the same—albeit in a different order from past years—but this year’s Global Innovation Index, produced by INSEAD, WIPO and Cornell University shows there is no short-cut to successful innovation: it takes continued development of talent, sustained investment, institutional support... and the right mindset.

Some of the key findings of 2013 GII report are summarized below.

Innovation is a global game: The top-ranked countries in the GII come from different parts of the globe, confirming the global dispersion of innovation. The top 10 this year are ranked as follows:

1. Switzerland (1st in 2012)
2. Sweden (2nd)
3. United Kingdom (5th)
4. Netherlands (6th)
5. United States of America (10th)
6. Finland (4th)
7. Hong Kong (China) (8th)
8. Singapore (3rd)
9. Denmark (7th), and
10. Ireland (9th)

The USA rejoined the five most innovative nations and the UK moved up to the 3rd spot, while Switzerland and Sweden retained the first two places in the rankings this year. The top 25 ranked countries in the GII represent a mixture of nations from across the world: they are from North America, Europe, Asia, Oceania, and the Middle East.

An innovation divide persists: The GII 2013 results show a striking pattern of stability among the most innovative nations, which demonstrates both a persistent innovation divide across time and the spiky dispersion of innovation. Whether we look at the top 10 or top 25 innovators in the world, the GII rankings show that that, although individual countries swap their respective rankings within these groups, not a single country moved in or out of these groups this year. Even as innovators are thriving in local and regional hubs around the world, rankings remain strongly correlated with income levels: on average, high-income countries outpace developing countries by a wide margin across the board in terms of scores; other high- and middle-income countries are not yet breaking into the highest ranks of the GII 2013. Innovation divides also appear within regions. Last year, the GII 2012 identified the presence of a multi-speed Europe, with innovation leaders in northern Europe and countries performing less well in southern and eastern Europe, a trend confirmed this year.16 This year a box comparing performances of best-ranked countries in Sub-Saharan Africa is included.

Some nations are learning and rapidly improving their innovation capabilities: The GII results this year confirm the trend observed last year that a select group of emerging and middle-income countries are faring very well in innovation and moving up in the GII rankings. Eighteen emerging economies are outperforming others in their respective income groups: Armenia, China, Costa Rica, Georgia, Hungary, India, Jordan, Kenya, Latvia, Malaysia, Mali, the Republic of Moldova, Mongolia, Montenegro, Senegal, Tajikistan, Uganda, and Viet Nam. All of them demonstrate above-par levels of innovation compared with other countries with similar income levels. Their progress, even if not uniform, is mostly a result of a good policy mix on multiple fronts: institutions, skills, infrastructures, integration with global markets, and linkages to the business community.

Mixed performance in middle-income countries; BRICs falling behind in GII rankings: The GII 2012 posited that a holistic, knowledge- based growth strategy for innovation was desirable: a strategy in which innovation improvements resulted from continuous improvements across all of the multiple input and output dimensions of the GII and in which these improvements were integrated across large segments of society and the economy.

Achieving these broad-based and continuous improvements seems to be a challenge for many middle-income economies, as evidenced by their overall GII ranks (none have yet been able to break into the top 25).17 The BRICs (Brazil, Russia, India, China, and South Africa) have experienced a relative stagnation or mostly a drop in innovation ranks in 2013 as compared to 2012, repeating the experience of last year (2011 to 2012): China (35th; a decrease of one spot from 2012 and six from 2011), the Russian Federation (62nd; a decrease of 11 positions from 2012 and six from 2011), Brazil (64th; a decrease of six spots from 2012 and 17 from 2011), and India (66th; a decrease of two positions from 2012 and four from 2011). In this context, other emerging middle-income nations are increasing their innovation ranks rapidly: Mexico (63rd; an increase of 16 positions from 2012 and 18 from 2011), Indonesia (85th; an increase of 15 from 2012 and 14 from 2011), and others (the Plurinational State of Bolivia, Cambodia, Costa Rica, Ecuador, Uganda, and Uruguay) all increased their rankings by more than 15 positions this year. That said, BRICs and other middle-income countries perform particularly well in three indicators, aimed at capturing the quality of innovations, introduced this year.

THE COUNTRY OF INTEREST TO THIS BLOG IS NIGERIA – IN 2007, NIGERIA RANKED 72ND OUT OF 102 COUNTRIES AND IN 2013 NIGERIA RANKED 120 OUT OF 142 COUNTRIES.

WHY?

You are welcome to participate in figuring out what the problem is in the next series of posts as we digest the ramifications of the GII 2013 report.

 

To download GII 2013 full report: The Global Innovation Index 2013 - WIPO

Notes:

INSEAD is a global graduate business school with campuses in Europe (Fontainebleau, France), Asia (Singapore) and the Middle East (Abu Dhabi). INSEAD, widely considered to be one of the world's best business schools, offers various academic programmes including a full-time Master of Business Administration (MBA) programme, a Master of Finance programme, a PhD in management programme, and several executive education programmes (including an executive MBA). INSEAD was founded in 1957 by Harvard professor Georges Doriot along with a group of his former MBA students three months after the signing of the Treaty of Rome. The name INSEAD was originally an acronym for the French "Institut Européen d'Administration des Affaires" or European Institute of Business Administration.

Georges Frederic Doriot (September 1899 – June 1987) was one of the first American venture capitalists. An émigré from France, Doriot became director of the U.S. Army's Military Planning Division, Quartermaster General, during World War II, eventually being promoted to brigadier general. In 1946, he founded American Research and Development Corporation, the world's first publicly owned venture capital firm, earning him the sobriquet "father of venture capitalism". In 1957, he founded INSEAD with some Harvard MBA graduates.