Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

GLOBAL INNOVATION INDEX

Posted on | March 8, 2018 | No Comments

The Global Innovation Index (GII) signifies the key role of innovation in economic growth, competitiveness, and sustainability.

Co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO), the GII attempts to identify and measure key innovation drivers that assist countries in developing policies to increase employment, improve productivity, and support long-term output growth.

The index is based on data from several sources, including the International Telecommunication Union (ITU), the World Bank and the World Economic Forum. It provides key insights on a wide range of national metrics that help policy-makers develop legislation and regulations that can facilitate economic activity. It currently assesses data in 127 national economies covering over 92% of the world’s population and 98% of global GDP.

The GII Report ranks world economies in terms of their innovation capabilities and results, recognizing the need for indicators that go beyond traditional measures of innovation such as research and development (R&D).

The GII publishes its data in seven major categories called “pillars.” Five input pillars comprise the Innovation Input Index
and capture elements of the national economy that enable or enhance innovative activities: Institutions, Human Capital and Research, Infrastructure, Market Sophistication, and Business Sophistication. Two pillars called the Innovation Output Index capture actual evidence of successful innovation outputs: Knowledge and Technology Outputs, and Creative Outputs.

INSTITUTIONS

The Institutions pillar captures the political economy framework of a country. These include political environment, political stability and absence of violence/terrorism, government effectiveness, and the regulatory environment. Business confidence and flexibility is important too and includes regulatory quality, rule of law, cost of redundancy dismissal, business environment, ease of starting a business, ease of resolving insolvency, ease of paying taxes.

HUMAN CAPITAL AND RESEARCH

This pillar gauges the human capital of countries and includes education levels and expenditures on education. This includes assessment in reading, mathematics, and science as well as pupil-teacher ratios in secondary and tertiary education and rankings of universities. Also considered are graduates in science and engineering, gross expenditure on R&D, and global R&D companies.

INFRASTRUCTURE

The third pillar measures information and communication technologies (ICTs), general infrastructure, and ecological sustainability. ICT includes ICT access, ICT use, government’s online services, and online e-participation. General infrastructure includes electricity output, logistics performance, and gross capital formation. Ecological sustainability measures GDP per unit of energy use, and environmental sustainability performance such as ISO 14001 environmental certificates.

MARKET SOPHISTICATION

The Market sophistication pillar has three sub-pillars structured around credit, investment and market conditions, trade, and competition. Areas include micro-finance, and venture capital as well as the total level of transactions.

BUSINESS SOPHISTICATION

The fifth enabler pillar tries to capture the level of business ability to assess how conducive firms are to innovation activity. These include number of knowledge workers: employment in knowledge-intensive services, firms offering formal training, and females employed with advanced degrees. Innovation linkages include university/industry, cluster development and research collaboration. Intellectual property and royalty payments have become prime indicators of innovation as are high tech imports, ICT services imports, and research talent in business enterprises.

KNOWLEDGE AND TECHNOLOGY OUTPUTS

This pillar covers all those variables that are traditionally thought to be the fruits of inventions and or innovations. These include knowledge creation, patent applications by origin, scientific and technical publications, and the rate of GDP per person engaged. Technology outputs include total computer software spending, high-tech and medium high-tech output, knowledge diffusion, intellectual property receipts, high-tech exports, and ICT services exports.

CREATIVE OUTPUTS

The last pillar on creative outputs measures the role of creativity for innovation. Areas include: intangible assets, trademark applications by origin, industrial designs by origin, ICTs and business model creation, ICTs and organizational model creation. Creative goods and services include cultural and creative services exports, national feature films produced, global entertainment and media market, printing and publishing output, and creative goods exports. Another area is online creativity such as generic top-level domains (gTLDs), Country-code top-level domains (ccTLDs), Wikipedia yearly edits, and Video uploads on YouTube.

These two indicators, the Innovation Input Index and the Innovation Output Index are averaged to compute the GII. The first combines five pillars while the second includes the last two and each score is calculated by a weighted average method. The overall GII score is the average of the Input and Output Sub-Indices. Below are scores tallied for the 2017 Report.

Global Innovation Index 2017 Rankings [Top 15]
Rank Country
1 Switzerland
2 Sweden
3 Netherlands
4 United States
5 United Kingdom
6 Denmark
7 Singapore
8 Finland
9 Germany
10 Ireland
11 South Korea
12 Luxembourg
13 Iceland
14 Japan
15 France

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

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    Professor and Associate Chair at State University of New York (SUNY) Korea. Recently taught at Hannam University in Daejeon, South Korea. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, media economics, and strategic communications.

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