Investment in innovation on a global scale has not yet recovered to levels seen before the Global Financial Crisis (GFC) of 2009. Despite this, the first middle-income country has joined the top 25 countries currently leading innovation.
âThe Global Innovation Index 2016' (GII), a collaborative project by INSEAD, Cornell University and the World Intellectual Property Organisation (WIPO), ranks economies on innovation capability along with openness of economies for global partnerships and investment in R&D, writes Mark Dorman of Yahoo!
The index ranks more than 100 countries by 82 innovation indicators and has identified China to be the leader in âinnovation quality' among middle-income countries, ranking 17th – a vast improvement from 29th in 2015, reports Reuters.
Other countries leading in innovation quality include Japan, the USA, the UK and Germany. This indicator evaluates university output including the number of scientific articles published and filings for patents, writes Dorman.
Other middle-income countries such as India and Brazil rank 25th and 27th respectively. Britain now ranks third, a fall from second in 2015, which has been secured by Sweden. Switzerland remains the frontrunner in innovation for the second year.
The report states that "despite China's rise, an âinnovation divide' persists between developed and developing countries amid increasing awareness among policymakers that fostering innovation is crucial to a vibrant, competitive economy."
According to the report's co-editor Soumitra Dutta, Dean at the Cornell College of Business, closing the âinnovation divide' is achievable through adequate investment in innovation. "While institutions create an essential supportive framework for doing so, economies need to focus on reforming education and growing their research capabilities to compete successfully in a rapidly changing globalized world," she said.
Of significance to China's leap in rating is the countries focus on investment in intangible goods including research, education and development, which has resulted in the creation of new patents and licenses and an emphasis on creating, rather than making, goods in China, reports Reuters.
Many countries are still being impacted by the long-term effects of the GFC and have consequently adjusted R&D budgets accordingly. The report notes that between 2009 and 2014, investment in R&D fell by 3%, precash. "Investing in innovation is critical to raising long-term economic growth," said Francis Gurry, director general of WIPO.
The GII theme this year is âWinning with Global Innovation' and focuses on exploring the impact of global information sharing and talents on innovation. The press release emphasises that cooperation of R&D in the public and corporate sector has the ability to promote global economic growth in the future.
INSEAD's Executive Director for Global Indices and co-editor of the Global Innovation Index report, Bruno Lavin says that sustained investment is critical for innovation. Lavin also states that funding for innovation that is pared back during times of low economic growth can hinder and even erase any progress in the industry that has been made.
The focus of policy makers now should be on sparking student interest in science, risk taking and other areas in education that will generate an innovative and global mindset, Lavin says.