p3~ CHAPTER 1
p27-28 The top 10 in the Innovation Input Sub-Index
…considers the elements of an economy that enable innovative activity through five pillars. …
The top 10 in the Innovation Output Sub-Index
…variables provide information on elements that are the result of innovation within an economy. Although scores on the Input and Output Sub-Indices might differ substantially, leading to important shifts in rankings from one sub-index to the other for particular countries, the data confirm that efforts made to improve enabling environments are rewarded with better innovation outputs. …
p36 Box 5: Northern America: The USA and Canada on different innovation pathways?
…the USA… has prominent positions among the top 25 countries in all GII pillars and 17 of the 21 sub-pillars. It comes in 1st on the Credit, Investment, and Trade, competition, and market scale sub-pillars and scores among the top 10 on six of the other sub-pillars. The USA also continues to be the highest performer of R&D worldwide, accounting for close to 27% of the world total in 2014 according to our estimates. US total R&D spending is projected to increase by 4.2 percent in 2017. Although US businesses are responsible for 70% of R&D spending, its government continues to play a substantial role in performing and financing R&D, driving one of the highest levels of basic R&D globally. The quality of its innovation system is frequently demonstrated by its top scores in the quality of its universities and the quality of its scientific publications (see Box 4). It also boasts a high degree of market sophistication and its innovation clusters, in particular those on the East and West Coasts of the country, continue to be a magnet for top talent and a critical source of technological and non-technological innovation.
…the USA also exhibits some structural weaknesses; education (it ranks 39th…) and tertiary education (ranks 50th) continue to be relatively weaker spots. On tertiary education, the number of graduates in science and engineering, (ranked 85th) is low; this has been a source of concern for some time. The USA’s performance on the PISA assessment (ranked 25th) is less alarming but also lower than the average of top 10 innovating economies (see Figure 5.1). More broadly, the USA faces a productivity and investment weakness, reflected in its low score in gross fixed capital formation and labor productivity (see Figure 5.1).
Canada also continues to be among the top 25 innovation leaders. Now standing at rank 15 with top 25 scores in all leading pillars and 13 of the 21 sub-pillars, it has a clear lead in having one of the most conducive business and investment climates worldwide and ranks in the top 10 in seven sub-pillars. It ranks favourably in terms of innovation quality, boasting a world-class university network and top-quality scientific publications.
…Canada…also shows weaknesses in its education indicators. Looking at human capital and research, Canadian R&D expenditures have been on a different trajectory than those of the USA. Specifically, the growth of its R&D expenditures has been on a downward trend since 2001. Where business R&D in the USA is increasing at a much faster pace than government R&D, dynamics in Canada are the reverse (see Figure 5.2). So far, earlier government attempts to revive R&D by providing tax support have not translated into more business R&D. In terms of the government’s education expenditure per pupil, Canada ranks 64th; the average rank of top 10 innovating economies (excluding the USA) is 33 in this indicator. Other weaknesses include new businesses creation, ICT services imports, and gross capital formation.
Figure 5.1 compares the 2016 GII scores of the USA, Canada, and the average scores of top 10 GII innovating economies (without the USA) on key innovation input and output indicators. Although the USA and Canada each lead in some areas, in several variables they perform worse than the top 10 average. Some of these variables are government expenditure/pupil, secondary; knowledge-intensive employment; and high-tech and medium-high tech output.
For both the USA and Canada to grow as innovation leaders they need not only to overcome their weaknesses but also to reinforce their education and research base. Canada, for instance, plans to counteract its relative decline and increase its investments in infrastructure, extend its research capacity, provide a stimulating environment for creative and entrepreneurial firms, and invest in its universities and research hospitals. …
p51-56 The Innovation Input Sub-Index
Pillar 1: Institutions
…captures the institutional framework of a country… The Political environment sub-pillar includes two indices: one that reflects perceptions of the likelihood that a government might be destabilized; and one that reflects the quality of public and civil services, policy formulation, and implementation.
The Regulatory environment sub-pillar draws on two indices aimed at capturing perceptions on the ability of the government to formulate and implement cohesive policies that promote the development of the private sector and at evaluating the extent to which the rule of law prevails (in aspects such as contract enforcement, property rights, the police, and the courts). The third indicator evaluates the cost of redundancy dismissal as the sum, in salary weeks, of the cost of advance notice requirements added to severance payments due when terminating a redundant worker.
The Business environment sub-pillar expands on three aspects that directly affect private entrepreneurial endeavours… on the ease of starting a business; the ease of resolving insolvency…; and the ease of paying taxes.
Pillar 2: Human capital and research
The level and standard of education and research activity in a country are prime determinants of the innovation capacity of a nation. This pillar tries to gauge the human capital of countries…
The first sub-pillar includes a mix of indicators aimed at capturing achievements at the elementary and secondary education levels. Education expenditure and school life expectancy are good proxies for coverage. Government expenditure per pupil, secondary gives a sense of the level of priority given to secondary education by the state. The quality of education is measured through the results to the OECD Programme for International Student Assessment (PISA), which examines 15-year-old students’ performances in reading, mathematics, and science, as well as the pupil-teacher ratio.
… The sub-pillar on tertiary education aims at capturing coverage (tertiary enrolment); priority is given to the sectors traditionally associated with innovation (with a series on the percentage of tertiary graduates in science and engineering, manufacturing, and construction); and the inbound and mobility of tertiary students…
The last sub-pillar, on R&D, measures the level and quality of R&D activities, with indicators on researchers (full-time equivalence), gross expenditure, the R&D expenditures of top global R&D spenders, and the quality of scientific and research institutions as measured by the average score of the top three universities in the QS World University Ranking of 2015. …
Pillar 3: Infrastructure
The third pillar includes three sub-pillars: Information and communication technologies (ICTs), General infrastructure, and Ecological sustainability…
Good and ecologically friendly communication, transport, and energy infrastructures facilitate the production and exchange of ideas, services, and goods and feed into the innovation system through increased productivity and efficiency, lower transaction costs, better access to markets, and sustainable growth.
The ICTs sub-pillar includes four indices developed by international organizations on ICT access, ICT use, online service by governments, and online participation of citizens.
The sub-pillar on general infrastructure includes the average of electricity output in kWh per capita; …land improvements (fences, ditches, drains); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings.
The sub-pillar on ecological sustainability includes three indicators: GDP per unit of energy use (a measure of efficiency in the use of energy), the Environmental Performance Index of Yale and Columbia Universities, and the number of certificates of conformity with standard ISO 14001 on environmental management systems issued.
Pillar 4: Market sophistication
The availability of credit and an environment that supports investment, access to the international market, competition, and market scale are all critical for businesses to prosper and for innovation to occur. The Market sophistication pillar has three sub-pillars…
The Credit sub-pillar includes a measure on the ease of getting credit aimed at measuring the degree to which collateral and bankruptcy laws facilitate lending by protecting the rights of borrowers and lenders, as well as the rules and practices affecting the coverage, scope, and accessibility of credit information. …
The Investment sub-pillar includes the ease of protecting minority investors index as well as three indicators on the level of transactions. …
The last sub-pillar tackles trade, competition, and market scale. …
Pillar 5: Business sophistication
…how conducive firms are to innovation activity…
The first sub-pillar includes four quantitative indicators on knowledge workers: employment in knowledge-intensive services; the availability of formal training at the firm level; R&D performed by business enterprise (GERD) as a percentage of GDP (i.e., GERD over GDP); and the percentage of total gross expenditure of R&D that is financed by business enterprise. …the percentage of females employed with advanced degrees. …
The Innovation Output Sub-Index
…the results of innovative activities within the economy. Although the Output Sub-Index includes only two pillars, it has the same weight in calculating the overall GII scores as the Input Sub-Index. …
Pillar 6: Knowledge and technology outputs
… The first sub-pillar refers to the creation of knowledge. It includes five indicators that are the result of inventive and innovative activities: patent applications filed by residents both at the national patent office and at the international level through the PCT; utility model applications filed by residents at the national office; scientific and technical published articles in peer-reviewed journals; and an economy’s number of articles (H) that have received at least H citations.
The second sub-pillar, on knowledge impact, includes statistics representing the impact of innovation activities at the micro- and macro-economic level or related proxies: increases in labour productivity, the entry density of new firms, spending on computer software, the number of certificates of conformity with standard ISO 9001 on quality management systems issued, and the measure of high- and medium-high-tech industrial output over total manufactures output.
The third sub-pillar, on knowledge diffusion, is the mirror image of the knowledge absorption sub-pillar of pillar 5, with the exception of indicator 5.3.5. …royalty and license fees receipts as a percentage of total trade; high-tech exports (net of re-exports) as a percentage of total exports (net of re-exports); exports of ICT services as a percentage of total trade; and net outflows of FDI as a percentage of GDP.
Pillar 7: Creative outputs
The role of creativity for innovation is still largely underappreciated in innovation measurement and policy debates. …
The first sub-pillar on intangible assets includes statistics on trademark applications by residents at the national office; industrial designs included in applications at a regional or national office, and two survey questions regarding the use of ICTs in business and organizational models, new areas that are increasingly linked to process innovations in the literature.
The second sub-pillar on creative goods and services includes proxies to get at creativity and the creative outputs of an economy. …expanded to include information services, advertising, market research and public opinion polling, and other personal, cultural, and recreational services… These two indicators complement the remainder of the sub-pillar, which measures national feature films produced in a given country…; printing and publishing output…; and creative goods exports…
The third sub-pillar on online creativity includes four indicators, all scaled by population aged 15 through 69 years old: generic (biz, info, org, net, and com) and country-code top level domains, average monthly edits to Wikipedia; and video uploads on YouTube. …
p75~ CHAPTER 2
p81~ CHAPTER 3
p91~ CHAPTER 4
p97~ CHAPTER 5
p103~ CHAPTER 6
p111~ CHAPTER 7 Radical Innovation Is Collaborative, Disruptive, and Sustainable Garry Lyons, MasterCard, Ireland
p117~ CHAPTER 8 The Management of Global Innovation: Business Expectations for 2020
p125~ CHAPTER 9
p133~ CHAPTER 10
p141~ CHAPTER 11 National Innovation Systems Contributing to Global Innovation: The Case of Australia
p149~ CHAPTER 12
p159~ CHAPTER 13
p307,308 Index of Data Tables
p3~ CHAPTER 1