Innovation driven economy
Nowadays, is not a secret that innovation has become a key drive for economy development. Governments and citizens of a growing amount of Countries, are raising the value of innovation in several ways. The Organisation for Economic Co-operation and Development (OECD) states that innovation goes far beyond the confines of research labs, it involves users, suppliers and consumers everywhere; in government, business and non-profit organizations, across borders, across sectors, and across institutions.
How to know the way that Global economy is doing?
There are different rankings, index and other indicators, available to let us create the big picture of the situation at glance.
According to the Global Innovation Index (GII), co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO, a specialized agency of the United Nations), the world’s five most innovative nations are:
- United Kingdom
- United States of America
This ranking highlights the fact that high income economies invest on innovation, but more than that, it looks at “Effective Innovation Policies for Development”, taking in account that each nation must find their own combination of policies to engage their innovative and creative potential. The GII 2015 is calculated as the average of two sub-indices. The Innovation Input Sub-Index of the national economy which embody innovative activities grouped in five pillars: Institutions, Human capital and research, Infrastructure, Market sophistication and Business sophistication. The Innovation Output Sub-Index captures actual evidence of innovation results, divided in two pillars: Knowledge and technology outputs and Creative outputs.
On the other hand, there is the Global Competitiveness Index (GCI) developed by the World Economic Forum, whose results are slightly different, ranking the following most competitive Countries:
- United States of America
The GCI takes in account 12 pillars to be averaged: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
Switzerland, ranked 1st in the Report, has been scored first in the world for three categories: capacity for innovation, quality of scientific research institutions, and company spending on research and development. Leads the innovation pillar, thanks to its world-class research institutions, high spending on research and development by companies, and strong cooperation between the academic world and the private. Besides that, other factors contribute to Switzerland’s innovation ecosystem, including the level of business sophistication and the Country’s capacity to engage talent.
So, why is so difficult to become an innovation driven economy?
Innovation is not just about investment, creating an ecosystem for innovation and to manage it properly plays an important role. China, for example, second place on the World GDP Ranking 2015, between 2003 and 2013 raised up its R&D investments at an average of 19.5 percent annually, greatly exceeding the U.S pace of investment; however, is struggling to trespass political and public administration obstacles to truly have a driven innovation economy.
In the opposite situation we can find Israel, another outstanding example for high investments in R&D, but, in this case, with excellent results. Tel Aviv has become the best ecosystem for entrepreneurs in the world after Silicon Valley, leaving behind cities such as New York, London and Paris. Israel’s key success factors are: a highly developed financial ecosystem, a strong entrepreneurship culture, the talent appreciation and a series of support tools. Overall, Israel ranked as the 27th most competitive nation in the world (GCI), with its approach of innovation leading the path.
Being updated in terms of technology is not a plus, is a must to consolidate economies. According to the AAAS (American Association for the Advancement of Science), more than 50% of economy growth of the United States of America in the last decades before the crisis, was due to the implementation of new technologies. In the same way, some members of the European Union increased about 25% their GDP between 1995 and before the crisis, thanks to the adoption of several technologies in many of their industries.
Furthermore, the concept of technology in our economies should be mixed up with sustainability, to work on what the OECD calls Eco-innovation. A combination of technological and non-technological changes that can produce evident environmental improvements. The current economic crisis and climate change negotiations should be taken as a great opportunity to move towards a green economy by accelerating eco-innovation.
Innovation and creativity must become part of everyone’s job. No matter the industry or activity, who better than company’s employees and common citizens can recognize the problems and propose solutions. Unfortunately, many managers discourage their work teams from inventing new ways of doing things, pushing them instead to follow procedures and stay within established guidelines. But do not give up, is just about transforming the creative and innovative thinking into a regular practice. Once the team has confidence that it can innovate incrementally, work together to create an atmosphere that encourages everyone to develop and experiment with new ideas.
The labor is already started, we must just keep on rethinking work, production and consumption.