For the second year running, Qatar and the UAE lead the Middle East in overall innovation performance, according to the Global Innovation Index 2012 (GII) released by INSEAD, an international business school.
The list of overall GII top 10 performers has changed little from last year. Switzerland, Sweden, and Singapore are followed by Finland, the United Kingdom, the Netherlands, Denmark, Hong Kong (China), Ireland, and the US.
The Global Innovation Index ranks 141 countries/economies on the basis of their innovation capabilities and results. It is calculated as the average of two sub-indices. The Innovation Input Sub-Index gauges elements of the national economy which embodies innovative activities grouped in five pillars: (1) Institutions, (2) Human capital and research, (3) Infrastructure, (4) Market sophistication and (5) Business sophistication. The Innovation Output Sub-Index captures actual evidence of innovation results, divided in two pillars: (6) Knowledge and technology outputs and (7) Creative outputs.
The GII includes 15 economies from the Middle East and Northern Africa (Mena), of which two — Qatar (33rd) and the UAE (37th) —rank among the top 40 overall. Similarly, the UAE (28th) and Qatar (30th) rank highest among Mena countries in the input sub-index and rank in the top 20 on several pillars.
Where most Mena countries trail innovation leaders is in innovation outputs. Qatar, Jordan and the UAE lead the regional ranking, although they score below the top forty with Qatar at 41st place, Jordan at 46th and the UAE at 51st. Consequently, most Mena countries underperform on the Innovation Efficiency Index —a measure calculated as the ratio of the output sub-index over the input sub-index and that shows how innovation inputs are best translated into innovation outputs.
Jordan ranks highest in efficiency at position 21 followed by Kuwait in 54th place out of 141 countries. Such examples from Jordan and the GCC demonstrate rising levels of innovation achievements in Mena as a result of improvements in institutional frameworks, a skilled labour force (with an expanded tertiary education), and deeper integration with local and global investment and trade markets. These examples also point to the need for improvement in knowledge outputs such as scientific journals and patents that ultimately result in creative goods and services for both local and global consumption.
“The GII is a timely reminder that policies to promote innovation are critical to the debate on spurring sustainable economic growth,” WIPO Director General Francis Gurry said. “The downward pressure on investment in innovation exerted by the current crisis must be resisted. Otherwise we risk durable damage to countries’ productive capacities. This is the time for forward-looking policies to lay the foundations for future prosperity.”
At the pillar level, Qatar ranks 14th, 8th and 19th among 141 countries in Human capital and research, Business sophistication and Creative outputs respectively. Similarly, the UAE shines in Infrastructure, Business sophistication and Creative outputs where it ranks 17th, 16th and 20threspectively.
Other Mena countries managed to secure high rankings in several pillars. For example, Oman scored a high 33rdposition in Institutions, Saudi Arabia ranks 36th in market sophistication and first in Mena. Similarly, Bahrain’s human capital and research ranks 18th overall, second only to Qatar in the region. In Knowledge and technology outputs, Lebanon comes first in Mena at position 48 overall.
Soumitra Dutta, Roland Berger Professor of Business and Technology at INSEAD and the founder of the GII noted, “The GII seeks to update and improve the way innovation is measured. Today’s definitions must capture an environment which is context-driven, problem-focused and interdisciplinary. The 2012 variables were broadened in an effort to find the right mix which captures innovation as it happens today.”
The study shows that the dynamics of innovation continue to be affected by the emergence of new successful innovators, as seen by the range of countries across continents in the top twenty GII ranking, as well as the good performances of emerging countries such as Jordan (56th).
The Report also highlights those economies that are over-performing countries/economies with similar income levels (as measured by GDP per capita in PPP$). Jordan is placed among the innovation learners, Tunisia, Lebanon, Morocco, and Egypt achieve GII scores that correspond to their income levels, while the remaining countries in the region achieve positions below their potential.
“Innovation is becoming the spearhead of competition – at a regional level, on a national level, and for companies,” said Ben Verwaayen, CEO of Alcatel-Lucent. “How to deal with that challenge will determine the destiny of competiveness for all players.”