The UAE and Qatar, two of the most competitive countries in the Gulf, have moved up in the global order through their high wealth creation and innovation capabilities.
So it comes as little surprise that with great support from well-assessed institutions and strong political leaderships, these two countries are placed high on Insead's 2008 Global Innovation Index.
Qatar leads the GCC at 24th place, followed closely by the UAE at 26th position. Five countries from the region have been ranked in the top 35 countries studied.
The US with a legacy of more than 100 years in innovation has been consistent in taking the leader's slot. Germany follows in second position, maintaining its slot from last year. Sweden rises to third rank this year from 12th in 2007. The United Kingdom falls from third to the fourth slot. Singapore rises to the fifth position this year from seventh the previous year. South Korea stands sixth, up from 19th position last year. Japan moves down to ninth position and France slips to the 19th position from fifth rank last year. The others in the top 10 rankings are Switzerland, Denmark and the Netherlands, which are ranked seventh, eighth, and 10th respectively.
Over the past few years, comparative levels of innovation have been based on specific metrics such as number of patents registered, number of articles published in journals and percentage of GDP spending on R&D.
While useful, these metrics are narrow in scope and do not reflect the fact that innovation has become horizontal today, says Insead. Instead, the business school focuses on factors such as leading-edge technologies, expanded human capacities, better organisational and operational capabilities and improved institutional performance.
Insead Professor Soumitra Dutta, the primary author of the study said: "Innovation today has become horizontal. We can no longer afford to look at it through such a narrow scope by examining vertical structures such as R&D laboratories and universities. In the Global Innovation Index, we take a much broader approach to looking at innovation worldwide by capturing both micro- and macroeconomic variables."
Using this framework, the world's best-and worst-performing economies are ranked on their innovation capabilities, which provide insights into the strengths and weaknesses of countries in innovation-related policies and practices.
Dutta said: "Our goal is to provide a benchmarking tool for business leaders and policymakers to identify obstacles to improved innovation and competitiveness and stimulate discussion on strategies to overcome them. In today's current global crisis, it will be critical for leaders to create an enabling environment to support the adoption of innovation and spread the benefits across all sectors of society."