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Global Innovation Marathon: Leaders and Outsiders
What is it like to live in an innovative country, where creativity and unconventional thinking are one of the paths to your own well-being? Ask Switzerland, the USA, Sweden, China, and Singapore.
6 November, 2024
World Indexes & Rankings
Industry
Competitiveness
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Let us try to look into the secrets of innovative success in these countries. Who are they, the innovation leaders? What prevents other countries from achieving such results? Where is Ukraine in this system of coordinates?
For the 14th year in a row, according to the recently presented Global Innovation Index 2024, Switzerland has been the most innovative country in the world. In terms of innovation outputs, application of knowledge, technology and creativity, it is the world leader, the lowest, seventh place, the country ranks only in infrastructure.
For the second year in a row, Sweden and the USA hold second and third place, respectively.
- Sweden has the best infrastructure in the world, in addition to this, it is the world leader in business sophistication and in third place in the factor "human capital and research". Swedes are first in the world in indicators such as "researchers", payments for "intellectual property"; third in "employment in knowledge-intensive sectors" and the value of brands in the world.
- The United States is the world leader in nine out of 78 indicators of the Global Innovation Index 2024.
- Singapore has ranked fourth in the world, becoming the world leader in the number of first places in 78 indicators. This country is ahead of others in 14 parameters, leaving behind the UK, South Korea and Germany. It is the best in the quality of regulatory policy, the stability of the implemented economic policy towards business, access to services (ICT), logistics, venture capital and high-tech manufacturing.
- China is the best in the world in eight indicators, including utility models, trademarks and industrial designs. It should be noted that China (11th place) is ahead of Japan (13th place), which would have been difficult to imagine at the beginning of the 21st century. After all, in a similar ranking in 2007, Japan was in 4th place, and China was in 29th place.
- Hong Kong, Japan, Israel and Luxembourg are the best in the world in six indicators.
In the Top 30 most innovative countries in the world, 16 positions are occupied by the member states of the European Union.
The latest Global Innovation Index from the World Intellectual Property Organization (WIPO) takes into consideration statistical data, survey results, and expert assessments of 133 countries in the world. This is a source of information for both investors and scientists, researchers and all those who truly seek to understand and implement mechanisms for economic modernization.
Source: Global Innovation Index 2024. Unlocking the Promise of Social Entrepreneurship. WIPO. September 2024
The infographic shows that Morocco has made the biggest breakthrough: +28 positions, a world record, because back in 2013 the country was in 92nd place. India (+23 positions since 2011), Indonesia (+45 positions since 2011), Turkey (+28 positions) has shown bright successes over the same period. Vietnam (+17) and Thailand have approached the Top 40, too.
It is worth noting Ireland’s return to the Top 20, in 19th place, although this country also remembers better times. For example, in 2011, Ireland was in 13th place.
Despite the relatively high positions of European countries in the Global Innovation Index, Mario Draghi and the European Commission has noted the European Union's loss in interregional competition.
Taxpayers' money helps EU countries to hold high positions according to many indicators of the Global Innovation Index, but it is not just about being at the top of the Index, but about making innovation a driver of labor productivity growth and competitiveness, and for this, real freedom of private entrepreneurship is necessary. Nationalization of scientific research and development work, innovation activity is a loss in global competition, as was confirmed by the conclusions of the European Commission and the report of Mario Draghi.
The authors of the report, WIPO experts, conducted a survey among the countries participating in the GII-2024 Index in 2024. Here is what has been found: 77% of the countries participating in the World Intellectual Property Organization use the conclusions and recommendations of the Index to improve their innovation ecosystems. That is, the Index is a guide for assessing national innovation policy and economic strategy, a subject for a dialogue between various stakeholders of economic policy.
WIPO experts, in the style typical of international bureaucracy, formulate their proposals for increasing innovation as follows:
- recognize innovation as a key priority in the country's development and progress strategy, formulate the parameters of innovation policy;
- create an inter-agency working group to address innovation policy issues based on a whole-of-government approach. Ideally, it should be accountable to a higher level of the government (e.g., the Prime Minister’s Office);
- ensure innovation policy consultations of target groups and innovation actors from both the private and public sectors, including start-ups, research universities and innovation clusters;
- ensure that intellectual property policy is aligned with the innovation strategy;
- ensure that innovation policy objectives are clear, measurable and can be assessed;
- do not appoint one ministry/agency responsible for innovation policy and monitoring of the implementation of the Index indicators;
- do not set overly ambitious, unrealistic goals for moving up in the Index. Moving up is difficult to achieve, especially to the Top 50. Remember that there is a lag between the adoption of a certain change in legislation and a change in the Index position;
- do not treat the Index as a mathematical tool. After all, the goal is not to raise the country's ranking, but to actually ensure innovative development and progress.
There is probably no government in the world that could not formally implement these recommendations, especially if the VIP– disposers of taxpayers' money are focused on show. However, not everyone can and wishes to provide a real support to innovative entrepreneurship and not create additional bureaucratic barriers.
Unfortunately, WIPO experts use their index to show statistics, not dynamics. They do not delve into the specifics of the motivation of a private entrepreneur, an owner of a resource/asset, and disposers of other people’s property, i.e. politicians, officials, and heads of state-owned enterprises. They take the state of the public administration system at face value and do not consider it necessary to emphasize the size, powers, and functionality of the State. This is where problems arise, which, like the road to hell, are often paved with good intentions.
As a result, international experts give their recommendations on innovative development, and VIP- disposers of a foreign national level pick them up and chant new slogans - "growth points", "support for strategically important sectors", create various technoparks, free economic zones and other administrative and legal regimes that enjoy a whole set of privileges. These same privileges, preferences, special regimes are a complete discretion of VIP - disposers of taxpayers' money. As a result, the country receives not innovative development, but only its imitation.
The State's displacement of private investment and the replacement of natural private entrepreneurship with state commercial activity slows down the process of creative destruction and modernization, and allows old, dogmatic, and discriminatory commercial structures and systems to be entrenched in the market. As a result, countries experience stagnation, recession, bureaucratization, and capital flight.
Innovation in Ukraine thanks to or despite the state machine?
In the 2024 Index, Ukraine has ranked 60th, down 15 places from its record-high 45th place in 2020 in the 2024 Index. Why?
Source: Global Innovation Index 2024. Unlocking the Promise of Social Entrepreneurship. WIPO. September 2024
It can be assumed that small fluctuations in one direction or another are not the result of any targeted government policy, but the inertia of old trends, a manifestation of chaotic, random results of some actions. In other words, we are going with the flow, using old resources, on the old vessel of those investments that were attracted and the institutions that were formed decades ago.
The Ukrainian authorities have implemented almost all the recommendations of WIPO experts, but the economy remains hostage to the old capital structure. It is burdened by toxic regulation, and operates in a mode of investment drought, high monetary and fiscal policy costs.
The relatively high 60th place is the result of the inertia of the old education system with the elements of entrepreneurial creativity, not thanks to, but despite the Government's policy. An example is the production of drones, where the technologies and inventions of Ukrainians, in the vast majority of private companies, are approved by all military analysts, and the country is predicted to have a great success in military exports.
The state is the main obstacle to the innovative development of Ukraine, an opponent of its true modernization and the development of people's creative potential.Share
Its functionality must be severely limited, it must be put under a straitjacket in the form of quantitative indicators (government spending to GDP, inflation, budget deficit, public debt, etc.), and a large-scale privatization and liberalization of all commercial activity must be carried out.
In the conditions of intensified competition for human capital and for a creative entrepreneurial class in the world, Ukraine cannot afford such a Government and such a system of public administration. Every year the government reduces the country's chances of success. Every year Ukraine loses not only its heroes on the front, but also those on the economic front who, with their ideas, hands and actions, are able to create a powerful and competitive country.
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Topics
World Indexes & Rankings
Industry
Competitiveness
Yaroslav Romanchuk
A well-known Ukrainian and Belarusian economist, popularizer of the Austrian economic school in the post-Soviet space. He specializes in reforms in transitional economies in the post-socialist space.
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