The GII report and ‘Index’ reports in general
Let me start by saying that one should be very careful when dealing with broad inter-country indicators and not just because they could (they will) contain mistakes (some have had very juicy scandals that involve cooking data and massaging numbers).. I think that many of these ‘reduce-everything-into-a-number’ measures, especially when they try to measure wide social processes carry inherent ‘conflation risks’ leading to waste of mass-scale resources.
Now that my disclaimer is out there, I think that the Global Innovation Index report (released by the World Intellectual Property Organization) actually is an interesting read because it provides a quick and easy (you see) model for thinking about innovation (if you’re really curious, busy, and interested in abstract art). The effort is helpful in suggesting a few dimensions of interest for gauging the innovation process.
First for the awards: countries are ranked according to their ‘innovation index rankings’, and ranked into groups, and I’m a bit skeptical of the value of this ranking exercise because of the complexity of the measure.
The (many) components of a composite index
The Innovation Tracker looks at three broad stages of the innovation journey:
- Science & Innovation Investments: includes scientific publications, R&D, international patent filings, and Venture Capital deals,
- Technological Progress: includes microchip transistor count, costs of renewable energy, and drug approvals,
- Socioeconomic Impact: includes labor productivity, life expectancy, and carbon dioxide emissions.
These three categories broadly track innovation inputs/effort , process/metrics, and outputs respectively.
The interesting part is the composite Index (Global Innovation Index – GII). It is measured by using an input sub-index and an output sub-index, which are further broken-down.
Input sub-index:
- Institutions (political environment, regulatory environment, business environment)
- Human capital and research (education, tertiary education, R&D)
- Infrastructure (ICT, General, Ecological)
- Market Sophistication (credit, investment, trade diversification and scale)
- Business sophistication (knowledge workers, innovation linkages, knowledge absorption)
Output sub-index:
- Knowledge and Technology outputs (knowledge creation, impact, and diffusion)
- Creative Outputs (intangible assets, creative goods and services, online creativity).
Remarks, Caveats, and Thoughts
Measurement is critical as a driver of future action. You work on what you measure, and the performance index usually drives your efforts. The above set of measures raises many questions to consider for policy makers and for the contributors to innovation, progress, and the knowledge economy.
Should we have a composite index with many variables, or keep them fewer? Which variables should be prioritized in which countries (for surely not all these variables are relevant to the different countries that are at different stages of development)?
Also, do we have an accurate grasp on the causal relationships? It doesn’t seem clear how natural resources are integrated into these frameworks, and how country-specific (specialized) innovation efforts might be accounted for.
Even if the utility of a ranking of complex socioeconomic process is problematic, what we can be certain of though, is that the model provided by WIPO should be used by different countries (and regions) as an input to the creation of their own strategies as they determine and build their own indices (time-bound). These indices will highlight national priorities because ‘Innovation’ is not a goal in itself, nor is it a clearly defined concept. The huge composite index confirms that.
In previous research, I’ve explored the idea of using cultural innovation sub-systems as integral part of a country’s National Innovation System (NIS), especially when discrete R&D investments (in the absence of the proper infrastructure and market sophistication) can’t drive the required outputs.
Natural resources, cultural potential, and the limiting/expansion of the index are simple examples of the many levels of customization that can be applied to innovation-measurement and innovation-support efforts.
You can download the full report HERE.
Expanding the discussion:
I’ve written a paper before on the ‘Cultural Innovation Sub-system’, arguing that the Cultural and Creative Industries, and Cultural Resources in general, can be utilized in building National Innovation Systems, particularly for developing nations. The post can be accessed here. https://ahijazi.website/2021/the-cultural-innovation-sub-system-creative-industries/