Living in a globally connected world of Innovation

Innovation is a globally connected worldAs we think through innovation, do we every consider the broader global effects and what is helping us to accelerate or seemingly holding us back in our innovating impact?

For policy makers around the global all working to design the most optimum innovation conditions, they might not be considering enough about the true effects their individual policy-decisions mean, they might actually be undermining the very thing they are attempting to achieve for themselves

One report I have attempted to absorb is the one released in January 2016 by the Information Technology & Innovation Foundation (ITIF).  “Contributors and Detractors: Ranking Countries’ Impact on Global Innovation”.

This report offers a number of alternatives to give fresh perspective, a new slant to thinking through innovation and sometimes the “knock-on effect” of isolated thinking can have about innovation in a globally connected world. The search for an “altruistic effect” in our global world offers some interesting fresh perspective for appreciating innovation policy design.

This report assesses 56 countries on how their economic and trade policies contribute to and detract from innovation globally. It can alter thinking in my opinion in a globally connected world where innovation can have such impact if coordinated well.

The report is found here:

https://itif.org/publications/2016/01/20/contributors-and-detractors-ranking-countries%E2%80%99-impact-global-innovation

What is new here is how the report is attempting to quantify what does build a global robust innovation framework and what can hold it back or detract or even harm innovation.   The ITIF quite rightly states “Robust innovation is essential for economic growth and social progress around the world”.

ITIF states “Until now, most studies of innovation policy looked at how nations’ policies affect innovation in their own country. This report assesses 56 countries—which comprise almost 90 percent of the global economy—on 27 factors reflecting the extent to which their economic and trade policies contribute to and detract from innovation globally”.

So they are classifying “positive-sum” and “negative-sum” policies that might be pushing different nations to mercantilism in policies, trying to benefit themselves at the expense of others or the global innovation system. The ITIF has been consistently publishing on mercantilist issues for some time.

In the 27 indicators they examined the contributors to global innovation were grouped into three categories of taxes, human capital, and R&D and technology.  The detractors were grouped into balkanized production markets, IP protection and balkanized consumer markets.

There are (logically) four distinct qualitative perspectives, in ways that either: 1) benefit the country and the world simultaneously (“good”), 2) benefit the country at the expense of other nations (“ugly”), 3) fail to benefit either the country or the world (“bad”), or 4) actually fail to benefit the country but benefit the rest of the world (“self-destructive”).

The report finds that on a per-capita basis, the top nations doing the most for global innovation (a combination of more effort on policies that support innovation and less on policies that harm it) are Finland, Sweden, the United Kingdom, Singapore and the Netherlands. In contrast, the least constructive impact by putting in place policies that do the most to harm global innovation are Argentine, Indonesia, India, Thailand, Ukraine, Kenya and Mexico- some here rather surprised me. The US sits at 10th position and China at 44th.India,

The United States with its ranking of 10th overall, seems to have policies that do little to detract from global innovation yet fall short of those of other nations when it comes to contributing to global innovation. China ranks 44th overall, principally because it fields so many policies that actively detract from the global innovation system. The report also finds a strong correlation between countries’ contributions to global innovation and their levels of innovation success, meaning that doing well domestically on innovation policy can also mean doing well for the world.

Conclusions

The report concludes that for the world to maximize global innovation capacity, it will need to develop stronger mechanisms to urge nations to do more contributing and less detracting.

The report has some valuable messages to consider in any ‘reflective processes being undertaken within the EU and innovation.

The impact globally from policy decisions does have a significant “spill-over” effect. Innovation has been argued as the “last great frontier”, even if we buy into this or not what happens is the vying for leadership in innovation can be very nationalist and actually hurts the longer-term prospects, also certain innovation policies seem to generate this positive spillover that contributes into the entire global innovation system

Policies can be global contributors (as well as national accelerators) but can also detract or balkanize. The ITIF has attempted to examine 27 indicators that can give global innovation impact.

Worth not just a considered read but the report warrants some inclusion in any future thinking that the EU, the US or any nation undertaking a review of their Innovation policies – Australia and Canada come to mind here, due to change in Governments who are both undertaking reviews of their innovation activities that have seemed in recent years to lag behind and become less attractive to stimulating innovation.

Knowing policies that have potentially a very disappointing “impact” from the investments being made, even though they seem to be initially in that individual countries interest has huge value.

Also knowing the risk and possible effects of their individual policies might actually be stopping the global innovation flows entering or leaving. Policies that might be denying the potential for greater collaborations by cutting across national borders that is specifically be sought out by global corporations to capitalize on global opportunities might alter some narrow thinking that currently occurs in and around innovation policy.

 

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