Which Countries Hinder Global Innovation?

The Information Technology and Innovation Foundation (ITIF) have released a fascinating report detailing the state of global innovation.

The report: “Contributors and Detractors: Ranking Countries’ Impact on Global Innovation” looks at 56 countries, considering 27 ways in which they contribute (or detract) from taking the world to the next level of innovation. 

The report’s contents make for fascinating reading. Rather than just say who the most innovative countries are (Finland, Sweden and the UK), it also considers which countries are putting policies in place, which actively hinder global innovation (India, China and Thailand). Innovation is something that is all too easy to stifle (we know this all too well from our workplaces), and sometimes simply removing these obstacles can create all sorts of opportunities for the rest of us. The United States comes in 10th place – doing little to detract from innovation, but also not contributing particularly much.

I am sure that Elon Musk would have a few words to say about this. 

The 14 “contributor” indicators revolved around the tax regimes, human capital and the research and technology situation in a country. The 13 “detractor” indicators were concerned with barriers to production, intellectual property support and barriers to consumption. Each of the 27 indicators was given a weighting and a total was calculated for each country. 

The report finds that in order for innovation to flourish on a global scale, there has to be a balance found for each individual country where there is a benefit both for the country and the world. This is not so hard to imagine, but when countries are pulling the blankets over themselves to keep themselves warm, there is not always enough blanket left over for everyone.

There are three key factors, which can get in the way of global innovation. Trade barriers can easily stifle innovation between countries – no one country has a monopoly on great minds, we need to work together to solve the world’s problems! The protection of intellectual property is crucial – if the rule of law is weak, why would a company risk their investment? There should be a level playing field for all participants, but local subsidies can increase (unworthy) competition and hamper the success of the worthiest ideas. The third aspect is when consumer markets are limited – global retailers have spent years attempting to enter the Indian market (for example).

Countries such as China and India are (unfortunately) dragging the world back with the protection and subsidization of industries such as steel, energy, glass and paper, creating global overcapacity and distorting entire markets. It is understandable, but it is about time that this parochial attitude softened a little.

You might call me naive, and it is indeed a little naive to suggest that countries should “think global” rather than “think local”, but with so many issues affecting us all on a global scale these days, it is about time that we realized that we are all in it together. This is a report compiled by a “western” organization, and it naturally comes to some “western” conclusions, but, to my mind, they are logical and inevitable.

If we want to make global strides, we have to work together as one.

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