Four Gulf states - the UAE, Saudi Arabia, Qatar and Kuwait - have made it to the top 50 countries list in the Global Innovation Index (GII) for 2013 even as Switzerland and Sweden retained their first and second spots.

The others in the Top 10 list are United Kingdom which jumped two places to clinch the third spot; Netherlands (ranked 6th in 2012); US (10); Finland (4); Hong Kong (8); Singapore (3); Denmark (7) and Ireland (9).

The index was published by Cornell University, Insead, a leading international business school, and the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations.

This year’s study benefits from the experience of its knowledge partners: Booz & Company, the Confederation of Indian Industry, du and Huawei, as well as an advisory board of 14 international experts.
 
The GII 2013 is calculated as the average of two sub-indices. The Innovation Input Sub-Index gauges elements of the national economy which embody innovative capabilities grouped in five pillars: Institutions; Human capital and research; Infrastructure; Market sophistication, and Business sophistication.

The Innovation Output Sub-Index captures actual evidence of innovation results, divided in two pillars: Knowledge and technology outputs and Creative outputs.

According to the report, the UAE ranks top in the Mena region in four pillars; Institutions (Political, Regulatory and Business Environment), Human Capital and Research (Education, Tertiary Education, and Research & Development), Infrastructure (Information & Communication Technologies, General Infrastructure and Ecological Sustainability), and Business Sophistication (Knowledge Workers, Innovation Linkages & Knowledge Absorption).

While Saudi Arabia topped in the regional list in market sophistication (Credit, Investment and Trade & Competition), Kuwait excelled in Knowledge & Technology Outputs (Knowledge Creation, Knowledge Impact and Knowledge Diffusion), and Qatar in Creative Outputs (Creative Intangibles, Creative Goods & Services and Online Creativity).

The report pointed out that despite the economic crisis, innovation was alive and well. "Research and development spending levels were surpassing 2008 levels in most countries and successful local hubs were thriving," it stated.

This year’s report casts additional light on the local dynamics of innovation, an area which has remained under-measured globally. It shows the emergence of original innovation eco-systems, and signals a needed shift from a usual tendency to try and duplicate previously successful initiatives.

“Worldwide, innovation is increasingly seen as a powerful tool to strengthen the competitiveness and global relevance of corporations and nations,” remarked Bruno Lanvin, the report’s co-editor and executive director of Insead’s European Competitiveness Initiative.

“In the Mena region, the recent political and social changes have also underlined the importance of addressing the needs and expectations of populations in terms of growth and job creation, especially for the young. This year's GII shows that, in this regard, performances in the region remain uneven, but innovation is becoming a visible and pertinent instrument for economic diversification, enhanced competitiveness and global integration in an increasing number of Mena countries.”
 
"Underperforming countries in Mena region can catch up with innovation leaders if they “learn” to innovate. This will require them to transform their innovation inputs (on which they perform relatively well) into marketplace results (on which they perform considerably lower) more efficiently," stated Hatem Samman, the lead economist and director of Booz & Company’s Ideation Center.

These Mena countries can achieve this by strengthening and aligning their policies on innovation inputs—such as human capital and research—with policies that help translate them into tangible products and services—such as high- and medium-high tech output—to spur economic activities and create wealth.

Strong innovation hubs can provide an efficient platform for such transformation by facilitating knowledge creation and sharing, and by providing a bridge for the commercialization of ideas. As a result, more Mena countries can move up the innovation ladder towards innovation learners and chart their way into innovation leadership.

“In the Middle East, we are seeing governments focus on building innovation capabilities as a means of catalysing the growth and diversification of their economies. For instance, many countries are establishing innovation hubs in which large state-owned enterprise champions, whose business goals are aligned with the objectives of the innovation hub, are acting as the critical drivers of hub activities,” said Rasheed Eltayeb, the principal in the Public Sector Practice at Booz & Company.

“These state-owned enterprise champions have the talent pools to stimulate innovation, the financial resources to bridge the gap between research and commercial success, and the scale to create markets for innovative products,” he stated.

WIPO director general Francis Gurry said dynamic innovation hubs were playing a greater role in the Middle East’s innovation efforts, and were multiplying around the world despite the difficult state of the global economy.

"These hubs leverage local advantages with a global outlook on markets and talent," observed Gurry.

“For national-level policy makers seeking to support innovation, realising the full potential of innovation in their own backyards is often a more promising approach than trying to emulate successful innovation models elsewhere,” he added.

The GII 2013 looked at 142 economies around the world, using 84 indicators including the quality of top universities, availability of microfinance, venture capital deals – gauging both innovation capabilities and measurable results.

Switzerland and Sweden’s performance reflects the fact that both countries are leaders in all components (pillars) of the GII, consistently ranking in the top 25.

The UK has a well-balanced innovation performance (ranking 4th in both input and output), in spite of a relatively low level of growth in labor productivity.

The United States continues to benefit from its strong education base (especially in terms of top-rank universities), and has seen strong increases in software spending and employment in knowledge-intensive services. The US was last in the GII top 5 in 2009, when it was number one.

“The results of the GII provide testimony to the global nature of innovation today. The top 25 ranked countries on the GII are a mix of nations from across the world – North America, Europe, Asia, and Oceania," stressed SoumitraDutta, co-editor of the report and Anne and Elmer Lindseth Dean, Samuel Curtis Johnson Graduate School of Management, Cornell University.

"While high income economies dominate the list, several new players have increased their innovation capabilities and outputs. On average, high-income countries outpace developing countries by a wide margin across the board in terms of scores; a persistent innovation divide exists," he added.
 
Du chief executive officer Osman Sultan said the creation of an environment that could unleash the potential for innovation for all in a sustainable manner is the way to unlocking the true, tangible potential of value creation.

"It will lay the groundwork for societal change and develop a framework for cohesive synergies through collaboration. The unprecedented socio-economic momentum that has been created in the last few decades in the UAE makes this country very well positioned to continue to play a pivotal role in this exciting journey as a regional hub for innovation,” he added.-TradeArabia News Service