US Rejoins World's Top 5 Countries for Innovation
The United States is one of the five most innovative countries in the world, according to the Global Innovation Index 2013, a hefty 392-page report published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO). After being off the top 5 list since 2009, the United States saw “strong increases in software spending and employment in knowledge-intensive services” to climb from being ranked 10th in the world in 2012 to 5th in 2013.
The United States was outranked in the top 10 by, in order: Switzerland, Sweden, the United Kingdom, and the Netherlands. The United States beat Finland, Hong Kong (China), Singapore, Denmark, and Ireland.
Before describing the strengths and weaknesses of the United States in the global innovation-driven marketplace and what you can do to help the U.S. retake the top spot, let me first explain how they measured innovation.
What Makes a Country Innovative?
To measure the innovative nature of each country, the Global Innovation Index 2013 uses a framework of seven high-level categories (five inputs and two outputs) covering 84 individual indicators and relying on data from 30 public and private sources. The analysts made adjustments to the framework in 2013. The survey examines 142 economies representing 95% of the world’s population and 99% of the world’s GDP.
- Institutions – political, regulatory, business environments
- Human capital and research – education, research and development
- Infrastructure – ICT, general infrastructure, eco-sustainability
- Market sophistication – credit, investment, trade and competition
- Business sophistication – knowledge workers, innovation linkages, knowledge absorption
- Knowledge and technology outputs – knowledge creation, impact, diffusion
- Creative outputs – intangible assets, creative goods and services, online creativity
What Makes the U.S. “Innovative”?
The U.S. is the world leader in research and development and ranks second in the world for its business and market sophistication.
Business sophistication – 2
Market sophistication – 2
Human capital and research – 6
Knowledge and technology outputs – 7
Institutions – 17
Infrastructure – 17
Creative outputs – 19
• Research and Development
Continued U.S. world leadership in the traditional innovation indicator of research and development is largely attributable to the rankings of the top three U.S. universities. Other indicators for R&D performance included gross expenditure on R&D, where the U.S. ranked 10th, and the number of researchers per million population, where the U.S. was one of 32 countries without data. The analysts opted not to estimate data.
• Business Sophistication
U.S. business sophistication rankings were boosted by the number of patents filed in at least three foreign offices, royalties and licenses as a percentage of service imports, high-tech imports, and the percentage of gross expenditure on research and development financed by business.
• Market Sophistication
U.S. market sophistication rankings were boosted by the ease of getting credit, financial resources provided to the private sector, the ease of protecting investors, the total value of stocks traded, and the number of venture capital deals.
• Individual Indicators
Other indicators contributing to the U.S. regaining its lead as one of the five best-ranked countries included: performance in online government services, computer software spending, GMAT test takers, and the number of five generic top-level domains (gTLDs) registered per population. The five generic domains included com, org, net, biz, and info. The analysts did not include edu or gov. The U.S. tied with Luxembourg, Belize, and Canada for the top spot for the most registered gTLDs per population.
U.S.A. – We’re No. 1! (10% of the time)
The U.S. can celebrate its top honor in the following 8 of the 84 individual indicators:
- Research and development
- Computer software spending as a percentage of GDP
- Government online services
- Cost of redundancy dismissal, including unemployment protections
- Total value of stocks traded as a percentage of GDP
- Number of GMAT test takers (but we ranked 51 in their test scores)
- Citable documents (H index)
- Number of registered generic top-level domains (TLDs) per population
U.S.A. – Let’s Take Back the Top Spot!
The U.S. isn’t even in the top 10 for institutions, infrastructure, and creative outputs.
Although the U.S. has a relatively strong regulatory and business environment, the presence of violence and terrorism (44th for political stability), barriers to starting a business (31st), and low ranking in its freedom of the press (29th), contributed to the U.S. ranking 17th in the world under the institutions category.
The U.S. received its lowest ranking within the infrastructure category – gross capital formation. Also within infrastructure, the U.S. ranked 74th in the world for its ecological sustainability, which assesses energy use and environmental performance. This low ranking suggests that the U.S. would benefit from energy and environmental growth strategies.
• Creative Outputs
U.S. creative output rankings show intangible assets (86th) are an issue, specifically trademarks. The U.S. ranked in the bottom half of the world for the number of trademarks based on GDP when adjusted by purchasing power parity. Also, the U.S. ranked 43rd in the number of international trademark registrations issued through the Madrid system by country of origin. In contrast, the U.S. ranked in the top 15 for the number of patent applications filed by residents under the WIPO-administered Patent Cooperation Treaty and the number of patent families filed in at least three foreign countries. The U.S. also ranked in the top 50 for service imports of IP royalty and license fees.
To take the lead again as #1, the U.S. likely would need to work on its exports of computer and information services, ease of paying taxes, ICT access and use, market capitalization, joint venture/strategic alliance deals, and high-tech exports. It also would need to address its lowest rankings.
• Lowest Ranked
Here are the ten individual indicators where the U.S. ranked lowest, with the ranking given:
- Domestic trademark registrations – 77
- Non-agricultural market access weighted tariff – 77
- Graduates in science and engineering – 77
- Growth of GDP per worker – 80
- Exports of communications, computer, and information services – 84
- ISO 14001 environmental certifications – 94
- FDI net inflows as a percentage of GDP – 97
- ISO 9001 quality certificates/ PP$ GDP/ – 99
- Gross tertiary outbound educational enrollment – 122
- Gross capital formation as a percentage of GDP – 123
Help Make U.S.A. #1 in 2014
Show your patriotic pride in your country by making edits on Wikipedia entries and uploading your videos to YouTube. Each time you do, your country gets recognized for being innovative.
The full report and online interactive tools are available at: