Human Capital Still the Main Driver of Innovation in 2014

By August 26, 2014

The annual Global Innovation Index, which this year focuses especially on ‘The Human Factor in Innovation’, highlights the innovative dynamism of middle-income countries such as China and the significant improvement achieved by the sub-Saharan Africa region.

For the fourth year running, the latest Global Innovation Index (GII) has placed Switzerland at the top of the rankings, followed by the United Kingdom and Sweden, both of which have made regular appearances in the top bracket over the years. The index, which is compiled by the World Intellectual Property Organization (WIPO), leading France-based European business school INSEAD and Cornell University in New York State, USA, looks at the criteria which tend to foster innovation in 143 countries and the impact innovation is having on a given’s country’s growth. The 2014 report, which takes as its theme ‘The Human Factor in Innovation’, explores the role of human capital and Human Resources management in the innovation process, and the consequent impact on economic development in the various countries reviewed.

Education and continuous training are key drivers

In order to get the best out of a country’s human capital and boost national innovation capacity, high quality teaching and training are still vital factors, the GII analysts argue. While China and the Russian Federation have seen their rankings improve by 6 and 13 places respectively since the last Index was published, India has dropped 10 places to 76th worldwide, a fall which the analysts largely attribute to a lack of national policies designed to foster human capital. China, now up in 29th position, has achieved the best results among the middle-income group of countries when it comes to the training and development of human capital. Moreover, while public support for Research and Development and company spending on R&D – another key criterion for innovation – have slowed worldwide as a proportion of GDP, the GII analysts expect growth in R&D spending during 2013 and 2014 to be centred mainly in Asia – once again China, plus South Korea and also India.

Persistent global divide, but a regional surge in sub-Saharan Africa

The GII report points to a persistent global ‘innovation divide’, with the top 25-ranked economies maintaining their lead year-on-year over the other countries of the world, which are finding it difficult to retain the human resources they need in order to make progress on the innovation front. The countries at the top of the rankings show positive results across the board on all the 81 indicators used. A comparison of countries from the same geographical region and the same GDP bracket nevertheless reveals that some economies are demonstrating innovative dynamism. The GII describes as ‘innovation learners’ those economies whose innovation performance works out at least 10% higher than their peers within their income bracket.  Sub-Saharan Africa now has more ‘innovation learners’ than any other region, with five countries – Rwanda, Senegal, Malawi, Gambia and Burkina Faso – joining this category this year. Sub-Saharan Africa is also showing the greatest overall improvement in the GII rankings, with Côte d’Ivoire gaining 20 places and Mauritius climbing 13 rungs since the last Index was published.  

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