Innovation Barometer Global Scorecard - GE - General Electric · PDF fileInnovation Barometer: Global Scorecard 1 ... overall score. ... Netherlands and Japan achieve innovation by

Visit us at access.gecapital.com

© Copyright 2012 General Electric Corporation, All Rights Reserved.

1

GE

January 2013

Innovation Barometer: Global Scorecard 1

As part of this year’s Global Innovation Barometer, GE’s Global Market Intelligence team created a scoring model to rank 50 countries on certain factors inherent to their specific government, business and educational environments that impact the level of innovation within each country. We named it GE’s Global Innovation Scorecard.

The Innovation Scorecard has five pillars, and five factors within each pillar. Each country is ranked by each factor and an average score is created for each pillar. Countries are then placed into one of an upper, lower, or two middle quartiles for each pillar and for an overall score. The countries that fall into the top quartile are considered leaders in laying out the kind of environment necessary to promote innovation.

The first two pillars are government related. The first based on how strict of a regulatory environment is in place, the second on how the government promotes and invests in programs that could foster innovation. The next two pillars are focused on businesses within each country. One pillar measures factors outside of a firms’ control– what types of capital funding are available and how accessible are loans, among other factors. The other pillar looks at whether or not firms promote an innovative environment within their own walls. The fifth and final pillar looks at the level and quality of training and education within each country. Key Findings A heavy tax burden does not always impede innovation. Six countries that fell in the top quartile in the overall scorecard were outside of

the top 20 countries for the effect and extent of tax burden category. Those countries are Finland, Germany, Israel, Sweden, the United States and United Kingdom. Top countries do not depend on their governments to supply the latest technological advances. Looking at government procurement

of advanced technology and availability of latest technology, several countries that rank highly in the overall scorecard rank higher in availability of tech than they do in ranking the government procurement of tech. Places like Hong Kong, the United Kingdom, the Netherlands and Japan achieve innovation by having their businesses do more than the governments in bringing in the latest technology.

Innovation Barometer

Global Scorecard

Top Quartile Countries – Innovation Scorecard

Canada Finland Germany Hong Kong Israel Netherlands Norway Singapore Sweden Switzerland United Kingdom United States



2

GE

January 2013


Foreign Direct Investment as a percent of GDP is highest in many countries that do not perform well overall on GE’s Innovation Scorecard. Peru, Portugal, Hungary, Vietnam, Chile all fall into the top quartile for this factor but overall are in the bottom half of the

rankings. Obviously a major reason for this is that countries with large overall economies would require a greater amount of FDI to impact the percentage of GDP. Also, larger economies have a higher percentage of domestic investment supporting their growth. But investors should do a better job of identifying countries that do more to promote innovation for their capital plays. Marketing is a key factor in successful innovation. Having the capacity to innovate within a country is just part of the equation. Once a

new product is created it needs effective messaging, branding and strategic planning to bring it to market. Top scorecard countries like the US, Canada and Germany also rank in the top quartile for extent of marketing. Having a top math and science education is not essential to fostering an innovative environment. This plays into the Innovation

Barometer finding that process innovation is taking precedence over costly and time consuming new product innovation. Managing business and operational change could be factors playing a larger role than engineering in the current economic environment. Top scorecard countries like the United States, United Kingdom, Israel and Norway fall outside of the top 20 for quality of math and science education.



3

GE

January 2013


Factor Definitions and Rankings Pillar 1 – Government Regulatory Intellectual Property Protection – World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. How would you rate intellectual property protection, including anti-counterfeiting measures, in your country? Without sufficient regulation in place to protect intellectual property, domestic businesses and thinkers will look over borders to innovate. Foreign firms are more likely to invest capital or position staff within countries where their intellectual property is safe.

Top Quartile - IP Protection

Austria

Finland

France

Germany

Hong Kong

Ireland

Netherlands

Norway

Singapore

Sweden

Switzerland

UK

Bottom Quartile - IP Protection

Argentina

Columbia

Egypt

Mexico

Nigeria

Peru

Philippines

Romania

Russia

Thailand

Turkey

Vietnam

Burden of Government Regulation - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking.

How burdensome is it for businesses in your country to comply with governmental administrative requirements (e.g., permits, regulations, reporting)? An overabundance of regulations could hinder innovation domestically by creating the appearance of too much government involvement. For foreign firms, burdensome regulation means additional costs of doing business when they consider expansion into new markets.

Burden of Govt. Regs. Top Quartile

Chile

China

Finland

Hong Kong

Malaysia

Netherlands

Nigeria

Saudi Arabia

Singapore

Sweden

Switzerland

UAE

Burden of Govt. Regs. Bottom Qtl

Argentina

Belgium

Brazil

Czech Republic

France

Greece

Hungary

Italy

Peru

Poland

Portugal

Russia



4

GE

January 2013


Transparency of Government Policymaking - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. How easy is it for businesses in your country to obtain information about changes in government policies and regulations affecting their activities? Critically important for foreign firms looking to do business across borders. Without a strong history of transparency, the potential for foreign firms to innovate and grow becomes more risky and less likely.

Top Quartile - Transparency

Austria

Canada

Chile

Finland

Hong Kong

Malaysia

Netherlands

Singapore

Sweden

Switzerland

UAE

UK

Bottom Quartile - Transparency

Argentina

Czech

Egypt

Greece

Hungary

Italy

Korea

Philippines

Poland

Romania

Russia

Vietnam Ethical Behavior of Firms - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking.

How would you compare the corporate ethics (ethical behavior in interactions with public officials, politicians, and other enterprises) of firms in your country with those of other countries in the world? Corporate ethics plays greatly into partnerships, a key finding in this year’s Innovation Barometer. With firms looking to fill their talent and capability gaps by teaming with other firms, the knowledge that partners conduct business ethically allow for greater collaboration.

Top Quartile - Ethical Behavior

Australia

Canada

Denmark

Finland

Germany

Japan

Netherlands

Norway

Singapore

Sweden

Switzerland

UK

Bottom Quartile - Ethical Behavior

Argentina

Columbia

Czech

Greece

Hungary

Indonesia

Italy

Nigeria

Peru

Romania

Russia

Vietnam



5

GE

January 2013


Extent and Effect of Taxation - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. What impact does the level of taxes in your country have on incentives to work or invest? Favorable taxation includes policies that provide incentives for research and development and for training and development of the existing labor force while also keeping the total corporate tax rate competitive with other industrial nations.

Top Quartile - Tax Burden

Canada

Chile

Hong Kong

Indonesia

Malaysia

Netherlands

Nigeria

Saudi Arabia

Singapore

South Africa

Switzerland

UAE

Bottom Quartile - Tax Burden

Argentina

Belgium

Brazil

Denmark

France

Greece

Hungary

Italy

Portugal

Romania

Russia

Turkey

Pillar 2 – Government Environment Quality of Overall Infrastructure - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. How would you assess general infrastructure (e.g., transport, telephony, and energy) in your country? A strong infrastructure allows products to get to market, both for domestic consumption and to ports for exporting. Technology infrastructure is essential for global connectivity and to succeed in bringing in foreign investment.

Top Quartile - Infrastructure

Austria

Canada

Denmark

Finland

France

Germany

Hong Kong

Netherlands

Portugal

Singapore

Switzerland

UAE

Bottom Quartile - Infrastructure

Algeria

Argentina

Brazil

Columbia

Egypt

Indonesia

Nigeria

Peru

Philippines

Romania

Russia

Vietnam



6

GE

January 2013


Government Procurement of Advanced Technology - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. Do government procurement decisions foster technological innovation in your country? The government needs to take an active role in supplying innovators with technology. Without a healthy process for providing innovators with products they need, they will take their ideas across borders.

Top Quartile - Govt. Tech Pcmnt

China

Finland

Germany

Israel

Malaysia

Netherlands

Saudi Arabia

Singapore

Sweden

Switzerland

U.S.

UAE

Bottom Quartile - Govt. Tech Pcmnt

Argentina

Czech

Egypt

Greece

Hungary

Italy

Philippines

Poland

Romania

Russia

South Africa

Thailand

Availability of Latest Technologies - World Economic Forum Global Competitiveness Report, 2011-2012. To what extent are the latest

technologies available in your country? It is not only important for governments to procure technology, but to drive innovation, they need to bring in the latest technologies and ensure that these technologies are available to the innovators within their borders.

Top Quartile - Tech Availability

Austria

Belgium

Finland

Hong Kong

Japan

Netherlands

Norway

Singapore

Sweden

Switzerland

U.S.

UK

Bottom Quartile - Tech Availability

Argentina

China

Columbia

Egypt

Indonesia

Nigeria

Peru

Poland

Romania

Russia

Thailand

Vietnam



7

GE

January 2013


Resident Patents per 1000 Working Age Population – World Development Indicators, UN Population Statistics, Haver Analytics, GE Global Market Intelligence While governments need to ensure that the patent process is accessible and not cumbersome, business and individual innovators need to prove to the global marketplace that ideas are flowing. This will promote direct investment.

Top Quartile - Patents

Austria

Denmark

Finland

France

Germany

Israel

Japan

Korea

Norway

Sweden

U.S.

UK

Bottom Quartile - Patents

Brazil

Columbia

Egypt

India

Indonesia

Mexico

Nigeria

Peru

Philippines

Saudi Arabia

UAE

Vietnam

High Tech Exports as a % of Total Manufacturing Exports – World Development Indicators Ranking, Haver Analytics, GE Global Market Intelligence While exporting is key to current account balances and commodities, agricultural, and natural resource exports drive certain economies, exporting technology is proof of innovation within a country.

Top Quartile - High Tech Exports

China

France

Hungary

Ireland

Korea

Malaysia

Netherlands

Philippines

Singapore

Switzerland

Thailand

UK

Bottom Quartile - High Tech Exports

Chile

Columbia

Egypt

Nigeria

Peru

Portugal

Saudi Arabia

South Africa

Spain

Turkey

UAE

Vietnam



8

GE

January 2013


Pillar 3 – Business – External Factors Venture Capital Availability - World Economic Forum Global Competitiveness Report, 2011-2012. In your country, how easy is it for

entrepreneurs with innovative but risky projects to find venture capital? Capital funding can come from banks or from private investors. The availability of capital within a country is a key factor in determining whether or not innovations make it to market. Ease of Access to Loans - World Economic Forum Global Competitiveness Report, 2011-2012. How easy is it to obtain a bank loan in your country with only a good business plan and no collateral? Capital funding is key to innovation, and if credit markets are tight or bank regulations prevent innovators from accessing capital, those innovators will look outside their borders for funding.

Top Quartile - Access to Loans

Singapore

Sweden

UAE

Norway

Hong Kong

Malaysia

Finland

Saudi Arabia

Indonesia

Canada

Belgium

U.S.

Bottom Quartile - Access to Loans

Argentina

Greece

Hungary

Ireland

Italy

Korea

Nigeria

Poland

Portugal

Russia

Spain

Vietnam FDI and Technology Transfer - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. To what

extent does foreign direct investment (FDI) bring new technology into your country? Though governments and firms can bring technology into a country and share it with other firms and innovators, another key factor is seeing what technology is brought in and able to be shared through foreign investment.

Top Quartile - FDI Tech Transfer

Belgium

Canada

Czech

Hong Kong

Hungary

Ireland

Israel

Malaysia

Mexico

Saudi Arabia

Singapore

UAE

Bottom Quartile - FDI Tech Transfer

Argentina

China

Columbia

Finland

Germany

Greece

Italy

Korea

Nigeria

Romania

Russia

Vietnam



9

GE

January 2013


University – Industry Collaboration in R&D - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. To what extent do business and universities collaborate on research and development (R&D) in your country? Often the best thinkers and innovators are found on campuses. Further, in the fast paced corporate world, it often is beneficial to get a more academic view of innovations within in company.

Top Quartile - Univ-Biz Colab

Australia

Belgium

Finland

Germany

Ireland

Israel

Netherlands

Singapore

Sweden

Switzerland

U.S.

UK

Bottom Quartile - Univ-Biz Colab

Argentina

Egypt

Greece

Italy

Nigeria

Peru

Philippines

Poland

Romania

Russia

Turkey

Vietnam

Foreign Direct Investment, Net Inflows as % of GDP – Ranking. World Development Indicators, Haver Analytics, GE Global Market

Intelligence Investment within a country of foreign capital signifies a strong government regulatory environment and tax structure, the availability of trustworthy firms to partner with and the availability of a qualified labor force.

Top Quartile for FDI

Belgium

Chile

Denmark

Hong Kong

Hungary

Ireland

Israel

Malaysia

Peru

Portugal

Singapore

Vietnam

Bottom Quartile for FDI

Finland

Germany

Greece

India

Italy

Japan

Korea

Philippines

South Africa

Switzerland

U.S.

UK



10

GE

January 2013


Pillar 4 – Business- Internal Factors Firm Level Technology Absorption - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. To what extent do businesses in your country absorb new technology? Governments can assist in providing access to technology and foreign investors can insure technologies make their way into new markets, but firms need to be active in adopting available technology and utilizing these advancements for further innovation

Top Quartile - Tech Absorption

Austria

Finland

Hong Kong

Israel

Japan

Korea

Norway

Singapore

Sweden

Switzerland

U.S.

UAE

Bottom Quartile - Tech Absorption

Argentina

China

Columbia

Egypt

Greece

Italy

Nigeria

Peru

Poland

Romania

Russia

Vietnam

Capacity for Innovation - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. In your country,

how do companies obtain technology? [Low Ranking: exclusively from licensing or imitating foreign companies; High Ranking: by conducting formal research and pioneering their own new products and processes] Pioneering new products and processes versus licensing or copying them from foreign firms indicates a higher level of innovators and a willingness of firms and governments to promote innovation.

Top Quartile - Innovation Cap.

Austria

Belgium

Finland

France

Germany

Israel

Japan

Netherlands

Sweden

Switzerland

U.S.

UK

Bottom Quartile - Innovation Cap.

Argentina

Chile

Columbia

Egypt

Greece

Mexico

Nigeria

Peru

Philippines

Romania

Thailand

Vietnam



11

GE

January 2013


Production Process Sophistication - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. In your country, how sophisticated are production processes? While sophisticated production processes in themselves are evidence of innovation, they also provide a platform for process innovations, a trend that was exemplified in the results of this year’s Innovation Barometer

Top Quartile – Prod. Process

Austria

Belgium

Finland

Germany

Ireland

Israel

Japan

Netherlands

Norway

Sweden

Switzerland

U.S.

Bottom Quartile – Prod. Process

Argentina

China

Columbia

Egypt

Greece

Hungary

Nigeria

Peru

Philippines

Romania

Russia

Vietnam

Extent of Marketing - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. In your country, to what extent do companies use sophisticated marketing tools and techniques? Once innovations are borne, it is essential for these products or processes to be promoted in order to find a viable marketplace.

Top Quartile - Marketing

Austria

Canada

France

Germany

Hong Kong

Israel

Japan

Netherlands

Sweden

Switzerland

U.S.

UK

Bottom Quartile - Marketing

Columbia

Egypt

Greece

Hungary

Indonesia

Nigeria

Peru

Poland

Romania

Russia

Thailand

Vietnam



12

GE

January 2013


Company Spending on R&D - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. To what extent do companies in your country spend on R&D? Governments can do their part to promote innovation, and individual innovators can access capital and investment to push their ideas forward, but companies will be challenged to successfully innovate without dedication to invest in research and development.

Top Quartile - R&D Spend

Austria

Denmark

Finland

Germany

Israel

Japan

Korea

Singapore

Sweden

Switzerland

U.S.

UK

Bottom Quartile - R&D Spend

Argentina

Columbia

Egypt

Greece

Hungary

Nigeria

Peru

Poland

Romania

Russia

Thailand

Vietnam

Pillar 5 – Education & Training Quality of Math & Science Education - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking.

How would you assess the quality of math and science education in your country’s schools? The quality of math and science education throughout schooling is essential to foster the growth of innovators.

Top Quartile - Math & Science

Australia

Belgium

Canada

Finland

France

Hong Kong

Korea

Malaysia

Netherlands

Singapore

Switzerland

UAE

Bottom Quartile - Math & Science

Argentina

Brazil

Chile

Columbia

Egypt

Mexico

Peru

Philippines

Portugal

South Africa

Spain

Turkey



13

GE

January 2013


Quality of Management School - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. How would you assess the quality of management or business schools in your country? Having a strong stable of domestic management schools not only helps future business leaders with real world business skills needed to promote ideas, but prevents skilled students from seeking education elsewhere and potentially not returning to their home turf.

Top Quartile - Mgmt School

Belgium

Canada

Chile

Finland

France

Netherlands

Singapore

Spain

Sweden

Switzerland

U.S.

UK

Bottom Quartile - Mgmt Schools

Columbia

Czech

Egypt

Greece

Hungary

Japan

Nigeria

Poland

Romania

Russia

Turkey

Vietnam

Quality of Scientific Research Institutions - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. How would you assess the quality of scientific research institutions in your country? Once education is completed, it is essential that the dedication to new ideas, technology and innovation continue. Nations with public and/or private research institutions have an advantage over those that don’t have the ability to incubate new thinking.

Top Quartile - Research Inst.

Australia

Belgium

Finland

Germany

Israel

Japan

Netherlands

Singapore

Sweden

Switzerland

U.S.

UK

Bottom Quartile - Research Inst.

Columbia

Egypt

Greece

Indonesia

Nigeria

Peru

Philippines

Romania

Russia

Thailand

Turkey

Vietnam



14

GE

January 2013


Availability of Scientists and Engineers - World Economic Forum Global Competitiveness Report, 2011-2012 Weighted Average Ranking. To what extent are scientists and engineers available in your country? Primary and management schooling, job opportunities and rule of law are all essential factors in growing, and more importantly, keeping talented scientists and engineers.

Top Quartile - Scientists/Engrs

Canada

Finland

Greece

India

Israel

Japan

Singapore

Sweden

Switzerland

U.S.

UAE

UK

Bottom Quartile -Scientists/Engrs

Argentina

Brazil

Columbia

Egypt

Mexico

Nigeria

Peru

Philippines

Romania

Russia

South Africa

Vietnam

Fixed Broadband Internet Subscriptions - World Economic Forum Global Competitiveness Report, Ranking, 2011 or most recent year available. Fixed broadband Internet subscriptions per 100 population The ability to access the latest technology quickly, to market new innovations globally, and the access to innovators, thinkers and idea-creators across the globe are essential for a country to succeed as innovative.

Top Quartile - Broadband

Belgium

Canada

Denmark

France

Germany

Hong Kong

Korea

Netherlands

Norway

Sweden

Switzerland

UK

Bottom Quartile - Broadband

Columbia

Egypt

India

Indonesia

Malaysia

Nigeria

Peru

Philippines

Saudi Arabia

South Africa

Thailand

Vietnam



15

GE

January 2013


List of Countries Measured: Algeria Argentina Australia Austria Belgium Brazil Canada Chile China Columbia Czech Denmark Egypt Finland France Germany Greece Hong Kong Hungary India Indonesia Ireland Israel Italy Japan Korea

Malaysia Mexico Netherlands Nigeria Norway Pakistan Peru Philippines Poland Portugal Romania Russia Saudi Arabia Singapore South Africa Spain Sweden Switzerland Thailand Turkey U.S. UAE UK Venezuela Vietnam

Documents

Innovation Barometer Global Scorecard - GE - General Electric · PDF fileInnovation Barometer: Global Scorecard 1 ... overall score. ... Netherlands and Japan achieve innovation by