"most innovative countries in the world" easy fixes for "balance" and better


#1

The World Economic Forum recently posted a listicle on the “most innovative countries in the world” according to its Global Competitiveness Report published last year (pdf).

The components of the report’s innovation pillar (copied below, p545 in the pdf) at once demonstrate the low bar for characterizing innovation and the attractiveness of counting patents. 6 of the 7 innovation measures are based on an opinion survey. Patent filings is the only non-survey measure. None of the measures are welfare relevant. Strength of protection of intellectual property is the 2nd measure of the first pillar: institutions.

What are some of the easiest improvements, even if we momentarily stipulate that policy should be ‘balanced’ to maximize total innovation rather than to maximize intellectual property as an end in itself?

  • The institutions survey question would ask to what extent the intellectual property regime is calibrated to encourage investment, protect follow-on innovation, and prevent excessive litigation.
  • An innovation survey question would be added, perhaps the following: Open innovation practices: In your country, to what extent have businesses leveraged open source, open data, open standards, and other open innovation practices and resources?

Of course ‘balance’ is a terrible compromise; we should instead demand the objectives of freedom, equality, and security. This would warrant a deeper examination of the report, but still, easy further improvements exist:

  • The institutions survey question would ask to what extent knowledge policy favors commons-based production
  • Patent counts would be counted as a negative, an indication of cancer in a country’s innovation systems.

Introducing more non-survey based data and more welfare relevant measures would be harder but very worthwhile, for future competitiveness (or with enough change, goodness?) reports or other projects.

Pillar 1: Institutions

1.02 Intellectual property protection
In your country, how strong is the protection of intellectual property, including anti-counterfeiting measures? [1 = extremely weak; 7 = extremely strong] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

Pillar 12: Innovation

12.01 Capacity for innovation
In your country, to what extent do companies have the capacity to innovate? [1 = not at all; 7 = to a great extent] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

12.02 Quality of scientific research institutions
In your country, how would you assess the quality of scientific research institutions? [1 = extremely poor—among the worst in the world; 7 = extremely good—among the best in the world] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

12.03 Company spending on R&D
In your country, to what extent do companies spend on research and development (R&D)? [1 = do not spend on R&D; 7 = spend heavily on R&D] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

12.04 University-industry collaboration in R&D
In your country, to what extent do business and universities collaborate on research and development (R&D)? [1 = do not collaborate at all; 7 = collaborate extensively] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

12.05 Government procurement of advanced technology products
In your country, to what extent do government purchasing decisions foster innovation? [1 = not at all; 7 = to a great extent] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

12.06 Availability of scientists and engineers
In your country, to what extent are scientists and engineers available? [1 = not at all; 7 = widely available] | 2013–14 weighted average
Source: World Economic Forum, Executive Opinion Survey

12.07 PCT patent applications
Number of applications filed under the Patent Cooperation Treaty (PCT) per million population | 2010-2011 average
This indicator measures the total count of applications filed under the Patent Cooperation Treaty (PCT), by priority date and inventor nationality, using fractional count if an application is filed by multiple inventors. The average count of applications filed in 2010 and 2011 is divided by population figures for 2011. In the absence of reliable data on PCT applications for Taiwan (China) and Hong Kong SAR, two advanced economies that are not signatories of the Treaty, the number of applications is estimated as follows: first, we compute the average number of all utility patent applications filed with the United States Patents and Trademarks Office (USPTO) for 2010 and 2011. We then compute the average number of PCT applications for 2010 and 2011, before computing the ratio of the two averages (1.59). For the computation of the two averages, only economies with a two-year average number of at least 100 USPTO applications and 50 PCT applications are considered. Taiwan and Hong Kong are excluded in both cases. We then divide the number of USPTO applications filed by residents of Taiwan (19,892) and Hong Kong (1,024), respectively, by the ratio above in order to produce estimates for PCT applications. As a final step, we compute the estimates per million population—that is, 537.2 for Taiwan and 90.3 for Hong Kong. The estimates are used in the computation of the respective Innovation pillar scores of the two economies.
Sources: Organisation for Economic Co-operation and Development (OECD), Patent Database, (situation as of June 2014); For population: International Monetary Fund, World Economic Outlook Database (April 2014 edition); World Economic Forum’s calculations