This week, a new report which compares the innovation performance of the European Union’s member countries, emerging countries such as Brazil and China, and the US and Japan came out.
Each country was assigned a score based on a range of national innovation “indicators”, things that included number of patents, doctoral degrees awarded, and similar.
I’ve summarised the results in the table below which shows innovation effectiveness compared to Europe:
|USA||48% better||49% better|
|Japan||39% better||40% better|
|China||57% worse||55% worse|
|Russia||37% worse||37% worse|
|Brazil||58% worse||58% worse|
|India||52% worse||53% worse|
Table: Innovation Performance compared to European Union
Now, at a national scale, such measures are an interesting composite, in my view, of the effect of both policymaking and sentiment in the private sector. Of course, one is deeply dependent on the other, but there is a really important point that’s revealed in the data, and it is this: if innovation is truly going to be the driver of economic value in the future, Europe is in deep trouble.
The USA and Japan have systemic measures laced through their socio-economic systems which mean in the long term – if we say innovation is going to be the driver of value – they will survive a globalised environment.
Russia and India’s indicators are flat or slipping, so either their government and innovators will partner to do something amazing, or they’re going to be out of the game in the long term.
But China and Brazil’s performance is on a significant upswing. Those are both economies with dynamic populations and increasingly innovative policy environments. They’re also populous, and don’t have the systemic layers of regulation and burocracy that hampers you in the EU.
I mean, for example, have a go at the European Working Time Directive, which limits the amount of work an employee is able to do in a given week. Now, I’m not for a moment saying that it is right to abuse a workforce, but other economies don’t have limits on their workforces in this way. It is something that makes the EU less competitive.
Now, here in Europe, most countries are experiencing the harshness of public sector cuts as national governments try to find ways to balance their books. Taxes are increasing, and citizens are forced to shoulder new burdens, because the alternative is to pass the excesses of the last few decades to coming generations.
But the figures in this report paint a quite grim future prospect, because even if half a decade of national pain pays off, those countries in Europe who have not created systemic innovation capabilities may be worse off than they are now. Their share of the global growth pie is going to go down, not up.
I think policymakers understand this. And I know the private sector does.
But what is needed now is the kind of concerted action that we’re seeing in balancing the national finances applied to solving systemic innovation failures in Europe. That will be at least as hard a task as the financial one presently being faced, and probably be as expensive.
I fear, though, that countries are like companies on the subject of innovation – they say all the right things, but unless they’re faced with a near death experience, innovation is a nice-to-have.
A near death experience is not a desirable thing at a national level, for obvious reasons which are being played out across Africa presently. But what else is going to force the kinds of change that will make put Europe’s innovation infrastructure at the top of the league table?