Business leaders and policy makers around the world are striving to encourage innovation. This is led by the appreciation of the huge role innovation plays in productivity and economic growth.

Each year researchers from INSEAD, Cornell and WIPO explore the policy conditions required for innovation, and analyse how effective nations are at creating such a fertile environment. This analysis results in a Global Innovation Index, which ranks nations according to their innovative capabilities.

Bis innovation ChartNCUB’s Professor Graeme Reid said:
“League tables come and go but this one is prepared by a widely respected team. The UK has risen over recent years to second place. This is a wonderful result that reflects the strong performance of UK firms and enthusiastic support for science and innovation from UK Government. But let us be in no doubt: the UK’s leading position is fragile, with competitor nations are snapping at our heels. Standing still is not good enough. We need more business innovation and even more support from Government.”

The researchers considers a set of innovation inputs, including political and regulatory institutions, a strong higher education and research base, market and finance support and the business net-works to commercialise research.

They match these against the various outputs of innovation, such as the creation of new products, the diffusion of knowledge or the production of creative goods and assets.

When all of these things were taken into account, Switzerland headed the rankings for the 5th year in a row, with the UK in a commendable 2nd place.

Factors underpinning success

The authors discovered three key factors that policy makers in the top countries had done particularly well.

1. Innovation support – whether it was tax incentives for research or funding support, the study found that direct policy support for innovation was a key factor in the success of a country.
2. Institutions matter – whilst innovation is fundamentally a people driven activity, institutions provide crucial support for innovation. This support includes providing political stability, a supportive tax structure, strong research institutions and excellent links between research and business.
3. Promoting risk – risk is an inevitable part of innovation, and the authors suggest that robust frameworks to mitigate risk are crucial to give investors the confidence to back innovators.

The UK approach

These findings echo the NCUB’s study Growing Value: Business-University Collaboration for the 21st Century, which concluded that four key factors underpin the innovation potential of a nation:

1. A strong research base – this is a particular strength in the UK, with 71 institutions featured in the 2015 QS global rankings of universities, with 4 universities featured in the global top 10.
2. Fluid and frequent sharing – as Mark Buchanan highlighted in a recent paper, most innovation is of the recombinant variety, so success is dependent upon exceptional knowledge sharing between universities and business.
3. Promote entrepreneurship – especially in universities to encourage a start-up spirit amongst researchers. This was echoed in a recent study in Nature that highlighted how many researchers wished to join a start-up, should such opportunities emerge.
4. Coherent policy making – finally, any attempts by policy makers to support innovation should be uniquely tailored to specific industries to ensure it has the maximum chances for success.

Despite the strong performance of the UK in the innovation rankings, it should not be taken as a cue to rest on our laurels. Whilst the UK is doing many things well, the report highlights weaknesses in areas such as the number of STEM graduates, and the ease of starting a business.