Toyo University announces Global Innovation Ranking 2019 for 60 major countries

Toyo University

2019/11/28 19:45

November 28, 2019

Toyo University

Toyo University announces Global Innovation Ranking 2019

The Center for Global Innovation Studies (GlC, President Prof. H. Takenaka) of Toyo University, successfully developed currently the Global Innovation Index (GII).

The center has selected 58 indicators to compare and verify the progress level of innovation of 60 countries. These indicators have been selected as they are considered to be contributing to the globalization and innovation.

The center announced details of these 58 indicators, rankings and scores of 60 countries, and recommendations based on the analysis results.

Points of this Release

▶ Toyo University originally developed “Global Innovation Index” which is an index that measures the progress of innovation in countries around the world

▶ Ranking the 60 major countries using the same index, “Global Innovation Ranking 2019”

▶ Singapore ranked first in the ranking in 2019 and Japan ranked 32nd

▶ In the future, rankings will be created and published every year

▶ We strongly expect that the GII may contribute to the measurement and international comparison on policy implementation and cooperate management

The Center for Global Innovation Studies (GIC)(Director Professor Heizo Takenaka) was founded in January 2016, with the goal of promoting the study of global innovation. Its mission is the advancement of research on innovation theory and methodology that impacts diverse systems within today’s global society.

Global Innovation Index

1. Objectives

Current global community may clearly show two major structural changes.

One is globalization in political and economic sphere and another is technological innovation led by cyber technology. Those dramatic changes may necessitate the effective tools to measure those changes from dramatic and common standpoints.

The Global Innovation Research Center (Gll, President Prof. H. Takenaka), Toyo University established in April 2017, successfully developed currently the Global Innovation Index (GII).

We strongly expect that the GII may contribute to the measurement and international comparison on policy implementation and cooperate management from the view point of globalism and innovation.

2.Global Innovation Index

(1)Index

 The center has selected 58 indicators, including productivity per worker, the number of patent applications, and the number of technical experts in R&D to compare and verify the progress level of innovation of each country. These indicators have been selected as they are considered to be contributing to the growth of GDP per capita in the long term. In actuality, there has been found a high correlation between the past growth rates and the rankings based on the index.

 And, these indicators have been grouped into five categories, International Harmonization, Market, Technology, Human Power, and Policy, and also into 18 subcategories to be able to make categorical comparison from country to country.

(2)targeted countries for data collection

Data collection targeted 216 countries and regions. Of the 58 indicators set by the Center, 60 countries were able to collect data for 53 or more indicators.

(3)targeted period

The data collection year is as close as possible to 2018, depending on the country and the nature of the data, the previous year’s are sometimes used. In addition, data on countries not included in the international statistics are collected by our Center as for major countries.

(4)score calculation method

①Items that do not seem to have an impact on innovation due to the population size of the country were relativized by dividing the data value by the population. (New business registrations, etc.)

②The data was reversed for the item whose data value is the opposite for the innovation power. (National burden ratio, etc.)

③In addition, the deviation value which the data value of the country was calculated, and the items that seemed to have a large impact on innovation were doubled in weight and ranked.

(5)for detailed analysis on 5 major countries

In the analysis of this ranking, in the international comparison of globalization and innovation, five countries, including Japan, the United States, China, Germany, and Singapore were noted. By selecting Germany from Europe and Singapore from Asia, in addition to the major countries in the United States and China. We made it possible to make a more detailed international comparison of innovation progress.

3. Ranking 2019 based on GII

(1)Summary

①Overview of Top 10 countries

Singapore, the Grand Duchy of Luxembourg, Switzerland, New Zealand and Iceland are all small countries. This is because, when measuring innovation, there are items calculated as per capita numbers (relative values) rather than national scale. On the other hand, absolute values are used for items that emphasize scale. For this reason, the United States is ranked 9th, the UK is ranked 10th, and China is ranked 15th.

② evaluation on Japan

a. Summary

Japan's overall ranking was 32nd out of 60 countries. In the G7 countries, it was the sixth in the seven countries following the United States (9th), the United Kingdom (10th), Canada (17th), Germany (20th) and France (24th). 

In this way, the power of globalization and innovation is inferior to the third-largest economy in the world of GDP because, in our five areas, Human Power and International Harmonization are particularly low. On the other hand, Technological Innovation shows relatively good figures. The following is an evaluation of Japan's score by taking up representative indicators.

b. Human Capital

Due to the declining birthrate and aging population, the proportion of young people in the working-age population is the lowest among the 60 countries (60th), indicating “youth of the population”, which is far below other countries.  In addition, students' entrepreneurship is almost the lowest (42nd) out of 43 countries where data was obtained.

c. About Diversity

Regarding the ratio of female managers, it is 53rd out of 56 countries where data was obtained. In addition, the tolerance to LGBT is based on a questionnaire, but it is the lowest in 43 countries out of 43 countries where data was available.

d. Knowledge Base

Although there are no markedly low numbers or items, the number of R & D engineers is inferior to China or the United States.

e. Entrepreneurship

Although there are no markedly low numbers or items, the venture capital investment is slightly lower than the average, it is only 22nd out of 34 countries where data was obtained.

(2) Comparison of detailed analysis on 5 major countries

Comparing the five major countries such as Singapore, the United States, Germany, China, and Japan, Singapore, which ranks first in the overall ranking, has a well-balanced score for each item. On the other hand, China and the United States show outstanding scores in Technological Innovation. This is a result of using absolute values such as the number of R & D engineers and the amount of R & D investment, but it shows a technological advantage that greatly defines innovation power.

a. International Harmonization

Singapore is high, Japan is low. International Harmonization is necessary for small countries such as Singapore to tackle innovation, especially notably the reduction rate of greenhouse gas reduction compared to 1990. On the other hand, this low score in Japan is likely to hinder the development of Japanese innovation power.

b. Market Situation

Singapore and labor productivity are high, and the value of venture capital investment is 86.4.

d. Technological Innovation

China is prominent in the number of R & D engineers, followed by the United States, which has a very high number of patent applications and is in a dominant position. Japan outperforms Germany in terms of the number of patents and royalty income such as intellectual property rights.

c. Human Power

The percentage of young people in the working-age population is low, indicating the “population youth” with a declining birthrate and an aging population, and the scores for diversity such as women and immigrants are all very low.

e. Related Policy

Singapore has a higher score than other countries in terms of financial condition and tax system. China has a low score for dealing with corruption and political stability.  

From this chart, it can be seen that Singapore is a well-balanced point, the United States and China are outstanding points in technology, and Japan has a particularly low Human Power.

It can be seen that American entrepreneurship, Chinese knowledge base are outstandingly high, and Japanese human capital is low.

(3)ranking and economic growth

The correlation between the GIR ranking and the per capita GDP growth rate showed a high correlation coefficient of 0.80. It became clear that there is a high correlation between the progress of innovation and economic growth.

4. Comparison with other rankings

The similar ranking for economic growth and innovation includes the IMD (International Institute for Management Development)’s World Competitiveness Ranking", WEF (World Economic Forum)’s Global Competitiveness Index, and Global Innovation Index(Global Innovation Index) by WIPO (World Intellectual Property Organization), Cornell University and INSEAD. IMD and WEF focus on business and economic efficiency. On the other hand, Toyo university and Cornell University / INSEAD / WIPO have social indicators. It has become extensive. Below are the top four ranking countries and the five major countries ranking.

5. Advice for Japan

Japan’s “Human power” is ranked very low, 57th out of 60 countries. Among them, International migrant stock (% of population). Total Inbound internationally mobile students in tertiary education, female share of employment in managerial positions (%), share of students who want to work in their own business, and World University Rankings 2019 by subject: engineering and technology, these are crucial issues for Japanese policy.

Japan's ranking is low, and the government's policy response seems to be possible in a relatively short period of time. Service trade openness, easiness of starting a business, foreign direct investment, net inflows (% of GDP), venture capital investments as a percentage of GDP, share of students who want to work in their own business, enrolment rate of 25 years old or older, TOEFL iBT average score, international migrant stock (% of population), total inbound internationally mobile students in tertiary education, female share of employment in managerial positions (%),the number of international association meetings, maximum income tax rate.

Substituting the Singapore figures for the 15 indicators of “number of jobs”, number of international conferences held (ratio of GDP), income tax progressive taxation maximum corporate tax rate (5-year average), corporate tax rate, the score is 53.6. It became clear that the ranking rose to 15th place.

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