“Robust innovation is essential for economic growth and progress,” said Stephen Ezell, ITIF’s vice president for global innovation. “As countries increasingly vie for leadership in the innovation economy, they can implement policies that try to benefit only themselves but harm the production of innovation in the rest of the world. Or they can implement ‘win-win’ policies that bolster their own innovation capacity while also generating positive spillovers for the entire global economy. For innovation to flourish around the world, we need a system that is doing much more of the latter.”
While previous research has ranked countries based on innovation capabilities or outcomes, this report is the first to assess the impact of countries’ policies on the broader innovation system. The authors examined 14 factors that not only support innovation domestically but have positive spillover effects globally, such as supportive tax systems and investment in R&D and human capital, and another 13 factors that have negative spillover effects, such as forced localisation and weak intellectual property protection.
The UK’s 3rd-place ranking reflected a combination of policies that the report found to be 5th best in its positive contribution to the global innovation ecosystem and also the 7th least damaging.
The report also found a strong correlation between countries’ contributions to global innovation and their levels of domestic innovation success, meaning that doing well domestically on innovation policy can also mean doing well for the world.
Through the report the ITIF urges policymakers, economists, and pundits to treat innovation as important as trade for optimising global growth. The report also calls on the global development and trade community to establish a framework that better distinguishes between policies that are beneficial for the world’s innovation ecosystem and those that are detrimental.
“The world is significantly under-producing innovation that is needed to tackle global challenges, including boosting productivity, improving health, and protecting the environment,” Robert Atkinson, ITIF’s president said. “Policymakers need to better understand and more aggressively push back when countries try to advance their own interests at the expense of global innovation. The world’s leaders need to articulate a more robust vision of commonly shared prosperity based on substantial increases in worldwide productivity and more innovative products and services.”
Finally, ITIF argues leading nations should establish a Global Science and Innovation Foundation to fund scientific and engineering research on key global challenges, particularly through collaborative international research.