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Press Release -- November 18th, 2014
Source: Huawei
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Asia Continues To Fuel Global Innovation

Global Innovation Index 2014 results for Asian markets announced

[Shenzhen, China, November 18, 2014]: Asian economies continue to drive global innovation, with one fifth of the world’s most innovative markets located in Asia, according to the Global Innovation Index 2014 (GII). Singapore and Hong Kong retained their places in the top 10 global rankings, followed by the Republic of Korea, Japan, China, and Malaysia as the most innovative economies in the region.

Upper-middle income countries such as China and Malaysia are showing signs of breaking into the top tier of GII country rankings, alongside the high-income economies that have dominated the top slots since the Index was first published in 2007. Switzerland led the global index for the fourth consecutive year, while China achieved the highest year-on-year improvement, moving from 35th place in 2013 to 29th in 2014.

As the global economy shows signs of recovery, countries worldwide are focusing on maintaining growth and creating jobs. Asian countries in particular are increasing their investment in innovation and providing more employees with training to ensure a high level of output and sustained growth. China, Thailand, and Mongolia lead the world in the provision of formal employee training to improve productivity. This illustrates the importance of “the human factor in innovation,” the theme of this year’s GII. Co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO), the GII Index is a relative measure of the innovation capabilities of 143 countries.

2014 Asian rankings

Commenting on the 2014 report findings, Soumitra Dutta, a professor at Cornell University and one of the report’s main authors, said: “The Global Innovation Index has evolved into the leading global study of innovation competitiveness. Leaders from the public and private sectors can use the insights of the Global Innovation Index both to improve their own innovation capabilities and to benchmark their performance against that of peer nations and regions.”

Dr. Li Sanqi, Chief Scientist at Huawei, a 2014 GII Index knowledge partner, said: “Innovation drives new forms of education. Online courses, interactive teaching methods, and an increased focus on scientific topics all help narrow the job market skill gap, especially in the engineering profession. In the years to come, the whole education system will undergo further disruptions, supported by increasingly intelligent learning systems that adapt to students’ needs on a never-ending journey of learning.”

Innovation efficiency in Asia

A country’s “innovation efficiency” compares the level of its innovation inputs (institutions, human capital, research, and other elements) with the level of its innovation outputs (creative goods and services, both online and offline).

2014 Innovation efficiency in Asia

China, Mongolia, Vietnam, India, Malaysia and Thailand have experienced rising levels of innovation because of improvements made to institutions, universities, and relevant infrastructure.

The report also includes chapters on the importance of improving skills as a key means of boosting innovation and productivity, and looks at the ways in which a county’s stock of human capital affects its ability to innovate. Moreover, as R&D is generally unprofitable for firms with low levels of human capital, training and education can accelerate the process of technological diffusion in an economy.

Asia: Key data from 2014 Index

  • China has the highest proportion of firms offering employees formal training worldwide, while Thailand ranks the 2nd and Mongolia ranks the 7th worldwide.
  • Republic of Korea (1st), Japan (2nd) and China (3rd) hold top three places worldwide for the number of national patent office applications by GDP.
  • China (1st), Malaysia (4th), Thailand (6th) and Singapore (10th), hold four of the top 10 places worldwide for creative goods exports in relation to total trade.
  • Asian countries hold all top five places worldwide in secondary education, as defined by the Programme for International Students Assessment for Reading, Mathematics, and science (PISA) with China leading the way followed by Singapore, Hong Kong SAR China, Republic of Korea and Japan.
  • Hong Kong SAR China (1st), Malaysia (2nd), Singapore (5th), Vietnam (7th) and China (8th) hold five of the top ten places in the world for high-tech imports as a proportion of total imports.
  • The highest growth rates in enrolment in tertiary education are in Asia, with China leading the way. China not only have expanded its higher education system, but also enlarged its research system even more.

China: key data from the 2014 index

Strengths:

  • China is 1st in the world for secondary education standards as defined by the PISA scale for reading, mathematics and science.
  • China is 1st in the world for the percentage of firms offering formal training to employees.
  • China is 1st in the world for domestic resident patent application and utility model applications (patent right granted by a state or jurisdiction).
  • China is 1st in the world for creative goods exports.
  • China is 1st in the world for high tech exports minus re-exports.
  • China is 2nd in the world for both gross capital formation as well as growth rate of PPP
  • China has a higher “innovation output” than its “innovation input”. This means that China is able to translate the innovation capabilities into high level innovation output. China ranked number 2 in the world on its innovation efficiency, and it’s the first among world’s Upper Middle Income economies.
  • China also leads within BRICS (Brazil, Russia, India, China and South Africa) countries and is on track to enter the top 25 in the GII. Among BRICS, four improved their positions with Brazil by three places to reach 61st rank, Russia by 13 places to reach 49th, China by 6 places to reach 29th, and South Africa by 5 places to reach 53rd. India, on the other hand, has continued to slip by a further 10 places to 76th position this year.

Areas for improvement:

  • Despite China’s strength, the GII has also shown that China is low on knowledge-intensive employment, ranked 101st. This means that a large number of employees in China are still working in low value-added industries such as manufacturing.
  • The process of setting up a business in China is more complicated than in other economies. China ranked 122nd in the world on ease of starting a business.
  • China’s online creativity in the area of Wikipedia edits and video uploads on YouTube is also still limited as per the internationally available indicators used by the Index.
  • The number of foreign students coming to study in China (tertiary inbound mobility) is low. China ranked 100th worldwide in terms of attracting foreign students to its universities.

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