The Global Innovation Index is seriously defective

Cornell University’s annual Global Innovation Index for 2015 is now out.  Here are the first ten:

1. Switzerland (Number 1 in 2014)
2. United Kingdom (2)
3. Sweden (3)
4. Netherlands (5)
5. United States of America (6)
6. Finland (4)
7. Singapore (7)
8. Ireland (11)
9. Luxembourg (9)
10. Denmark (8)

The GI index is very carefully done with 79 factors assessed.  What is important, though, is how the factors are weighted in the final formula producing the score for each country.  In my view, it doesn’t give anywhere near sufficient weight on a population basis and gives too much weight on the basis of numbers of patents (95% of which are merely trivial improvement to existing production methods).  Thus Cornell’s listing is improperly weighted if it is to be regarded as a listing of the innovative ability of the actual cultures within the countries.

On a true basis of cultural creativity, Germany, listed 12th, and Israel, listed 22nd, should both appear in the top ten on account of the large number of Nobel prizes they win based on populations and the number of leading edge firms within them. Sweden shouldn’t be there because of the large numbers of patents from only one predominant firm (Ericsson).  Singapore, Ireland and Luxembourg shouldn’t be there on account of the large numbers of foreign (mainly American) firms and research labs invited there.

Taking 79 indicators into account produces a list of 180 countries in which the country scores change in smooth gradations from Switzerland at 1.00 to Venezuela at the bottom at 0.06.  These scores are supposed to correlate with economic performance. Yet in real life only about ten or twelve countries account for half the world’s trade and the other 170 countries account for the rest!  There are some steep discontinuities going on in reality.  Cornell’s list would have it that there are none! There’s too much political correctness in their score formula.  In my view the Global Innovation Index is seriously defective.

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