New Zealand Punching Above its Weight in Global Innovation Index 2015
Friday 18th September 2015
Article written by: Harriet Tregonning
New Zealand’s Global Innovation Index Rankings in a Nutshell:
15th overall in the innovation index – up three places from 18th in 2014
1st in the world for ease of starting a business and protecting investors
1st in the South East Asia and Oceania region for intangible assets (including trademark applications)
Innovation inputs and outputs
The Global Innovation Index 2015 was released this morning. New Zealand ranked 15th overall out of 141 countries, an improvement from 18th in 2014.
This improvement is mirrored in the innovation output sub-index, where New Zealand has also improved from 18th to 15th. “Innovation output” measures knowledge and technology outputs and creative outputs. There has been no movement in the ranking for the innovation input sub-index, with New Zealand ranked 13th in both 2015 and 2014. “Innovation input” measures institutes, human capital and research, infrastructure and market and business sophistication. However, despite the ranking staying the same there was an improvement in the raw score for this sub-index.
As a result of the improvement in innovation output, New Zealand’s innovation efficiency ratio has increased from 0.7 to 0.8. The ratio measures how much innovation output a country derives from its innovation inputs. In comparison, China has a ratio of 1.0 (the highest in the South East Asia and Oceania region) and Australia has a ratio of 0.7. Switzerland, the top ranking country in the innovation index overall, also has a ratio of 1.0.
New Zealand’s “innovation input” ranking appears to be based on its strengths in relation to institutional factors such as political stability, regulatory environment and business environment. It was ranked 5th globally and a close 2nd (to Singapore) in the South East Asia and Oceania region for this measure. New Zealand was again ranked first in the world for ease of starting a business and protecting investors.
Areas of weakness identified on the input side include the percentage of graduates in science and engineering, GDP per unit of energy use, foreign direct investment inflows as a percentage of GDP, and gross expenditure on research and development financed from abroad.
Knowledge and technology outputs
Interestingly, while the overall innovation output ranking is unchanged from 2014, New Zealand’s ranking for knowledge and technology outputs has declined from 17th to 20th. This appears to be mainly attributable to a lower ranking in “knowledge diffusion” which considers measures such as royalty and license fee receipts, high-tech exports, and communication, computer and information services exports. The ranking for “knowledge creation” also slipped from 9th to 12th place. However, patent applications filed by residents, scientific and technical articles published and new business creation remain strengths for New Zealand.
In the patent arena, notable findings include:
- New Zealand’s global ranking for residents filing patent families in at least three offices has improved from 27th to 25th indicating that more New Zealand business are looking at protecting their inventions overseas. Its global ranking for residents filing at the national patent office (i.e. IPONZ) has also improved, from 8th in 2014 to 6th in 2015.
- Both New Zealand and Australia have maintained their rankings, 19th and 26th respectively, for PCT applications filed. However, both countries have seen a reduction in the number of PCT applications filed per billion PPP$ GDP.
- New Zealand has improved its ranking for royalties and licence fee receipts from 24th in 2014 to 22nd in 2015, representing 0.46% and 0.59% of total trade respectively. Australia maintained its ranking of 32nd, but saw a decline in royalties and licence fee receipts from 0.27% to 0.23% of total trade.
The 2014 and 2015 rankings are based on data from 2012 and 2013 respectively, so it will be interesting to see what impact the introduction of the Patents Act 2013 may have on these statistics in future.
In contrast, the ranking for creative outputs has risen from 17th to 10th. While all subcategories show improved rankings, the most prominent is “intangible assets”, which includes domestic and international trademark applications. New Zealand is ranked 9th globally for this measure, up significantly from 26th in 2014, and is ranked as the top country in the South East Asia and Oceania region.
Like most countries, New Zealand has experienced a decline in the number of trademark applications issued to residents by the national office (i.e. IPONZ) per billion PPP$ GDP, and its ranking has slipped from 10th to 15th. However, there has been a marked increase in the corresponding number of Madrid System applications filed, with New Zealand’s ranking climbing from 52nd with a value of 0.24 to 12th with a value of 2.14. This indicates that New Zealand companies have a strong interest in protecting brands overseas. Australia has also seen a rise in its ranking, from 28th in 2014 to 23rd in 2015.
The Global Innovation Index is jointly published by the World Intellectual Property Organization (WIPO), Cornell University, and the graduate business school INSEAD. The full report and details of the methodology used to prepare the index are available from https://www.globalinnovationindex.org