Innovation Capacity does not Equal Innovativeness

A new Innovation Capacity Index (ICI) ranks country innovation competitiveness on a broad set of variables which are deemed to play a key role in boosting a nation’s capacity for innovation. The challenge with this index is that it appears NOT to be a reliable predictor of actual innovation outcomes within a country.

The Top 10 countries as ranked by the Innovation Capacity Index are:

When you take a closer look at which countries (and more specifically cities) that are actually DELIVERING economic benefits through innovation a very different picture emerges. Four of the top 5 (Sweden, Finland, Switzerland, Netherlands) perform poorly on actual innovation delivery based on a recent McKinsey Digital Study. Only the USA performs well on Capacity for Innovation and actual Innovation delivered!

What is even more curious is that countries such as Japan and Germany who both have established and rising cities of innovation don’t appear in the Top 10 of the Innovation Competitive Index. Japan comes in at 15th position and Germany at 20th. It’s also interesting to note that Singapore which ranks 6th on the Innovation Capacity Index is seriously underperforming on actual innovation delivered. The Mckinsey Study classifies Singapore as a “hot spring”, the kind of city with lots of economic momentum, but in need of a little Creative Class infusion to make it more vibrant and diverse.

Some of the hottest up-and-coming innovation clusters in the world are in Kiel, Germany and Miyazaki, Japan.