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INDONESIA WAS RANKED 85 OF 142
COUNTRIES IN INNOVATION
Innovation is key in driving
economic growth and prosperity, as it encourages the creation of new
industries, companies, jobs and also improves efficiency, quality of products
and services. In an increasingly global market landscape, the proficient
innovators are indeed the ones in position to seize the global opportunities.
In order to provide innovation
benchmarking across countries on innovation and facilitate public-private
dialogue, the Global Innovation Index (GII) was created. GII is co-published by
Cornell University, INSEAD, and the World Intellectual Property Organization
(WIPO, a specialized agency of the United Nations).
In the latest GII 2013
report, Indonesia is ranked 85th out of 142 countries. This is an increase
of 15 spot from 2012 ranking, which put Indonesia among top ten countries with
the highest jump in rankings with Uganda (+28) and Costa Rica (+21) placed in
top two.
The top 10 economies on the GII
2013 are Switzerland, Sweden, United Kingdom, Netherlands, United States
of America, Finland, Hong Kong (China), Singapore, Denmark, and Ireland.
The report also shows that Indonesia
has a lot of room for improvement in institutions environment (political,
regulatory, and business environment) and business sophistication (particularly
in the knowledge-intensive human capital and businesses).
GEPI is fully committed in these
improvement efforts with concrete programs. Recent programs include the Social Innovation Camp that aims to instill the culture of
innovating, particularly in products and services that solve social issues, and
ANGIN program that accelerates
innovative businesses through funding, mentoring, and other supports.
Deeper Analysis
GII considers the innovation inputs
and outputs in computing the ranks. Innovation inputs are key elements required
to drive innovations: institutions (political, business, regulatory
environment), human capital and research, infrastructure, market
sophistication, and business sophistication. Innovation outputs are the outcome
of innovation activities: knowledge and technology outputs and creative
outputs.
Innovation efficiency ratio is
calculated as the innovation output scores over innovation input scores. In
other words, the ratio measures how efficient a country is converting the
elements into outputs.
Indonesia’s innovation efficiency
ratio is among the highest in the world in 2013. However, in terms of
innovation inputs, Indonesia has a lot of room for improvements, especially in
institutions (ranked 138th, bottom five in global ranking) and business sophistication
(ranked 112th out of 142 countries). Indonesia has indeed been putting
increasing efforts in diversifying towards innovation-intensive sectors, and
this effort has need to be boosted with even greater urgency. Indonesia has to
be aware of the well-documented phenomenon: ‘resource curse’ or ‘paradox of
plenty’ in which countries with natural endowments tend to focus on
resource-extracting activities and hinder innovation that might put these
countries on slower growth path.
The innovation transition graph is
provided below. There is a clear relationship between the innovation
(represented by GII score) and GDP per capita. Indonesia is on the verge to
join the “leaners” group. At this stage, strategic and concerted improvements
in institutional frameworks, tertiary education, infrastructure, business
sophistication are required.
GII scores and GDP per capita in PPP$ (bubbles sized
by population). Source: GII report 2013
Reference: http://www.gepindonesia.org/2013/07/07/indonesia-ranked-85th-out-of-142-countries-in-the-global-innovation-race/
