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New Zealand gains ground in the innovation arena

New Zealand gains ground in the innovation arena

New Zealand has climbed two places to rank 13th in the world in the 2012 Global Innovation Index, in which Switzerland, Sweden and Hong Kong retained their top three spots respectively.

The report, which analyses innovation in 141 countries, placed New Zealand third in the Asia / Oceania region after Singapore and Hong Kong.

And New Zealand ranked ahead of Norway (14th), Israel (17th) and Australia (23rd).

Science and innovation minister Steven Joyce said the improvement recognised "the good progress New Zealand is making as a smart and innovative country to do business".

“The index is one of the most widely cited composite indicators of national competitiveness and New Zealand has scored highly on the ease of starting a business, education, knowledge creation and the number of new businesses per capita.

“We’re also ahead of major economies such as Korea, China, Japan and Germany. This shows that although we may not have the size or population of those countries, it’s the quality of our people, their ideas, and the regulatory and business environments that are helping make a positive difference."

2012 Global Innovation Index New ZealandAmong low-income economies the leader is Kenya, and the report also noted a need for the BRIC countries (Brazil, the Russian Federation, India, and China) to invest further in their innovation capabilities to live up to their expected potential.

The index is prepared by the European Institute of Business Administration (INSEAD, a leading graduate business school), and the World Intellectual Property Organisation (a specialised agency of the United Nations).

“The GII is a timely reminder that policies to promote innovation are critical to the debate on spurring sustainable economic growth,” WIPO director general Francis Gurry said.

Five input types are measured: institutions,  human capital and research, infrastructure, market sophistication, and business sophistication. Two output pillars capture actual evidence of innovation outputs: knowledge and technology outputs and creative outputs.

New Zealand's score was 56.63, just over 20 points behind Switzerland's top score of 68.24.

Complementing the overall GII ranking, the Global Innovation Efficiency Index showed which countries were best in transforming given innovation inputs into innovation outputs, with countries strong in producing innovation outputs despite a weaker innovation environment and innovation inputs ranking high – China and India led this charge.

Our output index was three points higher than our input index, and we ranked well on output of creative goods and services (feature films produced, creative goods and exports etc) and in terms of science output, knowledge diffusion – royalty and licensing fees, tech exports.

New Zealand overall strengths

 Strengths (Economy's best percent ranks)
Index/Pillar/Sub-Pillar/Indicator namePercent Rank

6.2.2 New business density01.00
1.3.1 Ease of starting a business01.00
1.2.3 Cost of redundancy dismissal01.00
4.2.1 Ease of protecting investors01.00
2.1.3 School life expectancy01.00
1.2 Regulatory Environment00.99
7.2.1 Recreation and culture consumption00.99
5.1.5 GMAT mean score00.99
6.1.4 Scientific and technical journal articles00.98
1 Institutions00.98
1.2.2 Rule of law00.97
2.1 Education00.97
6.1 Knowledge Creation00.97
1.1.1 Political stability & absence of violence/terrorism00.96
4.1 Credit00.96
1.3 Business Environment00.96
 Weaknesses (Economy's worst percent ranks)
Index/Pillar/Sub-Pillar/Indicator namePercent Rank

6.3.4 Foreign direct investment net outflows00.04
5.3.4 Foreign direct investment net inflows00.04
4.3.3 Imports of goods and services00.17
6.2.1 Growth rate of GDP per person engaged00.32
3.2.4 Gross capital formation00.33
4.3.4 Exports of goods and services00.33
5.2.3 GERD financed by abroad00.34
5.2.5 Share of patents with foreign inventor00.37
7.2.4 Creative goods exports00.42
6.3.3 Computer and communications service exports00.42