Compiled by: Sachi Kapoor | Concept & Edited by: Dr. Mohan Dewan

In this fast paced world where everything can be indexed, why not innovation? Before we jump into understanding the concept of Global Innovation Index, let us first review what exactly is innovation? It is the process of translating an idea or invention into a good or service that creates value for which customers will pay. Innovations transform the way we communicate, travel and live our daily lives.

The Global Innovation Index (GII), 2018 is in fact the 11th edition of its kind. The GII is co-published by Cornell University, INSEAD and WIPO. The GII Report ranks the innovation capabilities of world economies. The 2018 report ranks 126 economies which approximately represents of 90% of the world's population and about 96% of global GDP. The Innovation Index helps to recognize the key role of innovation which enables economic growth and prosperity. It is interesting to note that the GII not only counts merely innovations but also driving factors of innovations such as level of research and development.

The question that arises here is how exactly can one calculate factors such as research and development? Well, the GII considers 7 major activities which enable these factors to grow, such as: (1) Institutions, (2) Human capital and research, (3) Infrastructure, (4) Market sophistication, and (5) Business sophistication, (6) Knowledge and technology outputs, and (7) Creative outputs. The analysis of these varied factors leading to GII rankings further helps industries and companies to tie up with entities of such countries displaying a high GII.

Having stated in brief the relevance of GII, let us now have a look at the top 20 countries listed as per the GII, 2018:

COUNTRIES 2018 2017
Switzerland 1 1
Netherlands 2 3
Sweden 3 2
United Kingdom 4 5
Singapore 5 7
United States of America 6 4
Finland 7 8
Denmark 8 6
Germany 9 9
Ireland 10 10
Israel 11 17
Korea, Republic of 12 11
Japan 13 14
Hong Kong (China) 14 16
Luxembourg 15 12
France 16 15
China 17 22
Canada 18 18
Norway 19 19
Australia 20 23

Most experts were surprised with USA dropping out of the top 5 positions. It is however commendable to note the progress of China making it to the top 20 list. India too has shown a rise by 3 positions coming up to 57 as reflected in the GII, 2018. One of the most remarkable growths that one can observe is that of Israel coming up by 6 positions worldwide.

In addition with continuing businesses with varied countries, we would definitely recommend indulging in business with Israeli companies considering their impeccable performance in the past year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.