Want to be more Innovative? Live in a free country!

Recently, Cornell University, European Institute of Business Administration (INSEAD) and World Intellectual Property Organization (WIPO) unveiled their annual 2013 Global Innovation Index, GII-2013.

The CU-INSEAD-WIPO study ranked 142 countries on their innovation capabilities by using 84 indicators, which included the quality of higher education, availability of microfinance and venture capital, government support, etc. The need for proper infrastructure and sufficient funding to support innovation is nothing new.

However, even a brief look at the 142-country GII-2013 list led me to a curious observation: the top of the ranking was heavily populated by countries known for their well-developed democratic institutions and adherence to the rule of law. To make sure that this observation had any statistical meaning, I compared the GII-2013 list to the 2013 Freedom of the World Report published by Freedom House, a U.S.-based non-government organization that monitors democratic developments around the world. (I know, I know, Freedom House is often criticized for its highly subjective, often biased, assessments. Yet, it represents the only systematic source of data on democratic credentials of the world countries.)

The Freedom of the World Report makes assessments in two categories, political freedom (PF) and civil liberties (CL), by using a 7-point scale; 1 represents the most free and 7 the least free rating. Depending on the rating, a country is characterized as “Free,” “Partly Free” or “Not Free.” Of 30 countries on the top of GII-2013, 28 were “Free” according to the Freedom House classification, with the combined PF/CL ranking of 1.07. Only two countries, Hong Kong (#7) and Singapore (#8) were classified as “Partly Free” (with the combined PF/CL ranking of 3.5 and 4.0, respectively).

In contrast, among 30 countries at the bottom of GII-2013, only two, Lesotho (#124) and Benin (#127) were classified as “Free” (the combined PF/CL ranking of 2.5 and 2.0, respectively). Of the rest, 17 countries were “Partly Free” and 11 “Not Free” (the combined PF/CL ranking of 4.1 and 6.2, respectively). Indeed, there appears to be a strong correlation between the level of democratic development in a given country and the ability of this country to innovate.

This finding may have certain implications for U.S. government when it allocates funds to promote entrepreneurship and innovation in foreign countries. Government officials would be wise to consider the maturity of democratic institutions in recipient countries when anticipating future ROI.

As for the rest of us, we’ve got another confirmation of what we always intuitively knew: to be more innovative, one has to live in a free country!

image credit: wipo.int

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Eugene Ivanov is innovation consultant helping organizations establish internal and external innovation programs. He also assists his clients with selecting and defining R&D problems that can be successfully solved by using crowdsourcing approaches. He tweets at @eugeneivanov101.