Thematics
(Extracted from thematic paper on
Innovation Strengths and Weaknesses)
National strengths and weaknesses
The EIS results by country, combined with EXIS 1 data
for innovation demand and governance, were used
to explore national strengths and weaknesses. Many
countries show marked differences in innovation
capabilities. For instance, the Czech Republic
performs much better on innovation demand and applications
than on intellectual property. An important question
of policy significance is if the best policy response
is to further improve the country strengths or
to improve areas of weakness.
The optimal policy response will depend on specific
national conditions that might make it easier to
improve the strengths than the weaknesses, or vice
versa. In some cases building up the areas of strengths
could have a positive influence on the weaknesses,
as when investment in knowledge creation leads
to higher levels of patenting. Alternatively, this
might not occur if very poor performance in innovation
and entrepreneurship acts as a barrier to an improvement
in patenting.
This example points to two opposing perspectives
on how innovative capabilities develop. The first
suggests that innovative capabilities can spill
over from areas of strengths to areas of weakness.
The second perspective suggests that all inputs
must develop approximately equally – a ‘blockage'
in one field, such as poor knowledge creation or
low levels of entrepreneurship, would prevent progress.
Of course, both perspectives could also be true,
depending on specific conditions or indicators.
A test of the second option is to correlate the
variance for the seven composite indicators (the
five EIS composite indices plus the two indices
for demand and governance extracted from the EXIS
report) against the SII. The variance is calculated
after standardizing the results for each country
to remove the performance effect, whereby some
countries perform better on the EIS than other
countries. A country with zero variance would perform
identically on all seven composite indices. This
could occur when all composite indices equal zero
(very poor performance) or always equal to 1 (very
good performance).
Low Variance |
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High Variance |
|
EU average in grey – source : Strengths and
Weaknesses report EIS 2005 & EXIS report
Figure 15 gives the correlation results between
the variance and the SII for 21 countries for which
there are complete data. Using a log-linear model,
there is a statistically significant negative relationship,
with performance on the SII declining with the
amount of variance in the seven sub-indices (R
2 = 0.84, p < 0.001). This indicates that well-rounded
and equivalent performance on all areas might increase
innovation performance. This implies that, given
equal costs, policy would be more effective in
improving overall innovation performance by concentrating
on improving areas of weakness than on making further
improvements to areas of strength.
Figure 15. Negative
correlation between variance and the SII |
|
This implies that, given equal costs, policy would
be more effective in improving overall innovation
performance by concentrating on improving areas
of weakness rather than on making further improvements
to areas of strength. It also suggests that for
countries where innovation performance is high,
marginal gains are optimised when all dimensions
of innovation are addressed together. This analysis
could be taken into consideration when discussing
policy orientations.
1 For the
EXIS report, see Arundel, A. and H. Hollanders,
EXIS: An Exploratory Approach to Innovation Scoreboards
( http://www.trendchart.org/scoreboards/scoreboard2004/scoreboard_papers.cfm ). |
