The World’s 10 Most Innovative Economies
In the 21st century, innovation has become the heart and soul of economic policy. Developed and developing nations alike are in the race to leave industrialization behind, adapting instead to technology-focused, entrepreneurial societies.
Customized cancer treatment, faux meat products, and the smart home technologies are frequently positioned as ‘the next big thing’. But which countries are consistently innovating the most?
Today’s graphic comes from the seventh annual Bloomberg Innovation Index and highlights the 10 most innovative economies, and the seven metrics used to rank 2019’s top contenders.
Bloomberg calculated each country’s innovation score using seven equally-weighted metrics.
- R&D Spending
All research and development funding invested in an economy each year.
- Patent Activity
Number of domestic patents filed, total patent grants, patents per population, filings per GDP, and total grants awarded measured against the global total.
- Tertiary Efficiency
Total enrollment at post-secondary institutions, graduation levels, and number of science and engineering graduates.
- Manufacturing Value-added
Manufacturing output levels that contribute to exports and domestic economic growth.
Overall productivity levels of the working-age population.
- High-tech Density
Number of domestic high-tech public companies, measured against the number of domestic public companies and the global total of public high-tech companies.
- Researcher Concentration
Number of professionals currently engaged in research and development roles.
More than 200 countries were initially considered for Bloomberg’s Innovation Index. Any country reporting in less than six categories was automatically eliminated, leaving 95 countries remaining. Bloomberg publishes the results for the top 60 most innovative economies each year.
Notable Countries in the Top 60
The U.S. rejoined the top 10 after dropping to 11th in 2018 for low scores in education. Israel moved up five spots to 5th place, while Romania made the largest overall gain, jumping six spots to rank in the top 30.
|2019 Rank||Economy||Total Score||Change in Ranking|
|#1||🇰🇷 South Korea||87.38||0|
|#8||🇺🇸 United States||83.21||3|
Brazil rejoined the list at number 45, after not being included on the 2018 list. The United Arab Emirates made the list for the first time, marking the highest debut ever at number 46.
Tunisia and Ukraine were the two countries with the largest losses, which both fell out of the top 50 this year. To date, South Africa is the only Sub-Saharan nation to be ranked in the index.
Newcomers to the Innovation Index in 2019 are some of the largest emerging economies, such as India, Mexico, Vietnam, and Saudi Arabia.
Impact of Global Innovation
Innovation is complex─many factors play a role in the ideation, development, and commercialization of any new technology. And while innovation success can fuel economic growth, it is generally more accessible in high-income economies, where R&D funding is readily available.
“The battle for control of the global economy in the 21st century will be won and lost over control of innovative technologies.”
—Tom Orlik, Bloomberg Economics
The focus of an economy that prioritizes innovation, however, is not simply allocating resources for a group of people─it’s discovering new methods, models, and products that create a better quality of life for society.
10 Types of Innovation: The Art of Discovering a Breakthrough Product
How do companies like Amazon and Apple consistently make game-changing products? Here are 10 types of innovation, and the tactics that lead to big breakthroughs.
The Art of Discovering Breakthrough Products
As venture capitalist Peter Thiel once put it, “competition is for losers”.
It’s inevitable that every company must be out there battling for market share, but you don’t really want to be in a situation where the competition is so stiff that any potential upside is eroded away in the process—―a scenario known as perfect competition in economics.
To avoid perfect competition, companies must strive to build an economic moat that gives them a sustainable competitive advantage over time. While these protective moats can arise from a number of different sources, in today’s information economy they most often arise from the power of innovation.
But where does innovation come from, and is there a universal framework that can be applied to help consistently make big breakthroughs?
The 10 Types of Innovation
In today’s infographic, we showcase the culmination of years of in-depth research from Doblin, an innovation-focused firm now owned by Deloitte.
After examining over 2,000 business innovations throughout history, Doblin uncovered that most breakthroughs don’t necessarily stem from engineering inventions or rare discoveries.
Instead, they observed that innovations can be categorized within a range of 10 distinct dimensions—and anyone can use the resulting strategic framework to analyze the competition, to stress test for product weaknesses, or to find new opportunities for their products.
Here are the 10 types of innovation:
|1.||Profit Model||How you make money|
|2.||Network||Connections with others to create value|
|3.||Structure||Alignment of your talent and assets|
|4.||Process||Signature of superior methods for doing your work|
|5.||Product Performance||Distinguishing features and functionality|
|6.||Product System||Complementary products and services|
|7.||Service||Support and enhancements that surround your offerings|
|8.||Channel||How your offerings are delivered to customers and users|
|9.||Brand||Representation of your offerings and business|
|10.||Customer Engagement||Distinctive interactions you foster|
From Theory to Practice
What does innovation look like in practice?
Let’s see how well-known businesses have leveraged each of these 10 types of innovation in the past, while also diving into the tactics that modern businesses can use to consistently make new product breakthroughs:.
Innovation Types #1-4: “Configuration”
According to Doblin, the first four types of innovation center around the configuration of the company, and all the work that happens “behind the scenes”.
Although innovation types in this category are not directly customer-facing, as you can see in the examples below, they can still have an important impact on the customer experience. How your company and products are organized can have a crucial downstream effect, even enabling innovations in other categories.
Two of the most interesting examples here are Google and McDonald’s. Both companies made internal innovations that empowered their people to make important advancements further on downstream.
In the case of McDonald’s, the franchisee insight that led to the introduction of the Egg McMuffin spearheaded the company’s entire breakfast offering, which now accounts for 25% of revenues. Breakfast is also now the company’s most profitable segment.
Innovation Types #5-6: “Offering”
When most people think of innovation, it’s likely the offering category that comes to mind.
Making improvements to product performance is an obvious but difficult type of innovation, and unless it’s accompanied by a deeply ingrained company culture towards technical innovation, such advancements may only create a temporary advantage against the competition.
This is the part of the reason that Doblin recommends that companies focus on combining multiple areas of innovation together—it creates a much more stable economic moat.
Apple has a reputation for innovation, but the product ecosystem highlighted above is an underappreciated piece of the company’s strategy. By putting thought into the ecosystem of products—and ensuring they work together flawlessly—additional utility is created, while also making it harder for customers to switch away from Apple products.
Innovation Types #7-10: “Experience”
These types of innovation are the most customer-facing, but this also makes them the most subject to interpretation.
While other innovations tend to occur upstream, innovations in experience all get trialed in the hands of customers. For this reason, intense care is needed in rolling out these ideas.
In the early days of the internet, online shipping was precarious at best—but Amazon’s introduction of Amazon Prime and free expedited shipping for all members has been a game-changer for e-commerce.
Executing on such a promise was no small task, but today there are 150 million users of Prime worldwide, including some in metro areas who can get items in as little as two hours.
Making Innovations Happen in Your Organization
How can organizations approach the 10 types of innovation from a more tactical perspective?
One useful resource is Doblin’s free public list of over 100 tactics that correspond with the aforementioned framework.
The one-pager PDF provides a range of typical dimensions for approaching each type of innovation. In essence, these are all different ways you could consider when trying to differentiate your product or service—and at the very least, it provides a useful thought experiment for managers and marketers.
How to Avoid Mediocre Leadership in Trying Times
This graphic explores the five behaviors that lead to mediocre leadership and the damaging consequences that they can have on employees.
In today’s complex world, leaders are being asked to step up in dynamic and unexpected ways.
Unfortunately, many of them are not equipped with the tools they need to lead under pressure. As a result, they fail to serve themselves and their employees effectively, and put the future of their entire organization at risk.
The Behaviors That Result in Mediocre Leadership
Today’s infographic from Vince Molinaro’s Accountable Leaders reveals the common behaviors that can result in leaders becoming mediocre due to mounting day-to-day pressures.
Order Vince Molinaro’s new book, Accountable Leaders
Leadership accountability is one of the most important ingredients for driving business growth and maintaining a healthy corporate culture.
How can leaders set the tone for accountability in their organization?
Accountable Leaders Invest in Themselves
Every leader has an obligation to their employees, their customers and their community, but failing to put themselves first could have serious consequences—and cause a ripple effect across other parts of the business.
In fact, 40% to 80% of a manager’s time is spent on activities that add little to no value, when the majority of their time should be spent investing in their personal development.
By not having a holistic view of their development, leaders succumb to the day-to-day challenges that come with managing a company, such as:
- Getting in over their head
- Confusing acting rough with tough
- Mistaking effort for results
- Feeling like the victim
- Being insecure and unable to use their voice
- Constantly needing to hear good news
- Needing to win at all costs
- Waiting for permission to act from senior leaders
- Being driven to distraction and lacking focus
- Not learning from past mistakes
Moreover, if leaders struggle to meet expectations, the risk is that they either give up, or ultimately become a mediocre leader—but what exactly does that look like?
The Characteristics of a Mediocre Leader
Mediocre leadership has become remarkably commonplace, yet it is not always easy for organizations to identify.
Here are the five problematic characteristics of a mediocre leader:
- Blames others: Never personally acknowledges their role or contribution to any mistake or failure.
- Selfish and self-serving: Regularly acts out of self-interest and brings a sense of entitlement to the role.
- Uncivil and mean: Routinely mistreats, demeans and insults others, usually in public.
- Inept and incompetent: Makes bad decisions, resulting in a trail of disaster behind them.
- Lacks initiative: Looks for the easy way out by deflecting responsibility.
Leaders cite several reasons for falling into this mediocre leadership trap, including their fear failure, having unclear leadership expectations, and being overloaded with tasks that could be delegated elsewhere.
The Danger of Mediocre Leadership
It comes as no surprise that this style of leadership has a negative impact on employees, with 73% claiming that they spend a significant amount of time dealing with problems that arise from an ineffective manager.
However, employees will put up with a mediocre leader because they find the work itself meaningful, or they value the relationship they have with their peers.
But while mediocre leaders can bring a team closer together through their collective misery, eventually this reaches a tipping point which could result in a high staff turnover or low rates of employee engagement.
Avoid a Culture of Mediocrity
As we navigate uncertain waters, leaders must not only demonstrate agility and resilience—they must also advocate for a culture of accountability.
”Senior leaders create the culture and set the tone for the organization. It’s imperative that they drive the set of behaviors influencing the behaviors of the next line leaders.”
—Molinaro, Vince (2020), Accountable Leaders.
But in order to maintain accountability across an organization, mediocre behavior must be addressed, and difficult decisions will need to be made.
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