China topped the world in knowledge and technology outputs this year in a leading innovation index, driven in large part by its scientific productivity, patent applications and hi-tech exports.
Despite its strong showing in sci-tech output, China came in 10th overall in the World Intellectual Property Organisation (Wipo)’s annual Global Innovation Index (GII) released last month.
It was Switzerland that took the top spot in the ranking for the 15th year in a row, raising questions among some in China.
China entered the top 10 for the first time this year, coming behind Switzerland, Sweden, the US, South Korea, Singapore, Britain, Finland, the Netherlands and Denmark.
Some Chinese internet users have questioned the methodology and authority of the index and wondered how Switzerland was the leading innovation economy in the world.
“It’s probably the same as the international university rankings back then, tailor-made for the US and Western countries,” read one popular comment under a report by the Shanghai-based news outlet Guancha.
The index published by Geneva-based Wipo, an agency under the United Nations, is a widely recognised ranking that is now in its 18th edition.
Carsten Fink, chief economist at Wipo, said that while he was not aware of these discussions in China, there had been “similar” discourse in the academic world over the index.
“China’s innovation ecosystem has grown faster than many other innovation ecosystems around the world, including those of many developed economies,” Fink said in an interview on September 30.
“Obviously, if you look at this in absolute terms, China’s innovation output is way larger than Switzerland,” he said. China has a population of 1.4 billion, while Switzerland has a population of around 9 million.
Fink said that it would not make sense to make comparisons between countries such as China and Switzerland in absolute terms, which is why the ranking was adjusted for factors including population and gross domestic product (GDP).
“I think what is important is really the longer-term movement, and I think that has meaning in the case of China,” he said.
China has seen a steady rise through the rankings over the last decade, coming in 29th place in 2015 and moving up to 11th place last year.
The GII was founded in 2007 by Indian academic Soumitra Dutta. Wipo co-published the index along with various academic institutions from 2012 to 2020. In 2021, the GII came under Wipo’s responsibility and is now published in partnership with the Washington-based Portulans Institute.
This year’s GII takes into account 78 indicators, including hi-tech exports, intellectual property filings, venture capital deals, institutional rankings and research and development spending.
The indicators help build a “rich data set” that goes “beyond the traditional measures of innovation since the definition of innovation has broadened”, according to Wipo.
Not all of the indicators address science and technology innovation, as there are also creative innovation indicators, such as national feature films per million population.
“The general approach is that we want to have a broad view of the innovation performance of different economies, and we really look at all the different pillars of the innovation system,” Fink said.
Fink said that whether an economy moved up or down in the ranking in a given year could be a result of both performance changes and methodological changes. He added that around four to five indicators changed each year, though the number of indicators typically remained around 80.
The indicators, used to evaluate nearly 140 world economies, are divided into two sub-indices whose scores are averaged to obtain the final ranking.
The inputs sub-index examines the elements of an economy that enable innovative activities. It is grouped into five “pillars”: institutions, human capital and research, infrastructure, market sophistication and business sophistication.
China ranked 19th in the innovation inputs sub-index overall, with its lowest pillar being institutions, where it came in 44th place. The institutions pillar considers factors such as regulatory quality and government effectiveness.
China ranked sixth in infrastructure, eighth in business sophistication, 13th in market sophistication and 20th in human capital and research.
The outputs sub-index encompasses the results of innovative activities, consisting of only two pillars – knowledge and technology outputs, and creative outputs.
This year, China ranked fifth overall in outputs, taking the top spot for the knowledge and technology pillar and 14th in the creative outputs pillar.
“It overtakes Switzerland in knowledge and technology outputs, ranks second in R&D expenditure, and leads in patent filings,” Wipo said in its GII report.
Some of China’s main innovation strengths include industrial designs, trademarks and patents by origin, while weaknesses include regulatory quality, education spending, and the entertainment and media market, according to the agency.
Fink said that an interesting aspect of China’s innovation was that it was doing better in outputs than inputs, making it an “efficient” innovator.
Switzerland ranked first in the output sub-index and second in the input sub-index, with its lowest pillar being human capital and research in sixth place.
Switzerland’s innovation strengths are in information and communication technology access, the entertainment and media market, government effectiveness, global brand value, and university-industry research and development (R&D) collaboration.
Some of the GII indicators are based on qualitative and potentially subjective data, such as expert scoring, which can introduce “Western-centric” bias in indicators that look at governance or economic models, according to an article published by Shanghai-based news outlet Guancha on September 23.
The report said that while there was value in the index, there were “systematic errors” in the design of some of the indicators, such as the direct relevance of indicators such as the proportion of the population under the age of 24 or the number of overseas students in the country.
A paper by researchers from Xian Jiaotong University published in the peer-reviewed journal Innovation and Green Development in 2023 noted that while the GII provided coverage of important data that was useful for scientific research and decision-making, it was not without its blind spots.
“Although the index methodology considers a variety of innovation dimensions, we know that the innovation process is multifaceted and impossible to faithfully reproduce. There are therefore a variety of blind spots in assessing innovation performance,” the researchers said.
When asked whether the index might favour developed countries such as Switzerland, Fink said that this “bias” was something they wanted to measure.
“Innovation is a phenomenon that does take resources, and high-income economies have more resources at their disposal. So, if you look at the correlation between our GI ranks and GDP per capita, you would see a strong positive correlation,” Fink said.
“What we advise governments around the world is that if you compare yourself, compare yourself to economies in your neighbourhood,” he said, adding that this included geographic neighbours and economies of a similar income scale.
Fink said one thing to keep in mind was that the economy ranking was adjusted in most cases, so although China might rank highest in the world in total scientific publications, when its population is considered, it may no longer take the top spot.
This means that the GII rankings might differ from specialised databases such as the Nature Index, which tracks the high-quality scientific output of different countries based on article count.
In the latest Nature Index released in June, China ranked first in article count, while Switzerland ranked 10th.
Fink said that in relative terms, Switzerland was a “really good innovation performer” with excellent universities and big multinational companies, such as pharmaceutical companies, that invest heavily in research and development.
He added that China’s improvement had been “broad-based”, with the country standing out among other middle-income economies.
“A lot of other middle-income economies have very good scientific institutions and they do well in scientific publications, but they don’t necessarily do well in translating scientific output into technologies that [get] introduced in the marketplace,” he said.
China has seen an overall rise in the rankings over the last few years, with its ranking in the inputs sub-index rising from 26th in 2020 to 19th this year.
While Switzerland continues to dominate the GII, China’s growth rate in indicators such as R&D investment, scientific publications, adoption of electric vehicles and robots, and labour productivity was higher than that of Switzerland.
Fink said that a country’s overall ranking might not capture the improvement it had made from the year before, adding that the index should be thought of as a marathon race.
“Every year you have a winner, you have a silver medallist, you have a bronze medallist, you have someone who ends up on 20th rank and so on,” he said.
“But the whole race could be a lot faster, and everyone participating in the race could improve on his or her time. And that is not captured by the ranking.” — SOUTH CHINA MORNING POST