Identifying enablers of innovation in developed economies: A National Innovation Systems approach

Abstract

It has been recognized that innovation drives the long-run economic growth of nations and increasingly governments are placing innovation at the center of their economic growth strategies. International variation in the investment on innovation presents an opportunity to examine key enablers of innovation-driving policy choices. Countries find themselves at different stages of economic development and innovation performance and so their relative levels of innovation inputs and outputs are likely to be different. In this study we employ a systems of innovation approach to examine what enables improvements in innovation potential among developed countries. Using data from the 2017 Global Innovation Index (GII) Report, we subjected 770 data measures to an analysis of 242 relationships involving changes in the GII’s innovation inputs/outputs scores and overall innovation potential of 35 OECD countries over a five year period (2012 to 2016). Our findings suggest that instituting policies that improve access to open and competitive markets is the most significant enabler for raising a developed country’s innovation potential.