Innovation nation? Australia tumbles to 23rd place in a benchmark index of global innovation

Global Innovation Index 2017 – top 25 countries. (Source: GII)

Australia has slipped several notches on measures of innovation development in the past year, falling four places to 23rd spot on a prominent global index.

Cornell University, the United Nations’ World Intellectual Property Organisation, and Insead released their annual Global Innovation Index report on Thursday. Its rankings are based on an analysis of a country’s “inputs” into the innovation sector – such as “institutions, human capital and research, infrastructure, market sophistication and business sophistication” — and “outputs” from the startup industry, measured on knowledge and technology and creative metrics.

The worry for Australia seems to be the output side – the nation came 30th on that subindex, compared to a respectable 12th for input – suggesting the supporting environment for innovation is good but the results aren’t matching the investments.

Global Innovation Index 2017 – Australia. (Source: GII)

Australia is a world leader in human capital, ranking 1st in “school life expectancy”, 3rd in tertiary enrolment and 7th in university rankings. The country also did well on infrastructure, especially government online service (2nd) and “e-participation” (2nd), and market sophistication. It ranked 5th in “ease of getting credit” and 6th for intensity of local competition.

“This report is another call to arms around innovation,” said Tech Sydney chief Dean McEvoy.

“The Australian government’s recent focus on commercialising IP out of bodies such as CSIRO has been a positive move. [But] clearly it’s not enough. We need to develop a model which co-exists alongside the CSIRO style model and offers similar support for the more market-led, high growth tech startups.”

StartupAUS data and insights head Alex Gruszka remains upbeat about Australia’s place in the startup world.

“The GII measures many metrics that are tangential to startup activity — hence why Israel is 17th and the US is only 4th,” he told Business Insider.

“Australia slipping four places is less a sign of a lack of progress as it is the surge in education, research and development and patent creation of our peer countries. These are factors we should look to address to maintain our competitiveness on the global stage.”

Global Innovation Index 2017 – Asia. (Source: GII)

Globally, Switzerland led the world for the 7th consecutive year while Sweden backed up its runners-up position last year. Singapore (7th) and South Korea (11th) topped the rankings in Asia region, which includes Australia.

McEvoy said that the index’s emphasis on patents could be misleading.

“The reality is, if you look at the biggest four companies in the world right now — Apple, Google, Facebook and Amazon — the value of their IP is not locked up in patents. These high growth companies don’t start with IP and patents, they start with highly motivated people looking to solve a problem in the world and nimbly developing tech solutions around that.”

The Global Innovation Index is now in its 10th year, with 127 countries analysed for the latest report. The work was audited by Joint Research Centre of the European Commission.

Now read: A South Korean startup is only hiring people aged over 55

NOW WATCH: Tech Insider videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.