The Global Innovation Index (GII) will be reported tomorrow, and it will mark analysis of different factors that contribute to it, with our focus on Asia we wanted to examine the role of innovation policies and the impact they have on GII rankings in Asia.
In the last, two to three decades, the importance of innovation to economic performance and problem-solving has been a growing priority for policymakers. Innovation policy is defined as government intervention that includes measures, programs, incentives, and other instruments aimed at supporting the creation and diffusion of innovations. It entails the interaction, articulation, and coordination of a number of implicit and explicit policies within a complex environment. Designing an innovation policy necessitates ongoing policy learning. Broadly there are three categories of Innovation policy: Mission-oriented, Invention-oriented, and System-oriented policies.
It is well acknowledged that intellectual property (IP) plays a vital role in achieving national and regional socioeconomic development goals. The Max Planck Institute for Innovation and Competition has long realised the value of understanding Asian intellectual property law. The Institute has released 17 volumes in its Series on Asian Intellectual Property Law since its initial investigations in the 1990s. Asia is located primarily in the eastern and northern hemispheres. It is the biggest and most populated continent, making up 30% of the Earth's landmass and nearly 60% of the world's population.
The main economies of Asia have established national IP plans to advance the value and commercialization of IP, led by Japan in 2003. A National IP Strategy, for instance, was approved by China in 2008. India's National IPR Policy was announced in 2016, while Korea has two Master Plans for National IP (2012-2016 and 2017-2021) under its belt. A 20-year IP Roadmap was released by the Thailand government in 2017, and a National IP Policy Committee was created in 2009. Bypassing the IP Basic Act (2002), followed by the Korean Framework Act on IP, Japan has formalized its national intellectual property policy.
Based on income level and market size the Asian countries are grouped into four categories:
1) High-income countries: Japan and the Republic of Korea
Japan is the first Asian nation to successfully industrialise and catch up to developed nations, and it is the third-largest economy in the world. By spending money on R&D, Japan has made its place among the countries with the highest Science, technology, and innovation investments. Japan places a strong emphasis on fostering equitable and sustainable growth, in order to respond to the challenges of digitalisation. A shift from technology-driven innovation policy to society focused and challenge-driven policy.
In the last 5 decades the Republic of Korea, input and production of innovations as well as economic growth all grew dramatically. Since the middle of the 1980s, the Republic of Korea has been spending less on government R&D and more on private R&D and has also emerged as a nation where businesses drive innovation. The investment was 22:78 (2017). The Republic of Korea could not contemplate innovation or Science and Technology (S&T) initiatives during the pre-industrialisation era due to the urgent need to solve the enormous commodities scarcity and the post-war reconstruction. S&T- oriented policies grew to include Science, Technology, and Innovation policies and the notion of innovation as a result of S&T during the post-catch-up phase. Innovation policies have begun to take shape recently in response to social issues and S&T concerns.
In the Global Innovation Index, 2021: Japan and the Republic of Korea both are placed among the high-income group countries that have performed above expectations for the level of development. Japan ranks 13th and the Republic of Korea ranks 5th in the index. Japan and the Republic of Korea’s GDPs are US$ 4,937 billion and US$ 1799 billion respectively.
2) Big-market countries: India and China
India's economy has risen quickly to become the fifth biggest in the world. Since the 1990s, India's innovation output has significantly improved, but the nation still faces numerous challenges before it can be categorised as an upper-middle-income nation. Residents only file one-third as many patent applications as nonresidents do. Foreign corporations or individuals have had a significant role in Indian innovation. Public institutions have continued to dominate India's R&D efforts, as a result, public R&D spending is larger than private R&D spending with a ratio of 56:44 (2015).
India constructed a large number of public research institutes and labs between 1947 and 1955, as well as the political infrastructure necessary to integrate S&T into the country's development strategy. India, however, was unable to connect S&T with its growth strategy. Since 1956 four new S&T policy statements have been released by India. First released the Science and Technology Policy (STP) in 2003, followed by the Science, Technology, and Innovation Policy (STIP) in 2013. The Science Policy Resolution (SPR) in 1958. A science-oriented, technology-oriented, science-industry synergy-oriented and innovation-driven policy period resulted from four policy pronouncements that were successively implemented in India.
China is expected to overtake the US in terms of GDP by 2030. China is only behind the US in terms of overall spending but spends more on research and development than Japan, Germany, and the ROK put together. About 20% of all R&D expenditures worldwide in 2016 came from China. The country has tried to increase the contribution of business firms to advancing innovation in terms of the source of R&D financing. Regarding R&D financing, China has attempted to strengthen the role of corporate companies in advancing innovation. Since 1997, direct government support for R&D spending is dropping whereas private sector contributions to R&D spending have increased. The ratio was 20:76 (2016).
For the purpose of luring FDI and covering the shortage of capital and technology, the country developed a catch-up strategy based on its sizeable domestic market. China stressed its strategy of encouraging innovation and exports by homegrown businesses once they had successfully shifted to a market economy. India has performed well over the last five years by consolidating the innovation policy as a pillar of economic growth. India ranks 46th and China ranks 12th in the index India has a GDP of US$ 3173 billion whereas China is 2nd the largest economy with a GDP of US$ 17734 billion.
3) Middle and upper-middle income countries: Indonesia, Thailand, and Malaysia
Since the 1970s, Thailand has excelled in several areas, becoming Southeast Asia's second-largest upper-middle-income nation. There have been significant transfers of manpower and money from agriculture to industry and services. Agriculture is still a key sector of the economy. The ratio of public and private R&D spending was 24:76. (2016). in 2016, high-technology exports made up 21.5% of all manufactured exports.
In 1980s, Thailand saw growth that was driven by exports. To avoid falling into the middle-income trap, a focused innovation policy was formed in the 2000s. Thailand now has a strategy that focuses on increasing productivity without becoming enmeshed in quantitative inputs of labor and capital.
Indonesia’s R&D expenditure for the public and private sectors was 84.5:14.7 (2001-2006). Similarly to India, the number of patent applications filed by nonresidents in Indonesia was much higher than that of residents in 2017. It presents a seriously poor performance in innovation input and output. Indonesia had difficult economic growth as a result of political insecurity and ineffective economic policy. Except for human resource development, it could not afford to pay attention to S&T plans. From 1967 until the present, Indonesia's innovation policy established the legislative basis for numerous growth strategies.
Similar to Indonesia and India, Malaysia has five times as many non-resident patent applications as resident ones. By 1994, private sector R&D investment had surpassed that of the public and private sectors, the ratio of public-private spending was 35.6:74.5 (2012). Malaysia's innovation-related activities are heavily reliant on international firms or foreign people. From 1971 to the present, the first phase is the New Economic Policy (NEP)-driven policy in which R&D plans were accessible if required; but, autonomous S&T policies did not exist. STI-driven policy (1986-present), established the First National Science and Technology Policy and included a distinct chapter on science and technology for Malaysia.
In the Global Innovation Index, 2021: Thailand is placed among high-income groups and has performed above expectations for the level of development whereas Malaysia and Indonesia are placed among the upper-middle-income group and have performed in line with the level of development. Thailand, Malaysia, and Indonesia rank, 43rd, 36th, and 87th respectively in the index.
Thailand has a GDP of US$ 506 billion whereas Malaysia and Indonesia have a GDP of US$ 373 billion and US$1186 billion respectively.
4) Low-income countries: Bangladesh
After the formation of Bangladesh in 1971, the country implemented various initiatives for innovation policies even in highly uncertain political environments. The political unrest in Bangladesh prevented the country's innovation initiatives from having a significant impact. The government has launched a coordinated strategy to encourage citizen-centric innovative services through technology innovation.
In the Global Innovation Index, 2021: Bangladesh is placed among the “lower middle-income group”. Bangladesh ranks 116 in the index and has a GDP of US $416 billion.
As per Global Innovation Index, 2021 the innovation performance of South East Asia, East Asia, and Oceania (SEAO) region has been the most dynamic in the past decade, closing the gap with Northern America and Europe. Five SEAO economies are world innovation leaders: the Republic of Korea (5th), Singapore (8th ), China (12th ), Japan (13th), and Hong Kong, China (14th ). Among these leaders, China, the Republic of Korea, and Japan have made the greatest advances up the rankings in the past 10 years.
In Central and Southern Asia, India leads in 46th position, having consistently risen up the ranks since 2015, when it ranked 81st. The GII report for this year is likely to see a rise.
