S'pore scores well in some measures but lags in others

[SINGAPORE] Is Singapore ready to stake its claim on the high table as a knowledge-based, innovation-driven, economic power? A recent study seems to suggest it is. In the study which measures the state of innovation in 141 countries, Singapore is ranked No 3, ahead of its Asian peers and even the US.

The 2012 Global Innovation Index (GII) was prepared by business school Insead and the World Intellectual Property Organisation (WIPO), the apex global body for innovation and patent protection.

However, not everything is as clear-cut as the ranking suggests, and a closer examination throws up some interesting points. The GII index has five "input" factors which capture the elements that enable innovation.

Here, Singapore fares very well and is the best in the world.

However, on the output side of the equation, that is, innovation which comes out as result of all the "inputs", Singapore is ranked a less impressive No 11 globally.

More crucially, by another measure - the Innovation Efficiency Index - which is a ratio of "input" and "output" - Singapore comes in at a dismal 83rd.

This would suggest that while Singapore has built a first-class ecosystem to foster innovation, the actual innovation coming out of various labs, research institutions and companies is not commensurate with it.

WIPO's director general, Francis Gurry explains that Singapore's experience is neither an anomaly nor an example of inability to innovate. "I would say it's normal. To a certain extent what the GII index measures is the innovation environment or ecosystem. And I think Singapore has done a wonderful job."

There is usually a fairly long gestation period between the establishment of a good innovation ecosystem - all the elements, both in terms of physical infrastructure as well as proper patent protection laws - and the production and productivity of that system.

"I think that's what is going on in Singapore. It's just a question of time."

Mr Gurry cites the example of Japan. "For a long period of time everybody said Japan was not good in fundamental science despite great infrastructure geared to foster scientific research. It is only now that this view is changing."

The more important question is: Can Singapore afford to ignore the importance of innovation and the need to have good patent protection and IP (intellectual property) laws?

Mr Gurry's response is an empathic "no", since the global economy is moving from one based on physical assets to one based on knowledge. "This is a broad transition and it takes people a lot of time to wrap their heads around this and understand that the real value lies in intangibles and not in physical assets."

However, it's one thing to understand the concept and quite another to have a strategy in place that suits the country's unique position in the global economy.

"We are trying to help countries develop national IP strategies. Every country wants to go up the value chain as no one wants to compete in the space of lowest labour costs."

The WIPO boss describes several ways to position a country in this new knowledge-based economic set-up. "One way is by what is known as 'smart specialisation', which is favoured by many European nations. They are looking to pioneer innovation efforts in areas where they have a natural advantage."

In the case of Asean countries like Singapore, one of the reasons for the region's economic success has been its ability to integrate its manufacturing into various global supply chains, he says.

"I think there is a lot of evidence now to show that global innovation production chains are forming, much like
the current supply chains . . . You will have the knowledge economy equivalent of what we have seen in the manufacturing economy."

What does this entail? Mr Gurry says you might have research located in one area, development in another area, and actual production located in yet another area. "A challenge for Asean countries is to insert themselves into this global innovation chain. Corporations are globally dispersed and globally integrated.

So how do you position your economy to be an attractive investment destination? I think that's a fundamental
challenge that any non-resource based economy has to face."

One basic prerequisite for joining these global innovation chains is strong and transparent IP laws which are in sync with global practices. Another is the right environment for research and development in terms of government policies and infrastructure development, says Mr Gurry.

He concludes that based on these parameters Singapore has done very well and the GII global ranking is justified.