Trevor Little

The Global Innovation Index 2017 has revealed the world’s most innovative countries. While the top 10 is comprised of the same jurisdictions as last year, high innovation performance among Sub-Saharan African countries, relative to development, is a notable trend. However, given the reports wide scope, the specific trademark lessons are limited.

The index, co-authored by Cornell University, INSEAD and the World Intellectual Property Organisation (WIPO), surveys 130 economies using a variety of metrics ranging from patent filings to education spending. Overall the picture is relatively unchanged. As WIPO director general Francis Gurry noted at today’s launch: “There is stability in the top 25 – and Switzerland is the gold medallist for the seventh year running.” The top ten (with last year’s position in brackets) is as follows:

  1. Switzerland (1 in 2016)
  2. Sweden (2)
  3. Netherlands (9)
  4. United States of America (4)
  5. United Kingdom (3)
  6. Denmark (8)
  7. Singapore (6)
  8. Finland (5)
  9. Germany (10)
  10. Ireland (7)

High income economies dominate the top 25 – filling 24 positions. The exception is middle-income economy China in 22nd place (having broken into the top 25 last year). However, the notable trend this year comes from middle and lower-income economies. Of the 17 economies identified as ‘innovation achievers’, over half come from the Sub-Saharan Africa region: Burundi, Kenya, Madagascar, Malawi, Mozambique, Rwanda, Senegal, Uganda and the United Republic of Tanzania.

The positive innovation performance of Sub-Saharan Africa, which the report labels “the most promising region”, derives from a number of factors. These include business sophistication, investment in infrastructure and research activities. Brands have also been a contributor. In terms of the agri-food value chain in Africa, the branding and marketing of value-added agri-food are identified as a key component to success. In Uganda, for example, the report notes that the effective use of trademarks are a factor in “improved branding and longer-term investments in innovation”, with trademarks emerging as “the preferred form of protection in the [country’s] agricultural and food and beverage sectors”.

Where some other countries are perceived to have ranked lower than might be expected (for example China remains outside the top 20, while the US remains in fourth place) this is explainable by the methodology. As noted, the 463 page study draws on dozens of metrics to calculate how innovative a country is deemed. These span the political and regulatory environment, human capital and research, investment levels, trade and competition patterns, ecological sustainability, online creativity (including Wikipedia activity and video uploads on YouTube) and software spend, amongst many others. It is the need to perform across an array of metrics that explains why some countries that are usually characterised as innovation leaders don’t rank as highly as might be expected. It is also why the overall rankings doesn’t really indicate provide a complete picture with respect the relationship between innovation and trademarks.

Trademark applications by origin are included as a contributing metrics. Again, though, the ‘ranking’ throws up some surprising leaders. In terms of trademark innovation, the precise metric is “the number of trademark applications issued to residents at a given national or regional office (per billion PPP$ GDP)”. The leader, then, is identified as Mongolia, followed by Paraguay and Moldova. Trademark application powerhouse China occupies fourth spot, with Luxembourg in fifth.  The US is some way behind in 81st position.

However, whether – in terms of trademarks – the US is less ‘innovative’ than Cambodia, Algeria, Pakistan and Albania (the five countries ranked immediately above it) can’t really be judged by a straight examination of trademarks to GDP levels. Many factors could impact that – for example, a registration drive by the Luxembourg office amongst its half a million population would have a greater impact on the overall statistics than the equivalent by, say, India amongst its 1.3 billion population. It does suggest a ‘propensity’ of a country’s residents to use trademarks but brand innovation is so much more than that. The research does not delve into trademark use or the creation of brand value.

In addition, even if this was the ultimate metric, the dataset arguably doesn’t tell the whole story. We noted, when reporting on the 2015 version of the research, that European trademarks are not incorporated. It appears that this is still the case. In 2015, Germany led the way in terms of European trademark applications and it could be that many German businesses are utilising these rights rather than those granted nationally. If so, perhaps their inclusion would have led to a higher placing (Germany ranked 28th). 

Ultimately, the way datasets are compiled and weighted will have an impact on the results. And this isn’t a criticism of The Global Innovation Index 2017. The study provides research evidencing innovation across a wide range of datasets – it does not purport to provide extensive analysis of the link between trademarks and innovation, and brands are not the central focus.

However, evidencing such a link is important. It is also extremely challenging as ultimately it requires both a macro and micro approach. Research into the propensity of a country’s residents to use trademarks is certainly one aspect (and as noted earlier, the Global Innovation Index does provide examples where canny brand strategies contribute to corporate and industry development), as are studies into the link between trademark use and economic output. Another metric is to look at the link between trademarks and innovation at a company level (last year, for example, we presented analysis of the trademark patterns of the top R&D-driven innovators).

It may be that a definitive study evidencing the link between trademarks and innovation remains elusive. In the meantime, any data sets that can help provide insight into the bigger picture are to be welcomed. They just need to be assessed as part of that picture, not necessarily indicative of the entire reality. 

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