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The Rupp Report: Switzerland On Top In Innovation

Jürg Rupp, Executive Editor

Sometimes it's not easy to be Swiss, like the author of the Rupp Report: The whole world has been jumping on the country for decades. Misconceptions such as "all the Swiss are rich," and many other odd stories are circling the globe. Switzerland is accused of being a harbor for bad money, the secret bank — which is falling to pieces right now — and so on.

However, there have also been some encouraging stories about the tiny alpine country with 7 million people - for example, when the Alinghi won the America's Cup, or Roger Federer was the world's number-one tennis player for a long time. These times are past - at least for the moment.

But now another nice message has hit Switzerland: The country is the world champion in innovation. It jumped from fourth place last year to the top in 2011. And this is no joke: The comparative study, titled "The Global Innovation Index 2011," was made by INSEAD, a France-based business school and research institution; together with the Geneva-based World Intellectual Property Organization (WIPO); the Confederation of Indian Industry, France; as well as the companies Paris-based telecom conglomerate Alcatel-Lucent and global management consulting firm Booz & Co.

Annual SurveyThe survey is conducted every year in more than 100 countries to measure innovation among the respective national economies. "Innovation is central to economic growth and to the creation of new and better jobs," said WIPO Director General Francis Gurry.

RuppChart7-26

The table above shows Switzerland comes first in the list for 2011, followed by Sweden and Singapore. The Swiss moved to the top within two years from seventh place. On the other hand, the United States dropped from first place down to seventh within two years. In ranking Switzerland at the top, the authors of the study explained that the country demonstrates excellent values both at the input side — those factors which favor the development of new or enhanced products, production and proceedings — as well as at the output side of their innovation climate.

Seven Pillars

Eighty measurable variables within five input and two output pillars are used in the calculation of the index. From the input side, criteria include institutional framework conditions like political stability, rule of law and/or the period and the expenditures required to form a company. Human capital is expressed, for example, in the costs for education, its quality, the share of highly educated people as well as in the effort for research and development. Infrastructure forms the third pillar. In the fourth and fifth pillars, market and business sophistication are taken into consideration. On the output side, the number of new scientific findings and inventions as well as the distribution of this knowledge provides evidence about the power of innovation as well as the creative performances of a country.

The report mentions that Switzerland stands at the top of the list thanks to its political stability, the high expenditures in the private sector for research and development, the high share of employees who boost the knowledge in the enterprises, and the large number of patents and scientific publications. Also rated at a higher level are the very good access to information and communication networks and the quality of the trade and the transportation system.

Don't Sleep, Carry On
However, Switzerland and the other five European countries in the top 10 should not be too complacent. "Innovation has become a global phenomenon and takes place not only in the countries of the OECD [Organisation for Economic Co-operation and Development]," mentioned INSEAD Professor Soumitra Dutta. He noted that countries like Brazil, India and China are already making great efforts to occupy a top place in the ranking.

So, for once, the Swiss can be proud of their country and get over it that Roger Federer is at the moment "only" number three in the rankings of the top tennis players. Two years ago, Switzerland as an innovative country was only number seven, and now? This brings to mind advice many may have received in earlier days: "Don't talk about how to do better, just do it."

July 26, 2011

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