Japan rated tops for innovation

LONDON (Kyodo) Japan is the world’s most innovative nation, according to a recent study by the business information arm of the Economist magazine.

Defining innovation as “the application of knowledge in a novel way, primarily for economic benefit,” the study ranks Japan, Switzerland, the United States and Sweden as the top four innovators among the 82 economies observed from 2002 to 2006 by the Economist Intelligence Unit.

The number of patents a country generates per million people was deemed to be the most appropriate measure of innovation.

“Because Japan’s population is only 42 percent of that of the U.S., its ratio of patents per million population is 3.5 times higher than the United States — and indeed the highest such ratio of all,” a report on the study states.

Despite having a lower ranking in the “direct factors” that drive innovation, such as telecommunications infrastructure, and a still lower ranking in the index measuring environmental factors conducive to innovation, Japan still managed to top the list.

Reasons given for this apparent anomaly include the Japanese economy’s large proportion of high-technology activities that are often “more innovation-intensive.”

“This resource-poor economy has long taken an ‘innovate or die’ approach,” the report says, highlighting the symbiotic relationship between many large companies and associated smaller firms.

Other factors include proportionately greater investment in research and development than the United States and most other major countries, and the benefit of more scientific researchers per million people.

For 2007 to 2011, the study predicts that all four leading innovators will retain their rankings, but that China, which has already overtaken Japan to become the world’s second-largest investor after the United States in research and development in absolute terms, is a country to watch in terms of acceleration in the innovation market.

Despite efforts to boost its innovation performance, the EU is unlikely to close the “innovation gap” with Japan and the U.S. over the next five years, the report says.

Even though Japan’s innovation output surpassed those of all the other countries, a majority of 485 senior global executives taking an Economist survey cited the U.S. as by far the best place for innovation.

“The common view among executives is that Japan is not the most conducive place to innovate,” the report says, noting that only 2 percent of respondents saw it as having the best conditions for innovation, compared with 40 percent for the U.S. and 12 percent for the second-place country, India.