The global economy is not yet back on track towards a broadly shared and vigorous growth momentum. The world’s leading economic institutions predict modest growth for 2016, no significant improvement from 2015, and a slight pick-up of growth in 2017. Growth forecasts for 2015 and 2016 have been revised downwards for all world regions in recent months.
Economic recovery has indeed slowed in most high-income countries, including in the United States of America (USA), Japan, and some European countries. At the same time, low- and middle-income countries now face significantly lower growth perspectives than they did a few years ago. Although economic activity is weakening, Asia as a whole continues to show robust growth despite the slowdown in China.
In turn, growth in Africa, Latin America and the Caribbean, and other world regions has decreased considerably to modest levels. The fall in commodity prices has seriously weakened commodity- dependent economies such as Brazil, the Russian Federation (Russia), Nigeria, South Africa, and countries in the Middle East.
In parallel with the slowed recovery, concerns about disappointing future output growth are increasingly widespread. Today, lower capital and slower productivity growth—particularly as compared with the productivity boom of the late 1990s and early 2000s in high-income economies—are a global phenomenon, throwing into question future growth and improvements in living standards globally. The term ‘productivity crisis’, used to characterize this situation, is now in wide circulation.
As a result, policy makers are urged to move beyond austerity policies, which shrink rather than expand longer-term investments. Stepped-up public investments in innovation would be good for short- term demand stimulus, and also good for raising long-term growth potential. Uncovering new sources of productivity and future growth are now the priority. Fostering innovation-conducive business environments, investing in human capital, and taking advantage of the opportunities that global innovation and cooperation offer are critical in this regard.
The six key findings of GII Chapter 1 are:
The Global Innovation Index (GII) aims to capture the multi-dimensional facets of innovation and provide the tools that can assist in tailoring policies to promote long-term output growth, improved productivity, and job growth. The GII helps to create an environment in which innovation factors are continually evaluated. It provides a key tool and a rich database of detailed metrics for economies, which in 2016 encompassed 128 economies, representing 92.8% of the world’s population and 97.9% of global GDP.
The Global Innovation Index 2016 (GII), in its 9th edition this year, is co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO, an agency of the United Nations). The core of the GII Report consists of a ranking of world economies’ innovation capabilities and results. Over the last nine years, the GII has established itself as a leading reference on innovation. Understanding in more detail the human aspects behind innovation is essential for the design of policies that help promote economic development and richer innovation-prone environments locally. Recognizing the key role of innovation as a driver of economic growth and prosperity, and the need for a broad horizontal vision of innovation applicable to developed and emerging economies, the GII includes indicators that go beyond the traditional measures of innovation such as the level of research and development.