2019 International Innovation Scorecard

Methodology

Eligibility of Countries

The International Innovation Scorecard considers a range of indicators to determine the final roster of countries. The scorecard highlights countries for which:

  • Publicly available, verifiable and independent third-party data exists;

  • Comparable data across nations exists; and

  • Governments can influence public policy.

The 2019 scorecard added 23 countries, which are: Bulgaria, Croatia, Cyprus, Egypt, Estonia, Hungary, Iceland, Indonesia, Kazakhastan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Norway, Romania, Russia, Saudi Arabia, Slovakia, Slovenia, Switzerland, Vietnam.

Categories

Diversity  measures the concentrations of various ethnic groups within a country based on United Nations immigration data, using an adaptation of the Herfindahl-Hirschman Index (a method most commonly used to measure the concentration of corporations within a given industry); and also the ratio of female to male participation in a country’s workforce, among people ages 25-54, drawing on the World Economic Forum’s Global Human Capital Report 2017

Freedom  represents the degree to which a country grants its citizens certain civil and political freedoms. The grades are derived by equally weighting select components of the CATO Institute’s Human Freedom Index (freedom of movement, religion, association, assembly and civil society) and scores from Freedom House’s Freedom in the World 2018

Broadband  measures a country’s total available bandwidth per internet user (in bits per second per user); average fixed and mobile broadband speed; fixed broadband cost per month (as a percentage of gross national income (GNI) per capita, to adjust for the varying levels of income and purchasing power across countries); and pre-paid mobile broadband cost per month for 500 MB data plans (as a percentage of GNI per capita) and 1 GB post-paid data plans (as a percentage of GNI per capita). This category draws on the World Wide Broadband Speed League’s 2018 rankings for broadband speed data, on ITU’s Measuring the Information Society Report 2017, Vol. 2 for broadband costs and on the ITU’s World Telecommunication/ICT Indicators Database (2018) for bandwidth per user metrics. 

Human Capital  evaluates a country’s educated workforce by weighting equally its high-skilled employment (as a percentage of jobs requiring a tertiary degree), based on data from the World Economic Forum’s Human Capital Report 2017 and the percentage of first university degrees it confers in STEM-related disciplines based on data from the National Science Foundation. 

Tax Friendliness  ranks the competitiveness of a country’s tax system based on three indicators: Its top corporate tax rate according to KPMG (35 percent of a country’s grade in the category), its top individual marginal tax rate according to PricewaterhouseCoopers (also 35 percent of its grade), and the imposition of taxes on video streaming services (30 percent of its grade). 

R&D Investment  measures a country’s gross expenditures (regardless of the source of funds) on R&D operations as a percentage of GDP, using data from the Global Entrepreneurship and Development Institute’s Global Innovation Index. 

Entrepreneurial Activity  evaluates the ease of starting a new business in a country based on three indicators, each weighted equally: 1) The Global Entrepreneurship and Development Institute’s Global Entrepreneurship Index; 2) The annual rate of new businesses created per 1,000 people aged 15-64, compiled from World Bank’s “Doing Business: Entrepreneurship” report and demographic data from both the US Census Bureau and the United Nations World Population Prospects: The 2017 Edition; and 3) The ease of starting a business from the World Bank’s “Doing Business: Starting a Business” report.  

Unicorns  calculates the number of “unicorn” businesses — domestic companies that have achieved an actual or implied market valuation of at least US $1 billion — founded within the past decade, per 10 million people in population. This category draws on data from Pitchbook, CB Insights and Crunchbase.  

Resilience  quantifies the degree to which a country’s government and society and sustainable based on two metrics. The first metric uses FM Global’s Resilience Index to measure a country’s business resilience to disruption. The second metric, the United Nations’ e-Government Survey, captures how well a government makes information and resources available to aid the functions of government, improve transparency and connect citizens and stakeholders.  

Drones  assesses a country’s federal laws and regulations on consumer and commercial use of drone technologies. CTA evaluates information from 2017 and 2018 to determine whether a country has: 

  • Permanent rules for commercial drone operations that support innovation and economic growth;  

  • Favorable rules for recreational and hobbyist operators;  

  • An organized and welcoming approach to drone-related research, development and testing; and 

  • Consistent drone policy framework at different levels of government. 

Ridesharing  assesses federal laws and regulations governing ridesharing services. A country fares well if it allows ridesharing services to operate free of burdensome federal, provincial and municipal regulations. 

Self-Driving Vehicles  assesses a country’s federal laws and regulations on self-driving vehicles (SDVs). CTA evaluates whether, as of September 1, 2018, a country allows operation or testing of SDVs and has taken some action to clear the way or encourage their development. 

Short-Term Rentals  assesses a country’s federal laws and regulations affecting short-term rental services. As in the Ridesharing category, a country fares well if it allows housing rental services to operate free of burdensome federal, provincial and municipal regulations. 

Environment  uses World Health Organization data to measure the quality of a country’s air and drinking water.