Hong Kong has fallen out of the top ten in the 2015 Global Innovation Index, an annual study conducted by leading business schools and the World Intellectual Property Organisation (WIPO).
The research ranked Hong Kong at 11th place out of 141 countries and economies, higher than some leading advanced economies such as Germany, Canada, Australia and Japan, but lower than regional rival Singapore.
Hong Kong’s ranking has risen and fallen in recent years, but it was in the top ten from 2012 to 2014, ranked at 8th, 7th and 10th places respectively.
Despite the overall decrease in its ranking, Hong Kong did well in some performance indices, namely regulatory quality, GDP per unit of energy use, the availability of domestic credit to the private sector, protection of investors, how easily start-ups and other companies can be capitalized, the intensity of local competition, and high-tech imports.
Hong Kong saw its biggest drop this year in business sophistication, mainly as a result of its performance in the percentage of females employed with advanced degrees.
The weaknesses in Hong Kong’s performance highlighted in the report include the relatively low expenditure on education, and exports of creative and high-tech goods.
In a development that increased Singapore’s ranking in terms of its political environment, the press freedom index was deleted from the framework of the research this year. The authors of the study said they are currently searching for a better variable to capture the openness of an economy to innovation.
The research was conducted by the Johnson business school of Cornell University, INSEAD, and the World Intellectual Property Organisation. It ranked countries and economies using 79 indicators to gauge both innovative capabilities and measurable results. Innovation indicators are divided into those concerned with inputs, such as human capital and research, infrastructure and market sophistication, and innovation outputs in terms of knowledge and technology. The final ranking is a ratio of the inputs and outputs, and is therefore a measure of how well an economy utilises its inputs.