Singapore, HK shining as centres of excellence

The Asian hubs rank just behind Switzerland in the Global Innovation Index and lead the pack in terms of sub-categories – underlining their financial and economic development.
Singapore, HK shining as centres of excellence

The Global Innovation Index 2011 published by international business school Insead shows Switzerland, Singapore and Hong Kong among the leading world centres of business and wealth creation opportunity, notes Scorpio Partnership.

In the fourth edition of the annual index, Switzerland jumped into top slot from fourth last year, while Singapore also shot up four places to third, leap-frogging Hong Kong, which fell from third to fourth.

Sweden retained its second-placed ranking, while the big loser was Iceland, which dropped from first to 11th (in 2009 it placed 20th).

The index, which broadly measures how well an economy supports innovation, ranked 125 countries this year. It measures a host of political, regulatory, business, infrastructure, human resource and technology factors to judge if a country has the necessary “inputs” for innovation. It also considers scientific and creative “outputs” as a measure of innovation.

In other words, the index provides a good guide to whether an economy has what it takes to support wealth growth.

Switzerland this year proved a good all-rounder, with solid results for both input and output factors. Singapore, meanwhile, shot the lights out for all of the headline input factors – ranking first in all categories – but had weaker performance in the output categories.

By contrast, the US and the UK reached only 7th and 10th positions, respectively, in the overall innovation rankings.

The results are useful to compare not just how different economies are performing to support home-grown wealth creation. They are also a notable indicator for their effectiveness as international financial centres.

Indeed, among the many sub-variables, investment factors and regulatory factors feature as specific sub-categories of overall innovation.

The investment factors taken into consideration are the strength of investor protection, market capitalisation, the total value of stocks traded and the number of venture-capital deals. The regulatory environment, meanwhile, is judged according to regulatory quality, rule of law and the rigidity of employment.

Based on these two sub-categories alone, Singapore, Hong Kong, the US, UK and Switzerland dominate – with the pack notably led by Singapore and Hong Kong (see table).

These findings point to the successful efforts by Singapore in particular, but also Hong Kong, to develop not just as international financial centres, but as centres of global economic excellence.

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