Innovation and indexes

The 2013 Global Innovation Index is out, with writeups in Scientific American and the NZ internets, but not this year in the NZ press. Stuff, instead, tells us “Low worker engagement holds NZ back”, quoting Gallup’s ’employee engagement’ figure of 23% for NZ, without much attempt to compare to other countries.

The two international rankings are very different: of the 16 countries above us in the Global Innovation Index, 13 have significantly lower employee engagement ratings, one (Denmark) is about the same, and one (USA) is higher (one, Hong Kong, is missing because Gallup lumps it in with the rest of the PRC).  It’s also important to consider what is behind these ratings. If you search on  “Gallup employee engagement”, you get results mostly focused on Gallup’s consulting services — getting you to worry about employee engagement is one of the ways they make money.  The Global Innovation Index, on the other hand, came from a business school and was initially sponsored by the Confederation of Indian Industry  and has now expanded with wider sponsorship and academic involvement: it’s not biased in any way that’s obviously relevant to New Zealand.

With any complicated scoring system, different countries will do well on different components of the score.  If you believe, with the authors of Why Nations Fail,  that quality of institutions is the most important factor, you might focus on the “Institutions” component of the innovation index, where New Zealand is in third place. If you’re AMP econonomist Bevan Graham you might think the ‘business sophistication’ component is more important and note that NZ falls to 28th.

If you want NZ innovation to improve, the reverse approach might be more helpful: look at where NZ ranks poorly, and see if these are things we want to change (innovation isn’t everything) and how we might change them.