While the UK remains among the most innovative countries in the world, we have slipped from 3rd to 5th place in the Global Innovation Index (GII).

The GII, a ranking of 127 countries across the world, measures innovation based on a number of detailed metrics which capture Innovation efficiency. The fall in this year’s ranking for the UK could be attributed to the fall in the innovation efficiency ratio Рthe ratio of the Innovation Output over the Input.

The UK has held its place in Innovation Input. Key findings show that the UK has gone up in rank in overall institutions which include political, regulatory and business environment. However, data covers 2015 thus not accounting for Brexit uncertainty and the recent snap election.

Another area of strength is human capital and research, as well as infrastructure, especially ICTs. UK sustains good performance in R&D (although still lagging behind in R&D performed by businesses) and has improved performance in Government online service and E-participation.

Although Innovation Input remains relatively strong, the UK has not been able to demonstrate how this translates into Innovation Output and growth. The GII shows that Knowledge and Technology Outputs and Creative Outputs have fallen dragging the Innovation Output index down.

The fall in Innovation Efficiency Ratio suggests that the UK still falls short of realising its full potential. The data implies that good innovation input does not result in the same (or higher) level of output. Although the fall from 3rd to 5th place is not a dramatic shift, it does highlight some limitations when it comes to converting knowledge into business and economic growth.

The other main index of innovation at the national level is the Bloomberg ranking of the world’s 50 Most Innovative Economies. The UK remains static at 17th place in the 2017 version of this list.

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