Ukraine’s place in the global battle for innovation

On February 11, 1990, ordinary boxer James Douglas did the incredible – knocked out Mike Tyson, who was considered the best heavyweight in history.

James became the undisputed world champion, but in the next fight he lost to Evander Holyfield. After that, Douglas never again participated in championship fights and did not get on the editorials of the specialized media.

How does this story relate to innovation?

Every year, analysts at Cornell University, INSEAD Business School and the World Intellectual Property Organization released a report on how innovations are introduced in different countries, which factors contribute to their adoption and which hinder.

A new, thirteenth version of the Index has recently been released. It includes information on 131 countries, including Ukraine.

For us, this document is important because on its basis investors will make decisions about whether to invest in the development of innovative technologies in our country or not.

Forward or in place?

For the year in the Global Innovation Index Ukraine has moved up two points – from 47 to 45 place. In order to assess whether this is a lot or a little, you need to understand one simple thing: to be innovative is costly, difficult and risky.

A bet on innovation may or may not work. Therefore, most entrepreneurs work the old fashioned way without trying to change their approach to doing business. Just like James Douglas.

In training, James worked half-heartedly and did not want to change anything, because the championship still did not shine for him. He went to the fight with Tyson as an underdog with a ratio of 42 to one.

Everyone, including Douglas, understood that the second time he could not jump above his head, so in the fight with Holyfield, James simply sold his belts profitably.

Most startups use the same strategy today. Offering an innovative concept, they don’t even get to creating a working product and just wait for big companies to buy them. After the purchase, no one remembers projects like Douglas.

Constant effort

Another extremely important point. Innovation loves stability. It is impossible to stop introducing new solutions and continue to be an innovative company.

Let’s take a look at the top 50 most innovative companies in the world from the Boston Consulting Group – one of the most influential consulting firms in the world. The rotation in the BCG rankings is crazy.

You have probably heard about the American company Stryker, the largest manufacturer of medical equipment. Last year, Stryker was included in the BCG rating, but this year it is no longer there. The statistics are relentless: of the world’s 50 most innovative companies, only eight will make the BCG list next year. The rest will not survive the innovation race and will be out of the ranking.

The same trend can be observed by examining the Global Innovation Index. Many countries cannot keep the achieved positions and already next year show serious deterioration in performance. Tajikistan dropped nine positions in the new Index, Georgia – 15, Kuwait – 18.

In comparison with them, Ukraine looks very stable. Over the past four years, our country has never dropped out of the top 50, although in 2019 we dropped by four points. So the current growth is rather a gradual return to 43rd place, which Ukraine occupied in 2018.

Yes, we are far from being the leaders, but in our consistency we still favorably differ from the one-time champion Douglas. However, the final place in the GII ranking is not the only indicator worth paying attention to.

Good news

Take a look at the investment versus value for innovation.

It turns out that we do not spend much money on innovation – according to this indicator, Ukraine took 71st place.

But there are results even from such a volume of investments: in the ranking of countries that have received the greatest profit from the use of innovative solutions, we occupy the 37th line.

Another important point is the relationship between the volume of innovation and economic performance. The development of the Ukrainian economy is ahead of expectations, experts summarize. But the indicators of more economically developed countries like the UAE, Brunei, Qatar, Saudi Arabia and Lithuania, on the contrary, do not correspond to forecasts.

Ukraine can continue to advance in the GII ranking. We have many competitive advantages listed in the “Strengths” section. These are excellently trained personnel, the prestige of higher education, a large number of employees with scientific degrees, and the growing export of information and communication technologies.

Leadership cut

Will we be able to repeat the success of India, which jumped 4 places this year? Hard to tell. Indeed, in addition to the strengths, there are also weaknesses: an unstable political situation, the absence of the rule of law, a low level of funding for innovative programs, including venture funds.

Anyone who has planned to implement advanced technology will face difficult times. Due to the economic crisis caused by the COVID-19 pandemic, a huge number of research projects around the world have been frozen, and the total funds allocated for the implementation of innovative solutions have dropped to record lows.

Despite this, the mood of the rating compilers can be described as low-key optimism.

Since the introduction of innovations has become part of the corporate strategy of the world’s largest companies and government programs for economic development, it is hoped that the crisis in the field of innovation will not be so deep and protracted.

As for Ukraine, we will face a serious struggle for the honorable second place in the group of countries with lower middle income (Vietnam is now in first). The global innovation landscape has changed dramatically in recent years, with China, Vietnam, India and the Philippines now showing the highest rates of innovation adoption.

The last two countries in the group ranking are right behind us. So next year we will most likely witness an exciting competition.