The Economics and Econometrics of Global Innovation Index

The Economics and Econometrics of Global Innovation Index

Badar Alam Iqbal (Monarch University, Switzerland) and Mohd Nayyer Rahman (Aligarh Muslim University, India)
DOI: 10.4018/978-1-5225-9273-0.ch066

Abstract

Innovation is understood by different people differently and there is no reason to think otherwise until and unless innovation is objectified. Several measures have been developed to represent innovation in one or the other form. At times, due to dearth of data on innovation, proxies are used that may not represent innovation in its true sense. One of such measure, though unpopular but relevant, is global innovation index (GII). Indexes are used to quantify as well as measure the variability over a period of time in comparison to base values. As the approach of GII is new and promising, the present chapter will attempt to understand the economics of global innovation index for the available data. This will add to the understanding of innovation and may act as a strategy. On the other hand, econometrics as an emerging branch will also be used to identify certain simple hypothesis for the data of global innovation index. The chapter thus aims to delve deeper into the understanding of global innovation index.
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Review Of Literature

There is no dearth of studies conducted on innovation. There is a generally accepted notion that innovation leads to economic growth (Romer, 1990; Bilbao-Osorio and Rodríguez-Pose, 2004; Harris, 2011; Nunes et al., 2012). It includes from a micro perspective, macro perspective, from technological viewpoint et cetera. Studies have attempted to objectively identify implications of innovation on different micro and macro variables as well. However, few innovation indices has been popularized as well as accepted globally. The list of such indices includes International Innovation Index (produced jointly by the Boston Consulting Group, the National Association of Manufacturers and The Manufacturing Institute), Global Innovation Index (GII) and Bloomberg Innovation Index. Not much have been discussed about the indices except quoting the rankings as a passer-by.

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