1. Institutions - measures things like political stability and the business environment, generally considered conducive to growth and innovation.
2. Human capital and research - (hello academia) important for the generation of knowledge; academic research doesn't necessarily translate into innovation, hence a policy focus on tech transfer and knowledge exchange.
3. Infrastructure - general measurement of things like ICT and other resources which enable manufacturing, health, logistics etc.
4. Market sophistication - includes credit markets, financing and capital, facilitates the financial backing of markets for innovation.
5. Business sophistication - a mix of the skills of business people and knowledge absorption, the intangible infrastructure which facilitates the spread of knowledge.
6. Knowledge and technology output - where IP comes in, measurements of patents, publications, spending on computers, exports etc provide an idea of of innovative activity.
7. Creative outputs - more IP with trade marks and measurements of the outputs of the creative industries.
|W. Luker, Jun.|
Readers keen to find their own insights may enjoy the website's cool interactive tool.
|"Manekineko" by Fg2|
Another consideration is that the index introduces the political equivalent of a Key Performance Indicator (KPI) for innovation. Great if you're on top or moving up. But in countries not doing so well, governments may be reconsidering policy.
|Flickr: Clever Cupcakes|