By Kim Jae-kyoung
Staff Reporter
Korea ranked second among 110 countries in the global innovation index measuring business outcomes of innovation and governments' ability to encourage and support innovation through public policy, according to the Boston Consulting Group (BCG).
In a report produced jointly by the BCG, the (U.S.) National Association of Manufacturers (NAM) and the Manufacturing Institute (MI), Korea came second in the international innovation index, just behind Singapore.
The report looks at a host of new policy indicators for innovation, including tax incentives and policies for immigration, education and intellectual property.
Among the top 20 countries in terms of GDP, Korea secured the first position in the innovation index, followed by the U.S., Japan, Sweden, the Netherlands and Canada.
``The outcome is the result of Korean firms' seamless efforts toward innovation. In particular, of the two key aspects ― input and output, growth in output sectors, such as the number of world top products, a rise in exports and improvement in productivity greatly affected the result,'' a BCG Seoul consultant said.
``However, given Korea is only slightly ahead of other countries and it was the outcome of 2008 when advanced economies entered recession, Korea needs to check the performance of its manufacturing industry on a regular basis and put more efforts on providing policy support to the input sector,'' he added.
The report cites four critical factors that lead to innovation success ― idea generation, structured processes, leadership, and skilled workers ― and stresses that government must support these efforts through effective policies.
``In today's global economy, innovation is critical,'' said co-author James P. Andrew, a BCG senior partner and global leader of the firm's innovation activities.
``The emergence of challengers from rapidly developing economies such as India and China has transformed the playing field. With high-quality, inexpensive products flooding the market from every corner of the globe, competing on cost alone is a losing battle for most U.S.-based manufacturers,'' he said.
The study comprised a survey of more than 1,000 senior executives from leading U.S. companies across all industries and a comparison of the ``innovation friendliness'' of 110 countries.