Developed nations take justifiable pride in their history of innovation: they have served as the world’s biggest experiment in democratic capitalism, created the transistor and unlocked the human genome. Yet they have not cemented a lock on global economic leadership and they continually look over their shoulders at the fierce competition in the field. 

 

They see emerging nations with limited legacy infrastructures developing specific innovation strategies with great success:  China’s GDP is up 9.4% this year while India and Russia have grown 7% and 5.2% respectively.  Meanwhile, growth in the developed world ranges from 1.3% in the European region to 3.6% in the United States. Change is clearly afoot.

 

Innovation-fuelled productivity may be the wellspring of this success, but a strong innovation history is no guarantee that nations will be as innovative in this century as they were in the last.

 

In fact, current trends suggest otherwise. For the first time ever, in 2003 the country that attracted the greatest foreign investment without being among the world’s developed nations was China.

 

Today, national economies are moving into a new era, underpinned by cyberinfrastructure, a new architecture of computing and the new business models they enable.

 

The essential ideas about networked organisations and the global economy are clearly taking hold, and have enabled many more countries to play the innovation game. These hungry new players are modelling their plans on the successes and best practices of the developed world. Yet in emerging markets, lower labour or manufacturing costs and aggressive investments in education have effectively changed the rules of that game. 

 

Seizing the opportunities in this new game demands unique foresight and capability, and nations must choose carefully. Investment, talent and infrastructure are increasing everywhere, making the world more tightly integrated. On a networked planet, there is little to prevent knowledge, discovery and opportunity from flowing to whatever environments are most fertile and hospitable.

 

Nations must take a hard look at their options in this new, more challenging environment and create the right atmosphere and legal framework for growth. Achieving innovation success is complex. Traditional strategies focus primarily on invention. Investment in research is used to both create new knowledge and build skills in students and workforces.

 

Research investment will always be critical. Most promising is a research strategy that brings these unique disciplines together in a collaborative, multidisciplinary way to enable new linkages, as has occurred in bioengineering.

 

But today, invention alone is not enough. Real growth requires innovation, going beyond invention. Innovation happens when inventions face challenges and new solutions are created. Innovation is the active, creative process of applying inventions – it goes a step past research into the everyday world of creating solutions. And since our world has no shortage of complex problems, real innovation requires a variety of insights, and collaboration and openness become fundamental.

 

A dilemma that affects both nations and industries is how to understand, anticipate and manage the forces of innovation and commoditisation. Today, some companies and organisations are establishing new ways of conceptualising and managing business activity. They are specifically choosing higher-value business models. The networked, interconnected approach they provide enables higher levels of responsiveness, flexibility and efficiency than Industrial-Age business models. This new flexibility offers great potential for growth by increasing productivity and by creating entirely new capabilities.

 

As an example, in healthcare we will soon see personalised medicine integrating patient histories, and genomic data that changes the nature of diagnosis and patient care.  

 

The challenge really comes down to a question of national priorities and political will. Recognising innovation as the new arbiter of national competitiveness, some nations are beginning to build integrated, coherent strategies across a number of policy arenas to drive economic growth. They see innovation as more than managing ideas, R&D, technology development and transfer. They are working not only to generate fresh ideas and intellectual property, but also to help them be commercially successful. 

 

Finally, there is a growing realisation that economic leadership is not guaranteed. It depends not on how well you’ve done in the past, but on how effectively a nation can organise itself and its institutions around breakthrough thinking and bold new ideas.

 

Drawing policy makers, business leaders, scholars, scientists and average citizens to work together on this is tough. Any dialogue on innovation must be made in the global context. The forces of global economic integration – and advances in technology – are presenting complex challenges that can only be addressed by embracing opportunities for change and future prosperity.

 

The status quo simply cannot be an option. Governments, business, academia and labour must work together to create a climate and a culture that facilitates open, widespread collaboration. Most important, leaders must step forward to make our nations new engines for innovation, growth and global prosperity, at home and across the globe.