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Innovation: Singapore Is No. 1, Well Ahead of the U.S.

Innovation: Singapore Is No. 1, Well Ahead of the U.S.

In an article on Bloomberg Businessweek, Bruce Einhorn discusses a Boston Consulting Group study of countries to rank them on an innovation index. The BCG study showed the US at number 8 in the world behind Asian tigers such as Singapore and South Korea in spite of having significantly better universities and access to funds. What makes a country innovative and why is it that the US with vast resources is lagging in this field?

Traditionally, with the best universities, the largest venture capital funds and supportive financial markets, the US had been the centre of innovation in the world. However, this is changing and the US, as per a Boston Consulting Group study of 2009, is at number 8 in the world.

The factor most responsible for this slide is the deterioration in the quality of manpower in the US. Two questions most frequently asked by the 800 US respondents to the study were whether skill development at high school level was being ignored and was the government making it easy for bright people to study and stay in the US.

The answers to these questions are becoming more critical in the wake of the debate on the US immigration policy. Data on immigration released while the report was under preparation showed that of the 65000 H-1B visas issued, most went to Indian outsourcing companies that brought in low cost engineers from India to the US. Under the current economic turmoil, there is a backlash in the US against this and this is causing tremors in India too. Another recent trend shows that Asian graduates of US schools are returning home to India and China.

The top ranked nation in the study was Singapore. With a small population of barely 4 million, Singapore has focused on attracting top talent to fuel its growth. Singapore gives 100 scholarships every year to students to work for a PhD in foreign universities and return to serve in Singapore’s government research labs or local universities for several years.

Singapore’s commitment to excellent science education is another reason why large drug companies have made the state a hub for their R&D. In the words of one industry leader, there is a constant flow of young graduates.

The global recession has affected Singapore too. As many as 160,000 expatriates have chosen to return home and a wave of mergers in the pharma industry has added to the uncertainty. The situation is not so grim because it is the lower skilled worker who is going back, it would become serious if the PhDs and scientists begin to leave says James P. Andrew, the leader of BCG’s global innovation practice and co-author of the report.

Under these circumstances, it is critical to avoid reducing innovation budgets. Countries have to continue to strive to be an attractive destination for the brightest minds.

Note: The preceding is a summary of an article found though our research, and is provided here with editorial comment for members only. Please see the full article at the following link for full original content.

The New Asia Innovation Team