Why Chinese And Indian Companies Are Failing To Innovate?

Surprisingly, not even a single Chinese or Indian company managed to scrape onto a list of the top 100 most innovative businesses in the world, 2015. Meanwhile, the list was comprehensively dominated by American and Japanese companies (35% and 40% respectively).

Japan and the US account for 75 percent of the list, making them the true innovation hubs of the world.

Well, one could argue that “innovation” can be notoriously difficult to measure.

Report is strongly skewed towards research and development spending, the quantity of patents filed by businesses, and how often their intellectual property is used by other inventors.

In order to be eligible for the top 100 global innovators list, a company has to first fulfill a simple criteria of quantity not quality. Only businesses with over 100 unique patents over the most recent 5-year period are even eligible for consideration.

However, if we keep measuring innovation by how much money you spend on R&D and patent volume rather than the quality of the ideas being created, Chinese or Indian companies are going to struggle to compete.

Report suggests that one way for developing nations to propel their economies forward is to invest in innovation and building a reliable intellectual property infrastructure.

Asia continues to lead the world in innovation with 44 organizations represented, with 10 French companies making the list, France was the best represented country in Europe, the United Kingdom continues to be noticeably absent, largely because of the country’s relatively low Gross Domestic Expenditure on R&D.

Germany and South Korea took 4th and 5th place in the list with, respectively, 4 and 3 companies listed. Perhaps unexpectedly, neither the UK, India, nor China feature in the top 100.

The e-commerce giant, Amazon, which has expanded its cloud services business massively in recent years, debuted on Thomson Reuters’ Top 100 Global Innovators, while ageing tech giants IBM and Hewlett Packard dropped out. You can find the complete list here.

Note: Launched in 2011, the Top 100 Global Innovators program identifies those companies that are best at turning creative ideas into commercialized inventions. The program honors the 100 most innovative organizations globally, as measured by a series of patent-related metrics: overall patent volume, patent grant success rate, global reach of the portfolio and patent influence.

Geographic breakout: List of countries with 100 most innovative businesses in the world, 2015:

1. Japan
Companies listed: 40

2. USA
Companies listed: 35

3. France
Companies listed: 10

4. Germany
4 companies listed

5. South Korea
Companies listed: 3

6. Switzerland
Companies listed: 3

7. Belgium
Companies listed: 1

8. Canada
Companies listed: 1

9. Netherlands
Companies listed: 1

10. Sweden
Companies listed: 1

11. Taiwan
Companies listed: 1