Ukraine one of world's worst innovators, study suggests

Ukraine one of world's worst innovators, study suggests
Of 56 countries measured, Ukraine came 4th from bottom, which made it the worst performing CEE nation.
By Henry Kirby in London March 11, 2016

Ukraine has emerged as one of the worst countries in the world for harnessing innovation and contributing to global technological development, a study by a public policy think-tank has found.

The Information and Technology Innovation Foundation report, titled “Contributors and Detractors: Ranking Countries’ Impact on Global Innovation”, examined 56 countries — which comprise almost 90% of the global economy — on 27 factors reflecting the extent to which their economic and trade policies contribute to or detract from innovation globally.

Of the 56 countries measured, Ukraine came fourth from bottom in 52nd spot, which also made it the worst performing Central and Eastern European (CEE) nation in the study.

The study aimed to examine not only the innovation capabilities and outcomes of countries, but also how their policies impact broader global innovation. To do this, they identified whether individual country policies were positive-sum, such as research and development (R&D) tax breaks, or negative-sum, such as export subsidisation or poor protection of intellectual property.

The study grouped Ukraine alongside Argentina and Indonesia as a ‘Traditional Mercantilist’ nation, meaning that, rather than harnessing technology to boost innovation domestically and globally, it instead employs “negative-sum” and “trade-distorting policies to grow their overall econom[ies]”.

The study highlighted Ukraine’s comparatively high level of taxation on ICT products as a major contributing factor to its low score. Its 5.2% rate was the fourth highest of all. Turkey’s massive 22.1% tax rate on ICT products was by far the highest – more than double second-placed Argentina’s 11%.

Ukraine also failed to impress in terms of R&D. Ukraine’s per-capita spending of $90 on R&D was the fourth lowest of the countries measured. In contrast, Slovenia was the highest-ranked CEE nation, coming sixth with just over $1,500 per person – nearly 17 times the R&D expenditure of Ukraine.

Slovenia was also the highest ranked CEE nation overall, coming marginally behind Taiwan and Japan at 16th. Only two places behind it came Estonia. Along with the Czech Republic, Hungary, Lithuania, Slovakia, Latvia and Poland, Slovenia and Estonia were categorized as “EU Up and Comers” in the report. This is a label used to describe countries that are “generally playing by the international rules of the game and not fielding mercantilist policies — but, largely because they have lower per-capita incomes, have not been able to invest as much as other nations in scientific research or education, and so score below the mean on these indicators.”

The report placed emphasis on the importance of Science, Technology, Engineering and Mathematics graduates to a country’s ability to foster innovation. At 1.08 per 1,000 citizens, Poland has the fourth-highest number of science graduates on a per-capita basis, coming behind New Zealand, the UK and Ireland, which came first, second and third, respectively, in this measure. Slovakia and the Czech Republic also scored well for STEM graduates, coming sixth and eighth, respectively.