On Draghi competition thoughts - Part 3 - Global hubs

 

The Global Innovation Hubs Index 2024 from Nature shows four cities in the EU considered as global innovation hubs: Paris, Munich, Amsterdam and Dublin but there is strong convergence to the developed high-income hubs from Asian cities. These hubs are clustered into four development patterns, innovation economy-oriented cities, research innovation-oriented cities, combined research and innovation ecosystems, and cities of balance development.  While many hubs have held their positions longer-term, there have been significant changes with the AI revolution. 

The development or switching of rankings is associated with infrastructure development including the ability to increases global capital and labor flow. Hub cities constantly need capital and an inflow of new labor talent to maintain their edge.

Again, the EU shows consistency with their hubs, but there is an increasing global competition.

On Draghi competition thoughts - Part 2 - Global innovation

 

Global innovation country rankings from the world Intellectual Property Organization in the top 15 – Sweden, Finland, Netherlands, Germany, Denmark, and France with Ireland the only EU country that dropped out of the top 15. See WIPO Global Innovation Index 2024. The innovation rankings are stable for the high-income group but show wider dispersion and more dynamic change for lower income groups. Based on the innovation index there does not seem to be an EU innovation problem based on significant fall in country rankings. GII score is tied closely with GDP per capita; however, there are strong country performers that innovate above their income level. What is important is the output to input score which tells us something about innovation efficiency. This relative score difference is high for many EU countries. Nevertheless, the innovation pillars do show strong dispersion even for highly innovation countries. It is hard to argue that EU is failing with the innovation scorecard.

On Draghi competition thoughts - Part 1 - Higher education

I have been thinking about the Draghi report on competition in the EU. He makes a strong case for specific policy proposals. One area of focus is higher education. Our universities are where many of the innovations of the future will first be hatched, yet the EU is falling behind the rest of the world.  The US is also falling given the rankings of the top 200 universities. The big winner is China which has seen a strong increase in the number of top universities. 

We do not believe that education alone is the driver for innovation, but it provides a strong base. Education is a necessary but not a sufficient condition for innovation and innovation may not translate to competition. Enclosed is a table of data from ARTU, the aggregate ranking of top universities, that is a meta-ranking from a wider set of surveys. These top universities can also be tied to R&D spending. The EU has fewer top universities and R&D spending is less, but the real problem is the fragmentation of education in the EU. Both the US and China have integrate systems while the EU is still focused on country level education and not the EU in total.

We fight against straw men not reality

 "So true is it that, in science as elsewhere, we fight for and against not men and things as they are, but for and against the caricatures we make of them." - Schumpeter

We fight not against the Fed of reality, but the Fed we imagine. 

We fight against the fiscal policy we would like to see not what is present.

We fight against the behavior of the market we believe should occur and not what actually happens.

Let us resolve to to fight for and against what is and not what we think they are based on our notions of value.