New Does Not Mean Better in All Countries

IIIP Innovation Confidence 2007 Index Reveals Skepticism in Europe, Enthusiasm in Asia

A new global survey of innovation acceptance reveals that consumers’ confidence in the ability of more advanced products and services to improve their lives varies widely around the world and that up to half of consumers in some European continental countries are skeptical of the value of innovation. Only 30 percent of Dutch working age adults believe that new products or services will improve their lives in the next six months, compared with 60 percent of United States consumers, and 80 percent in India and the United Arab Emirates, according to The Institute for Innovation & Information Productivity, which released the study today.

Despite its reputation for innovation and entrepreneurship, the United States falls approximately midway in the innovation confidence index, the same as China, but behind fast-growing economies with young populations like Brazil, India, Ireland and the United Arab Emirates. Young, well-educated students, business people and full-time employees are more likely to be innovation confident. Given all of the considerations measured, in some continental European countries women are less likely to be innovation confident than men.

Overall, the continental European countries surveyed have the lowest rates of innovation confidence. For example, despite the reputation of their country for widespread use of mobile telecommunications, only one third of Finns expect in the next six months to try products or services that use new technology, compared with over two thirds of Brazilian, Indian, Irish and UAE residents.

The results of the study, which was based on almost 25,000 respondents, is a new index of “Innovation Confidence” indicating the openness of the twelve surveyed countries to new technology and innovation as shown:

IIIP Innovation Confidence Index
(from the most confident nation to the least)

“The difference in innovation confidence across the countries in our sample is striking. In some continental European countries, over half of working-age people lack confidence in new innovations. We found a more positive acceptance of innovation in fast-growing economies,” said the report’s author Dr. Jonathan Levie of the University of Strathclyde in Glasgow.

“We can’t yet say what effect these results imply for the rates of domestic innovation in these countries. But given that innovative entrepreneurs need people to buy their new products or services, Europe may be right to be concerned,” Levie said.

With technological-based and other advanced products spreading throughout world markets, the new index was developed to determine which regions and countries are more receptive to new innovative goods. The IIIP Innovation Confidence Index, which is distinct from the general consumer confidence, was commissioned by the IIIP and implemented by the Hunter Centre for Entrepreneurship at the University of Strathclyde in association with the Global Entrepreneurship Research Association and its annual Global Entrepreneurship Monitor (GEM) report.

Index Strategically Developed to Study Innovation Acceptance
IIIP Research Committee Chair and Microsoft Director of Information Work Vision, Dan Rasmus, said, “As economic success shifts from industrial production to the utilization of knowledge through innovation, we need new vehicles to understand the willingness of markets to accept innovation. This study creates a new metric that will help companies better understand where innovations will be accepted, and will provide insight to governments that are seeking improvements in local and regional innovation.”

The IIIP Innovation Confidence Index was developed around three questions incorporated into the annual GEM survey of individual entrepreneurial activity worldwide. The questions were added in selected countries representing diverse size and income in Asia, the Middle East, South East Asia, Europe, North America and South America. Representative samples of adults between 18 and 64 years old were asked if, over the next six months, they were likely to buy products or services new to the market, they were likely to try products or services that use new technologies for the first time, and whether new products and services will improve their lives.

Based on the results, the surveyed countries can be ordered on a spectrum from highly innovation confident nations to “divided nations” where about half the population appears resistant to new products and new technology. The Index will be updated annually to track global market trends around the acceptance of innovation.

The Innovation Confidence Index 2007 Report was initially distributed as an independent document to the annual GEM report at the 2008 GEM Planning Meeting on Jan. 17-20 at Babson College in Mass., U.S.A. It is being released to business and the general public today and is available at no cost on The Institute for Innovation & Information Productivity Web site at http://www.iii-p.org.

About the IIIP
The techniques for measuring performance today, from factory floors to the delivery of services to the outcomes of innovation, often fall short because they do not consider the value of new technology or provide meaningful indicators to determine tradeoffs among multiple investments. The Institute for Innovation & Information Productivity was formed in 2006 to break through outmoded, industrial-age biases and redefine knowledge economy measurements for individuals, teams, firms and nations. The IIIP develops new measurements and best practices to better understand the factors affecting business and organizational performance, studies the impact of technology, and encourages a global dialogue on improving operational results. More information about the Institute is available at http://www.iii-p.org.