Commercial: Innovate Britannia

Not widely reported, but a little chart in the back of last week's Economist shows that the UK has a long way to go before it is considered a world-leader in innovation.

The Economist Intelligence Unit's recently published report, 'Innovation: Transforming the way business creates', ranked Japan as having the most innovative economy for the period between 2002 and 2006. The top 20, in order, was:

1. Japan
2. Switzerland
3. United States
4. Sweden
5. Finland
6. Germany
7. Denmark
8. Taiwan
9. Netherlands
10. Israel
11. Austria
12. France
13. Canada
14. Belgium
15. South Korea
16. Norway
17. Singapore
18. United Kingdom
19. Ireland
20. Italy

Although the measure, based on a count of patents filed per million of population, is not necessarily ideal, it is a good proxy for innovation. Japan's success is achieved despite poorer scores in factors such as human capital stock, IT/telecoms infrastructure and a conformist educational system, because of what the report describes as an "innovate or die" approach.

Small countries perform disproportionately well too, attributed to comprehensive welfare and education systems, and high achievement in science and mathematical education. "Small countries," the report says, "also benefit from easier networking and comparative advantages derived from clusters of historical specialisms".

There are number of things to note about this. One is that the UK, in the report's forecast, is only predicted to rise two places for the period 2007-2011. Another is that there are a number of countries - especially Belgium - that could successfully incorporate messages about their innovate status into their national branding programmes. And clearly not all is dire in France, with their score six places above Britain.

But mostly it suggests that, despite the intensive focus on skills and productivity in the last ten years, innovation actually has to rise higher up the British political agenda.

Cynically, one might say that as soon as patents are issued in bullshit, the UK will vault ahead. But, even leaving aside the work of bodies like NESTA, there's a horrible sense that a combination of a lack of science and technology graduates, a high technology base that isn't large enough and economies rapidly catching up elsewhere, could leave the UK again facing a battle to stave off an economic decline in the next 20 years.