Why innovation will become more important
Population growth is set to slow all over Asia in the coming decade. At the same time, technological progress is likely to accelerate markedly, with the US and China in the vanguard of change while other nations might lag. Rapid growth through exports also looks less feasible as protectionism and inward-looking policies proliferate. Finally, countries will face hard choices as they balance adapting to climate change against pressing for high economic growth.
We are in an era where the traditional drivers of economic development are losing their potency. Our view is that the winners in the next phase of growth will be those nations which are better able to create new engines of growth through more innovation. But this is easier said than done, as no one really knows for sure what makes one nation superior to another in innovation.
However, some surveys provide insights into the importance of innovation efficiency and how innovation inputs are turned into actual innovation outputs. Understanding how countries can be more efficient in the innovation process will help us craft better policies to foster innovation. This will be particularly important for countries such as Singapore in the coming years.
