Factors of Global Innovation Index

Many firms recognize innovation as the significant element of sustained competitive advantage, however innovation efficiency is difficult to measure (Civi, Emin 2000). Global firms invest heavily on creation of knowledge (Ba, S. et. Al 2001). Those efforts often result in innovative products and processes, but what is the return of creative development investment on individual firm innovation? Scholars and practitioners alike, rely on the well known Global Innovation Index™ to measure innovation input and output scales to reveal the causal relationship between the investment and results in national economies (Bathelt, H A. Malmberg, A. 2004). The Global Innovation Index™ (GII™) is an annual ranking of countries by their capacity for, and success in, innovation production. GII™ input areas include institutions, human capital, research, infrastructure, market sophistication, and business sophistication. Output areas include scientific and creative output i.e. patents, and products. This study attempts develop a firm‐level model which can estimate return on innovation investment utilizing the factors used in the GII national assessment to examine effects of internal influences using data acquired from GII and applying Smart Partial Least Squares™ analysis methodology to develop an applicable model for individual firm analysis. This study is part one of a series evaluating a model which displays confidence. Part two will apply the model to individual global firms where data is available.