Finland, Ireland, Sweden, Switzerland, and the US are among the countries that rank highest in terms of global innovation capability according to a first-of-its-kind evaluation of 26 nations by Forrester Research, Inc. (Nasdaq: FORR). The resulting ranking demonstrates how governments can implement successful innovation strategies designed for a globally networked knowledge economy.

According to Forrester, developed nations such as the US and Japan are spending on average $1,270 per capita per year on R&D with little to show for their science and technology investment. Taxpayer money is being wasted because many politicians and bureaucrats confuse innovation with invention.

“National empowerment, power, wealth, and well-being depend more on deployment of innovations than on the invention itself,” said Forrester Research Vice President and Research Director Michelle de Lussanet. “The biggest flaw of most innovation agendas is that they look at nations as closed systems, as if nations must have all innovation capabilities in-house. It can’t be done.”

Instead, Forrester sees an emerging global ecosystem of collaborative innovation among countries, companies, universities, and other organizations. Forrester calls these Innovation Networks. In an Innovation Network, countries identify and assume a specific role — Inventor, Transformer, Financier, or Broker — to match their unique skill set. Pioneering firms like IBM, Procter & Gamble, and BT have already mastered global corporate Innovation Networks. Now it’s the turn of governments to nurture and strengthen these collaborative market structures by instituting forward-looking public policies.

“Nations must shed their inward-looking innovation attitudes to become successful in the end-to-end global innovation value network,” said Forrester Research Vice President Navi Radjou. “They must play to their strengths and pair up with nations that complement these strengths.”

Forrester applied its Forrester Wave™ methodology to evaluate 26 nations’ innovation capabilities across the four areas of competence outlined above: Inventor, Transformer, Financier, and Broker. When analyzing a country’s capacity to excel in an Innovation Network, the traditional metrics of wealth, power, and size don’t matter as much as mastering a specific competency. For example: Both Switzerland and the US rank highest as Inventors because of their high academic achievement and high-tech advantage; Ireland is a leading Transformer nation because of its ability to attract inventive firms from other countries due to Ireland’s production and marketing expertise and its geographical proximity to European markets; Finland and Sweden score high in the Financier category because of their high R&D spend per capita and availability of local and foreign venture capital. No nation stands out as a Broker, which indicates that all countries still need to improve their cross-border collaboration competencies.

The 26 countries evaluated, which were all chosen because of their membership in the Organisation for Economic Co-operation and Development (OECD), include: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, South Korea, Mexico, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, the UK, and the US.

The report “The Forrester Wave™: National Innovation Networks, Q4 2006” is currently available to Forrester RoleView™ clients and can also be purchased directly at,7211,38180,00.html.