Hands up if you think the Americans are the most creative, most innovative nation on earth?
It's one of the world's great modern narratives and it's self evident when you think about it.
Silicon Valley. Google, Facebook, Apple, Microsoft, IBM, Amazon, Intel, Oracle, Tesla ... the list is endless.
At least that's the theory. But does the theory stack up? What does the big data reveal about the economic reality of the Great American Innovator?
Is the America really more innovative than Europe or Asia?
We'll begin with a region by region analysis and then dig down into the country by country analysis.
The source of the data? The World Bank.
First stop the R&D Spend by region.
Here's the pie chart.
Now the High Tech Exports. This time a line graph to illustrate Asia is disrupting Europe. Remembering that this is just the Euro Top 4. As you can see America was never in the race after the Dot Com Crash.
Now the pie chart.
This then is the headline chart: Both Asia and Europe are 3x more efficient than America.
Next... the region by region analysis.
We'll begin in the Asian Tigers.
As you can see the combined High Tech exports of the Top 3 Economies in Asia match the R&D spend by the Americans. And visa versa. Surprised? Wait till you see the country by country break downs.
Here's China vs USA. China's accumulated High Tech Exports equal those of the USA but their innovation engine is over 8x more efficient than their noisy neighbours across the Pacific.
Next is South Korea. Only a fraction of the of the USA but they do have a competitive advantage. Their R&D at least delivers an ROI.
Finally, here is Japan. Japan is unique among the 7 economies mapped here in that it is the only country with an innovation engine that is almost as inefficient as the Americans.
On to Europe.
Again we find the Top 4 Economies in Europe almost sell as much high tech as the Americans spend trying to achieve that elusive competitive edge. They also spend as much funding the next generation as America sells. Bet you didn't see that one coming?
Ok. Now the Country by Country breakdown.
We'll begin with Europe's favourite son. The UK. Again a fraction of the size of the US but certainly more efficient.
The same applies to the much more robust Germany economy.
And so too with France.
and yes, surprise, surprise even Italy, although much smaller and the least efficient of the Top Europeans, is still significantly better at the innovation business than either the Americans or the Japanese.
Indeed, of all the European Economies, the efficiency of the US Innovation Model appears most closely aligned with that of Greece.
Now who would have picked that?
But then again it speaks to the power of story telling... and Americans are the most innovative storytellers in the world.
Updated Winter 2020:
It's been almost 7 years since we published this study
So what, if anything, has changed?
Obviously the Nasdaq. In the 3 decades of the networked economy (1990-2020) the Nasdaq Index has grown 11.5x on an inflation adjusted basis
Meanwhile the US export performance continues to fade
The US exports less high tech on inflation adjusted basis than it did in 1990
High Tech exports have shrunk under the Trump administration and Singapore has probably replaced the US in 5th position
Meanwhile the North American high tech exports continue to be dwarfed by the innovation engines of Europe and Asia
To help understand the US malaise let's explore a new metric: High Tech Export $/Capita
As you can see US High Tech imports out number exports by a factor of 4x on a $/Capita basis
While European Exports on a $/Capita outperform the USA by a factor of 4x
You can put this performance into the wider Western Economic context
But you get a much better picture of where the US sits in the long tail of global innovation when you compare it with the performance of the City/State Tigers of Asia
Data Source: