Is America really more innovative than Europe or Asia?

Summer 2014

Hands up if you think the Americans are the most creative, most innovative nation on earth?

I mean they have to be don't they?

They expend so much energy telling the world they are. So they must be?

It's self evident isn't it?

Silicon Valley. Google, Facebook, Apple, Microsoft, IBM, Wall St... the list is endless.

It is. Well, it just is. America is the most creative, most innovative nation on earth.

No questions asked. After all everybody wants to be an American.

Don't they???

At least that's the theory. But does the theory stack up? What do the numbers reveal? What does the big data reveal about the truth and the fiction of the American Innovator?

Let's explore the question in more detail: Is the America really more innovative than Europe or Asia?

Now, if, like a lot of people, be they Americans, Europeans or Asians, you don't like numbers or charts or statistical analysis, or any kind of mathematics, I'll answer the question up front.

The answer is a resounding no.

Here is the headline chart. It maps the relative efficiency of America's R&D spend against High Tech Exports over the period 1995-2011.

The source of the data? The World Bank.

The takeaway? Both Asia and Europe's innovation engines are at least 3x more efficient than America's famed innovation model.

So, even if you don't like numbers, fine, you've got the big picture.

Interested in knowing why? Then stick around for the detail.

We'll begin with a region by region analysis and then dig down into the country by country analysis.

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.

So much for the innovation leader. At home in its protected markets perhaps but hardly the global disruptor it so often lays claim to be.

Now the pie chart.

Hence 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?

Apparently Truth is stranger than Fiction.

And alas there is no bigger fiction in the world today than the disruptive American innovator. The purveyor of revolutionary new technologies. Those who proudly proclaim daily...

Trust me, this changes everything