New Ideas from Old Europe

A recent study by the Martin Prosperity Institute (Creativity and Prosperity: The Global Creativity Index) makes it clear why a solid, intimate and fruitful transatlantic relationship is needed. While many frantically point to China’s stellar economic growth and hunger for innovation, according to the institute it is actually “Old Europe” which continues to lead the way in economic and creative innovation.

The study takes a look at 82 key nations and their data on technology, innovation, human capital and other measures of economic competitiveness.

Richard Florida, director of the Martin Prosperity Institute and professor of business and creativity at the Rotman School of Management (University of Toronto) takes the works of Joseph Schumpeter and his focus on technology to help set up the study. The study measures innovation according to “three main metrics – research and development effort, scientific and research talent, and the level of innovation.”

The study’s approach can be poignantly formulated into a 3 “T” rule of economic development:“Technology, Talent and Tolerance.”

Sweden takes the first place on the GCI, maintaining the top position it held in the 2004 edition of the study.

Upon evaluation of the study it quickly becomes clear that the once ridiculed “Old Europe” seems to be the U.S prime competitor when it comes to innovation and creativity and not the BRIC countries (Brazil, Russia, India, China). Florida stresses this fact in his study, which highlights the fact that BRIC states collectively failed to fill in the top-tier ranks on the GCI. Russia comes in at 31st while Brazil takes the 46th rank, India the 50th, and China the 58th rank respectively.

In addition, European countries compromising the majority of the top group of the “creative class” (“workers in fields spanning science and technology, business and management, healthcare and education, and arts, culture, and entertainment”) which, makes up 40% or more of the workforce in 14 nations world-wide. Singapore leads the race, followed by the Netherlands and Switzerland, whilst the United States ranks only 27th, with 34.99%.

For all of those worried, North America does make it in the top tiers when it comes to tolerance, which the CGI report defines as the “openness to ethnic and racial minorities and openness to gays and lesbians.” This is a new and alternative economic research variable, in which Canada takes the prime spot world-wide followed by Ireland, the Netherlands, New Zealand, and Australia.

The study wants to foster a different sort of economic thinking, something, which becomes apparent when reading the introduction of the study, in which Joseph E. Stiglitz is quoted. Stiglitz argues that:

“What you measure affects what you do…if we have the wrong metrics, we will strive for the wrong things”

Stiglitz, then, agrees with the study in advocating for additional measures of economic and social well being, such as “socioeconomic development, sustainable consumption, production, and development, to social inclusion, public health, and sustainable transportation.” This is a more inclusive gauge with which to measure a societies development and sustainable growth. This is underscored by the strong correlation between creativity and economic output, which the CGI report indicates.

With this new outlooks on Europe, should it be in the U.S’s interest to court rising powers or rather equate Europe's efforts and invest more in its transatlantic relations?

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The rankings of the countries in the survey.

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How GCI matches with economic output.