Innovation without frontiers - lessons from emerging economies

BearingPoint. Institute Innovation without frontiers – lessons from emerging economies Companies from 'high income' 7% of largest global firms . countries dominate global innovation spend One hundred giant firms, all from the high-income countries, account for 60% of the total R&D ... account for 60% of total expenditure among the world's top 1,400 R&D expenditure companies Number of globally dominant businesses in the manufacture of: Large commercial aircraft Infrastructure for mobile 3. telecommunications Heavy-duty trucks 6. Digital cameras 10 Pharmaceuticals Source: BERR But 'developing' countries are more efficient innovators Average 'net innovation output scores' show emerging (CIVETS) and newly advanced (BRIC) economies to be twice as efficient as developed economies (G7) EMERGING (CIVETS) NEWLY ADVANCED (BRIC) DEVELOPED (G7) -6.3 -5.6 -12.3 1.3 South 0.8 Russian Vietnam Turkey Colombia Egypt Africa China Brazil Fed. Germany Italy France UK Canada US Japan Indonesia India -1.6 -1.1 -3.9 -7.9 -10.2 -10.7 -10.9 -12.6 -12.4 -13.2 -13.9 -14.3 -17.8 Source: Global Innovation Index, Economist Intelligence Unit -21.2 Unaddressed markets present a considerable opportunity The 'bottom of the pyramid' (population living on a PPP figure of under USD 3,000/year) represents a market of nearly USD 5 trillion. Shown below split by sector: $932bn Other $2,895bn $332bn Housing Food $158bn $433bn Energy Health $179bn Transportation $51bn $20bn ICT Water ('Net innovation output score' calculated with GII Country scores for 'innovation output' minus 'innovation input') Source: World Resources Institute BEI-003-12-MM-IN