METHODOLOGY And MEASUREMENTS
The innovation level may vary between the examined cities due to the divergence of sources and fields. So, in order to attain a proper assessment, there are six considerably comprehensive and future-oriented categories used as a benchmark in this study.

HUMAN TALENT

DIVERSITY, OPENNESS, TOLERANCE +

Innovation is chiefly driven by humans, so the most practical perspective from which to view innovation is through its performers. Human beings are the ones who discover ideas, apply them in practice and add build on them. Deriving from the aforementioned term of creative class coined by Richard Florida, a spectrum of professionals including entrepreneurs, doctors and artists is an essential wellspring for economic growth as this class promotes innovation. Occupational structure and business amenities are necessary components of any innovation ranking because the creative class’s distinguished talents complement and contribute to a city’s development.

Human talent is transient, so in order to attract and encourage talent, a city needs diversity, openness, and tolerance. Diversity is necessary to induce new and varied ideas. Openness and tolerance are complementary aspects of diversity and they enable a system to work in sync, resulting in fresh ideas and innovation. The indicators of this category are as follows:

  • General quality of life (Mercer)
  • City livability
  • Migrants as % of total population
  • Tolerance to LGBT (Lesbian, Gay, Bisexual and Transgender)
  • Occupational structure (creative class/tertiary industry) lifestyle
  • Cost of living
  • Ease of starting a business
  • Ease of doing business

To build a dynamic city you need everyone from different walks of life, different strata of society to come together and build something interesting. It needs to be progressive, dynamic, and definitely needs to be united in its vision. You need to reach that diversity of different ideas, but there needs to be a central idea that everyone can walk towards as well.

- Jackson Tan, Co-founder of Black Design & Phunk Studio
KNOWLEDGE CREATION

R&D, EDUCATION, IP +

Human talent and new ideas are spurred by educational systems. A city has to provide proper educational facilities to enable its citizens to acquire the intelligence and creativity necessary to innovate. From the business point of view, small and medium enterprises allocate some of their money for R&D expenditures to improve the company, as the product or service they deliver is one of the most distinct forms of innovation. The number of patents registered can also be a way to measure how much the innovativeness of an organization or city. That said, the indicators used to quantify a city’s knowledge creation level are:

  • Number of universities in that city per capita
  • Total R&D expenditure per capita [estimated from country level]
  • Total R&D expenditure
  • Total R&D expenditure as of GDP
  • Total patent registrations (per 100 000 inhabitants - country level)
  • Total trademark registrations (per 100 000 inhabitants - country level)
  • Expenditure on education as of GDP
  • Gross enrolment ratio in tertiary education

Knowledge workers and research institutes that the city produces are what catalyse new innovation, new products, new businesses. Right now the big businesses are not merely looking for the large population, but also looking at the social, technological and educational aspects they can leverage on in order to flourish.

- Victor Tay, Chief Operating Officer of Singapore Business Federation
TECHNOLOGY

CONNECTIVITY, TERTIARY, MOBILITY +

Technology is a tool of human talent that is a key driving force of a city’s economic health. High technology advancement can be shown by a city’s level of broadband penetration, access to capital, and industry density. The government contributes to this by building the infrastructure to create a proper innovation ecosystem.

High technology coverage provides better amenities for a city’s inhabitants. In a broader sense, technology itself increases the effectiveness and efficiency of a city’s operating system, and therefore can be considered as tangible evidence of the degree to which a city innovates. These indicators are used to quantify the technology and innovation ecosystem:

  • Broadband penetration
  • Number of mobile lines per capita
  • Tertiary sector importance(services added value % of GDP)
  • Access to capital
  • Population coverage(1/density of population)
  • Digital Economy ranking (e-readiness & beyond)

Things like design, biotech, advance manufacturing, and engineering are what make a city (like Melbourne) prosperous. The city is innovative, as well as a knowledge-based economy.

- Robert Doyle, Lord Mayor of Melbourne
Society

CULTURE, VALUE SYSTEMS, IDEOLOGY +

A city consists of a developed civilization or society, a social system that works with a certain mechanism to sustain each other’s functions. In this digital age, their ability to socialize can be measured through the prominence of social media. As a part within the society, culture inherited through different generations possesses its own values which need to be buoyed by the ideology of each member of the society in order to enable the city’s evolvement.

Art can be vivid proof of how society expresses themselves and innovate; therefore freedom of expression is necessary for art and culture activities to occur properly. Art can also be a reciprocal entity to the extent of its association with society, where it can be both a product and a resource of creativity. Creative amenity is necessary for a city to thrive, and this requires infrastructural supports such as public spaces, cultural institutes, and entertainment facilities, to build a creative atmosphere for the society to innovate.

On the other hand, innovation is a result of repetitive learning that may involve failure somewhere along the line. Well-developed societies are the ones who have gone through a lot of impediments and evolved through failure after failure. Acceptance and tolerance towards failure is important, as it will open more opportunities and new ideas to experience and innovate. With that being said, the indicators to quantify this category are the following:

  • Degree of censorship (freedom of expression)
  • Prominence of social media (proportion of Facebook users)
  • Tolerance for failure (# suicide for 100K inhabitants)
  • City influence

The culture of the city is what makes us different. If we are confident about our culture, if we understand our culture, then that is the foundation of our innovation and creativity.

- Ada Wong, Chief Executive of Hong Kong Institute of Contemporary Culture
GOVERNMENT

REGULATIONS, SUPPORTS, LAISSEZ-FAIRE +

With all of the urban elements a city possesses, there has to be some regulatory framework to support the system to operate and work well. The government plays a big role to make rules and boundaries, as well as supervise the system. Apart from the funds allocated for urban activities and facilities they provide, the government is also responsible in creating a stable condition (political, economy, social, etc) which majorly affects a city’s amenity and creativity production. Therefore to some extent, government can be seen as the innovation controller.

Even so, regulations would surely not work by itself; it needs proper cooperation and partnership between every city’s stakeholder - the government, citizens, business players, NGOs, etc. When a city has succeeded to work altogether towards its desired objectives, that’s when the sustainable ecosystem, human talent, technology, and other categories will thoroughly work out and achieve an innovative city. Hereby are the indicators used to quantify the government and regulatory framework level in a city:

  • Business freedom
  • Trade openness/freedom
  • Fiscal management
  • Political stability
  • Monetary freedom (debt levels)
  • Investment freedom
  • Financial freedom
  • Property rights framework
  • Level of corruption
  • Labor freedom
  • FDI per city [estimated from population]
  • Piracy rates
  • Income to property price ratio

It’s a level of government support - the money that’s being put into innovation, into research, and so on - as well as the institutions that we already have in place, like universities, research institutes, the ecosystem, are becoming the factors which act in making a place more innovative or allowing innovation to thrive.

- Richard Eu, Group CEO of Eu Yan Sang
GLOBAL INTEGRATION

COMPETITIVENESS, SUSTAINABILITY, BRANDS +

Every city has its own quirks and they equip themselves with a city brand in order to differ from each other. Apart from being a tool used to be distinguished from other cities (even in other countries), a city brand is initiated to attract newcomers to open bigger opportunities. In regards to this, a city needs to be accessible, open to new changes, and able to keep up with what is happening in the broader scope of area.

To achieve a sustainable growth, a city needs to make sure that it is visionary. Vision and orientation of a city towards the future can be determined by how well their urban planning is. This being said, environmental sustainability is one of the important factors to be concerned about as it will affect a city’s livability. To measure these factors we use several indicators as specified below as quantifiers:

  • Global competitiveness
  • Level of English literacy
  • Brands/fame/presence of innovative corporations
  • Environmental sustainability
  • Brain drain/gain (net migration)

Brand equity for a city is as important as equity for product. If you are able to show that image of your city/country, you bring a lot of value. It will indirectly translate into more people coming over in your country, more talents willing to contribute to development of your country, innovation will flourish, and lastly, it will itself fit into the growth of the country.

- Zainudin Nordin, Parliament Member of Singapore
HUMAN TALENT

DIVERSITY, OPENNESS, TOLERANCE +

KNOWLEDGE CREATION

R&D, EDUCATION, IP +

TECHNOLOGY

CONNECTIVITY, TERTIARY, MOBILITY +

SOCIETY

CULTURE, VALUE SYSTEMS, IDEOLOGY +

GOVERNMENT

REGULATIONS, SUPPORT, LAISSEZ-FAIRE +

GLOBAL INTEGRATION

COMPETITIVENESS, SUSTAINABILITY, BRANDS +

Appendix

Categories for Comparison

As previously mentioned, we use six main categories to gauge each city’s innovativeness: Human Talent, Knowledge Creation, Technology, Society, Government, and Global Integration.

Human Talent Index measures the quality of human resources that a city produces. It is indicated by the diversity, openness, tolerance, and amenities that the city possesses and/or provides to its society.

The Knowledge Creation Index measures the propensity of the city to create and to encourage new knowledge. This generally comes in the form of education of the people/workforce, as well as research and development.

Technology and Innovation Ecosystem Index measures the inclination of the city to enhance its ecosystem through technology advancement and supportive environment that induces innovation.

Society Index measures the society’s stance towards culture/art, values and ideology they embrace, supported by the systems governed by the city to facilitate them. This is closely related and underpinned by the freedom of expression in the city.

The Government and Regulatory Framework Index measures the properness of the city’s management system to spur innovation. It encompasses a set of freedoms facilitated by the city governance for financial, law and political purposes.

Global Integration and Orientation towards Future Index measures the level of global connectivity established by the city in regards to its endeavor to maintain sustainability.

New Index Value

Raw Data

Disclaimer

This white paper is produced by Solidiance for information purposes only. The ranking is made with no aim to discredit the brand of any city, nor to patronize the endeavours made by any city authorities. Whilst every effort in regards to the production of this white paper has been made to ensure the accuracy of the information and data contained herein, Solidiance bears no responsibility for any possible errors and omissions caused. All information, views and advice are given in good faith but without any legal responsibility - the information contained herein should not be regarded as a substitute for legal and/or commercial advice. Copyright restrictions (including those of third parties) are to be observed.