NIC on the week wishes all Happy Easter 2016


NIC on the week: Next update 12:00 CET 29/03/2016.

Stay tuned!

Any questions? Mail a NIC team member or mail your question to: nic research.

NOTE:

Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.


Serious human right issues


Recap:
  • Turkey perform on a rather low NIC level below EU averages, but has made steady (moderate) progress in pace with Poland and Bulgaria. Turkey general NIC performance is close to neighbouring Bulgaria and Greece, but somewhat below economic neghbours in EU, Poland and Spain.
  • Focus should shift to strenghten national human capital NHC.

Background: Social insecurity and unpredictability

National intangible capital NIC is active in a broad context. Main components in this context are financial, cultural, social and environmental capital:

NIC Turkey context of national IC


From this point of view and in this context Turkey is unstable:

  • Turkey’s Human Rights Rollback: Human rights watch
  • Turkey received a downward trend arrow due to more pronounced political interference in anticorruption mechanisms and judicial processes, and greater tensions between majority Sunni Muslims and minority Alevis: Freedom House
  • The human rights situation deteriorated markedly following parliamentary elections in June (2015) and the outbreak of violence between the Kurdistan Workers’ Party (PKK) and the Turkish armed forces in July: Amnesty International
  • The Syrian crisis has shaken the foundations of the ‘European’ Project and polarized the European community. However, the continent is dealing with a small number of refugees in comparison to states in the Middle East. Lebanon and Turkey have taken significant amounts of Syrian refugees since the crisis began in 2011. Turkey has adopted an open-door policy to the flow of refugees; however, there are many questioning within Ankara whether Turkey has maybe reached its limit: Global Risk Insights

and this makes NIC Tipping point analysis difficult as forecasting and trend analysis would need a more stable social and cultural situation. Under pressure here are social and cultural capital and finally also environmental and financial. This uncertainty not only affect analysis: Uncertainty, insecure and unpredictable socio-political development(s) hamper positive NIC growth in Turkey - and challenge basic EU values.


Turkey NIC Tipping point projections

We define a NIC Tipping point as a point on a time line (future) where NIC impacts in GDP per employed ceases to grow, i.e. NIC impact in labor productivity stagnates on a certain level.

In order to estimate the existance of a tipping point (in near or far future) we calculate a NIC TP value for each driver (indicator) = annual projected increment on impact in GDP. This is performed by analysing near past and far past behavior of the driver (i.e. we perform trend analysis of drivers impact). As in SWOT analysis we acknowledge intrinsic, NIC trade values and global development related impact factors for each driver.

Schematically a positive TP value granting growth looks like this:

 

TP SWOT


As you notice the projection is then calculated using best performer as a target / optimal value for impact (strenghtend by 10 %). All values are calcualted on a year to year basis starting 2001. Schematically a negative TP value causing negative growth (declining impacts) looks like this:

 

TP SWOT


Finally we add together (aggregate) the net cumulating effect(s) of all drivers and come to a NIC Tipping point projection for each country.


Turkey: Present socio-political situation unchanged or worsens


NIC Turkey SWOT negative TP


Turkey: Present socio-political situation lighten up and tensions get weaker


NIC Turkey SWOT positive TP


  • As Turkey present NIC perform on a rather low level NIC impact in GDP will grow and pushes the Tipping point well beyond 2020 in both scenarios.
  • Differences in impacts, however, are significant: Positive NIC development will uphold a impact growth doubble that of a neagtive
  • Positive scenario = NIC impact growth 5.60% / Negative scenario = NIC impact growth 2.84%.

Turkey NIC Tipping point driver details

Strenghts: Strenghts upholding growth are at risk:


NIC Turkey SWOT strenghts TP


Weaknesses: Human and process capital is deteriorating worryingly:


NIC Turkey SWOT weaknesses TP


 

Summary:
  • Turkey perform on a rather low NIC level below EU averages, but has made steady (moderate) progress in pace with Poland and Bulgaria. Turkey general NIC performance is close to neighbouring Bulgaria and Greece, but somewhat below economic neghbours in EU, Poland and Spain.
  • Focus should shift to strenghten national human capital NHC.
  • Turkey need to stabilize present socio-political situation. In addition: Human and process capital issues need to be addressed urgently and firmly.

NIC on the week: Next update 12:00 CET 30/03/2016.

Stay tuned!


Any questions? Mail a NIC team member or mail your question to: nic research.

NOTE:

Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.


WEF: A tweet and two articles you need to read


 

Summary:
  • Importance of education (read national intangible / human capital) as driver of nations growing GDP and welfare can not be over stated.

NIC on the week: Next update 12:00 CET 31/03/2016.

Stay tuned!

Any questions? Mail a NIC team member or mail your question to: nic research.

NOTE:

Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.


How strong is EU28 innovativeness?


Triggering story:


(PAGE: If page don't load correct: Reload NIC on the week.)

"The remarkable growth in patent applications at the EPO proves that Europe continues to be a hub for innovators from all over the world, and an attractive technology market," said EPO President Benoît Battistelli.

Well, "a hub", yes, but compare these figures to figures for US growth (16.4%) and China (22.0%):

There were marked differences in patenting activity among European countries in 2015: Italy reversed the negative trend of the past four years (with +9.0% more applications in 2015 from Italian companies than in 2014), as did Spain (+3.8% over 2014). Meanwhile, Belgium (+5.9% over 2014), the UK (+5.7%), the Netherlands (+3.3%) and Switzerland (+2.6%) all continued their growth. Other countries including France (+1.6%), Austria (+1.4%) and Sweden (-0.9%) remained more or less at the level of the previous year, while applications from Germany dropped again (-3.2%), and some Nordic states such as Finland (-8.3%) and Denmark (-2.7%) also had fewer applications.


Developmental trends 2001 - 2014

NIC EU28 potentials development


NIC EU28 impacts on GDP development


NIC EU28 efficiency development


Human and process capital (NHC and NPC) perform well, market capital (NMC) is recovering rapidly from the financial crisis, but renewal (innovation) capital (NRC) has de facto (major) problems.


General present trends and priorities in EU28 NIC

NIC EU28 present overall development


Considering EU28 NIC developmental stage this is worrying: Renewal capital should be a priority!

Focus need to be clearly shifted to renewal cpital and balanced with process and human capital.


NIC EU28 development priorities


NIC EU28 development dynamics


 

Summary:
  • Present developmental trends for EU28 renewal (innovation) capital is worrying: Renewal capital need to be more practically and financially prioritized and balanced with process and human capital investments.

This is a developing story: Next update 12:00 CET 01/04/2016.

Stay tuned!

Any questions? Mail a NIC team member or mail your question to: nic research.

NOTE:

Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.


Future renewal strenghts declining


Recap:
  • Present developmental trends for EU28 renewal (innovation) capital is worrying: Renewal capital need to be more practically and financially prioritized and balanced with process and human capital investments.

NIC future impact projection

We define a NIC Tipping point as a point on a time line (future) where NIC impacts in GDP per employed ceases to grow, i.e. NIC impact in labor productivity stagnates on a certain level.

In order to estimate the existence of a tipping point (in near or far future) we calculate a NIC TP value for each driver (indicator) = annual projected increment on impact in GDP. This is performed by analysing near past and far past behavior of the driver (i.e. we perform trend analysis of drivers impact). As in SWOT analysis we acknowledge intrinsic, NIC trade values and global development related impact factors for each driver.

Schematically a positive TP value granting growth looks like this:

 

TP SWOT


As you notice the projection is then calculated using best performer as a target / optimal value for impact (strenghtend by 10 %). All values are calcualted on a year to year basis starting 2001. Schematically a negative TP value causing negative growth (declining impacts) looks like this:

 

TP SWOT


Finally we add together (aggregate) the net cumulating effect(s) of all drivers and come to a NIC Tipping point projection for each country or region.


EU28: Base projection 2014


NIC EU28 Tipping point projection


Impacts of NIC on labor productivity (as GDP/employed) will continue growing, but growth rate will decrease. From being 4.65% during 2001 - 2014 it will drop to 1.65% 2014 - 2020. This is a rather low projected growth rate considering NIC present impact share in GDP formation (51.98%). Compare this to i.e. USA and Sweden with NIC impact shares in GDP formation well above 70% and increasing this with more than 2.5% each year!

However: As NIC TP values are calculated for all drivers we can pin point "strenghts and weaknesses" behind EU28 projected development:


Developing EU28 NIC strenghts and weaknesses

Drivers boosting the economy:


NIC EU28 Tipping point strenghts


Good and bad news:

  • Keeping in mind (from yesterday) market capital is on a recovery path and not developmental focus area only problems here are poor tax encouragement and investment risks.
  • As primary focus area process capital is performing well and is best performing in TP analysis.
  • However: Problems in renewal capital (and human capital) are evident: renewal capital should be focus area, but is losing its positive impacts worryingly, e.g. no dominant strenghts what so ever.
  • Few input strenghts and dominated by process capital. This sets potentials for future growth at risk.

Drivers losing their boosting impact:


NIC EU28 Tipping point weaknesses


  • Keeping in mind market capital on recovery this puts renewal capital at greatest risk of losing (growing) positive impact on economic growth for EU28! However: If market capital recovery don't continue it is at great risk (Europe loosing its attractivity?).
  • Renewal capital demand for practical anf financial support evident. Also: Renewal capital is at risk of losing its efficiency edge (Utility Patents/ R&D expenditure).
  • Human capital need strenghten its input drivers, i.e. "Public expenditure on education". Weakening: Result of austerity measures?
  • Focus area input drivers sets potentials for future growth at risk.

 

Summary:
  • Present developmental trends for EU28 renewal (innovation) capital is worrying: Renewal capital need to be more practically and financially prioritized and balanced with process and human cpital investments.
  • Renewal and human capital need to be strenghtend by focusing on critical input drivers. Recovery of market capital need to be kept on track.

This is a developing story: Next update 12:00 CET 04/04/2016.

Next week: We continue analysing EU28 renewal capital and enlarge (downsize) EU analysis to the EURO zone: "From EU28 and EURO to EU". We also focus on a basic question: How to aggregate EU NIC?

Stay tuned!

Any questions? Mail a NIC team member or mail your question to: nic research.

NOTE:

Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.