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NIC on the week: Next update 12:00 CET 05/04/2016.

We continue analysing EU28 renewal capital (last week) 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.


Alarming weak renewal (innovation) capital


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 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.

Estimating strenghts and weaknesses

Calcualting strenghts and weaknesses and trying to present a compact (short) list we need to observe NIC index values as potential for sustained future growth, impacts of driver as present economic value of driver and efficiency as a measure of cost and investment returns. In addition we need to observe intrinsic and global dimension.

For each driver (indicator) we therefore calculate:

  1. Distance to group average, i.e. D1 = value - average(group) with a weight = 1. Motivation: Internal weaknesses and strenghts need to acknowledge intrinsic differences between different NIC capital groups.
  2. Distance to world average for driver, i.e. D2 = value - average(world) with a weight = 2. Motivation: Internal weakness / strenght does not automatically imply that this is true when compared to world averages.
  3. Distance to NIC trade value, i.e. D3 = value - NIC trade value with a weight = 3. Motivation: Strenghts and weaknesses need to be measured in the economic realm of production and trade as country specific.
  4. Weighted distance, i.e. WD =(D1*1 + D2*2 + D3*3)/6

Weights are here chosen to reflect what matters: What matters more than just high values (in group) is that the value is competitive (vs world) and generates economic activity (competitive trade). And the result for EU28:


EU28 SWOT Strenghts


We believe this is a more true picture of how strenghts in national intangible capital is distributed.  However, still, we ask once more:

When looking for strenghts and weaknesses: are drivers potential (index values),  impact (as percentage shares in GDP formation and growth) and efficiency (as output/input ratio for economic impacts) equally important?

One can argue that they are equally important and should be given equal weights and analysed separately. This is OK and is certainly done. However, if we seek a compact list of weaknesses and strenghts combining potential, impact and efficiency (dynamically) we could give impact greatest weight followed by efficiency and potential. The rationale is that focusing on improving any (weak) driver will innevitably also strenghten its efficiency and its potential, but benefits in impacts will be fastest and strongest when initially impact has highest SWOT selective power.

Giving impact, efficiency and potential weights 3, 2 and 1 (and calculating Doubble Weighted Distance DWD) we can picture how strenghts and weaknesses are distributed over the various NIC capitals in EU28:


EU28 strenghts

EU28 present NIC strenghts / SWOT


EU28 weaknesses

EU28 present NIC weaknesses / SWOT


 

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.
  • Weaknesses in EU28 focus areas, process and renewal capital, need to be seriously addressed and corrected. Present renewal (innovation) capital dominating EU28 weaknesses is worrying.

This is a developing story: Next update 12:00 CET 06/04/2016.

Next: Wednesday interim: Brazil: Short overview, Thursday: EU28 Renewal capital and general weaknesses in detail.

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.


Alarming reports


Triggering stories:


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We believe these reports, the Panama Papers, in a brilliant way highlight importance of anti-corruption measures and value of freedom of press. And they co-work. No wonder they are part of national intangible capital NIC drivers (indicators 11 and 12) in national process capital NPC. And impact in EU28:

  • EU28 / NPC11: Corruption: Impact in GDP formation (2014) 9.28% (driver impact rank 4 /48). Best performer Denmark: impact 17.75%.
  • EU28 / NPC12: Freedom of speech: Impact in GDP formation (2014) 9.65% (driver impact rank 2 /48). Best performer Sweden: impact 15.73%.

 

Summary:
  • Value of freedom of press, speech, and anti-corruption measures can not be over stated. Not only are they powerfull economic drivers, but they are essential NIC drivers of social justice and societal progress.

NIC on the week: Next update 12:00 CET 07/04/2016.

Next: Thursday interim: Brazil: Short overview, Friday: EU28 Renewal capital and general weaknesses in detail.

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.


Brazil: A story of untapped possibilities and opportunities

Triggering reports: IMD, WEF and OEC:

IMD World competitivess report 2015


Brazil IMD 2015 Development


WEF Global competitiveness report 2015/16


Brazil WEF 2015 Development


OEC Economic complexity 2013


Brazil OEC 2015 Development


  • Summary: Down !

The paradox:

Comparatively good national intangible capital NIC potentials (potentials of national IC), but odd and abnormally poor impact and efficiency performance.


Comparatively good NIC potentials, index values, compared with other BRICS countries:


Brazil NIC index values / potentials 2014


Disappointment 1: Extremely low impact of national intangible capital on GDP formation and growth:


Brazil NIC impact in GDP 2014


Disappointment 2: Low impacts are in addition acchieved at very high costs (for impacts) with surprisingly weak output/input efficiency:


Brazil NIC output/input efficiency 2014


Consequences:

National intangible capital NIC drivers in Brazil are stagnated and positive future impacts are weakening.


Disappointment 3: Whereas (all) other BRICS countries steadily draw positive and increasing impacts from NIC and are making steps towards the knowledge economy structure Brazil is on a stagnated path - losing potential NIC revenues by the day:


Brazil NIC BRICS development of impact comparison


Disappointment 4: Time is running out as impact growth is about to shrink from 3.13% to 1.2% ... to ?? (when it de facto, considering NIC developmental stage, should be growing for Brazil !):


Brazil NIC impact Tipping point projection 2014


 

Summary:
  • Impact and efficiency weaknesses need to be identified and focus so shifted from potentials (indexes and rankings (IMD/WEF)) to impacts of national intangible capital NIC.
  • Opportunities are lost if weaknesses in Brazil's national intangible capital NIC are not identified and dealt with in order to increase present impact and efficiency levels to match levels projected by Brazil's present NIC potentials, index values. This may also imply addressing present socio-political issues forcefully.
  • There is evidentely a untapped potential embedded in Brazil's present national intangible capital NIC as Brazil today is clearly underperforming.

NIC on the week: Next update 12:00 CET 08/04/2016.

Next: Friday: EU28 Renewal capital and general weaknesses in detail.

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.


Strengths and weaknesses in EU28 innovation activities


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 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.
  • Weaknesses in EU28 focus areas, process and renewal capital, need to be seriously addressed and corrected. Present renewal (innovation) capital dominating EU28 weaknesses is worrying.

Strenghts:

EU28 SWOT strenghts 2014


  • Not under threat: Process capital NPC with positive strength linked to EU Digital agenda !
  • Human capital NHC: 3 out of 5 strong drivers are actually on a NIC Tipping point path putting future positive impacts at risk if not strenghtend actively.
  • Present strong Market capital NMC: Under some pressure and much of this pressure is concequence of financial and Greece crisis aftermaths and present refugee crisis. We believe: solving these will strenghten market capital.
  • Worrying: No renewal (innovation) capital NRC evident strenghts! This should be a ringing bell and of great concern for EU policy makers.

Weaknesses:

EU28 SWOT weaknesses 2014


  • Human capital NHC: Evident present strenght (no evident present weaknesses), but under threath, if not strenghtend today to prevent (present) declining trends in positive impacts.
  • Market capital NMC weaknesses: EU openness need to be actively supported and enforced. In fact this is also linked to deepening and further developing the inner markets of EU towards true inner markets (cmp. USA).
  • Process capital NPC: 2 out of 3 weaknesses are input weaknesses and these both can (easily and/or clearly) be addresed by correct policy measures.
  • The ringing bell: National renewal capital NRC. 66% of EU28 identified present weaknesses are in the capital group affecting innovation activities. This must not be overrided by other pressing EU28 issues as "innovation" is the future for EU success and sustainable growth. Worrying is also that in the weekness palett are such essential input drivers as "Basic research" and "Business R&D spending" and enhancers like "Cooperation between corporations and universities". Practical policy measures are here needed now, today - not tomorrow.

... and on the field:

INNO: What says latest (2015) EU Innobarometer about "Innovation trends in EU enterprises"?


EU28 SWOT Innobarometer clip 2015


And the report conclude:

  • "Companies have decreased the proportion of turnover they have invested in training, with a five percentage point decrease in the proportion investing more than 5%, and increases in those investing 5% or less. A similar pattern applies for investment in company reputation and branding and product or service design."
  • "There has been a 12 percentage point decline in the proportion of companies investing more than 5% of turnover on organisational or business process improvements, and a seven point increase in those investing nothing."
  • And from the report: Those investing in Research & Development more than 5% has declined by 4% (from 13% to only 9%) and those doing nothing has increased by 2% (from 63% to 65%).

 

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.
  • Weaknesses in EU28 focus areas, process and renewal capital, need to be seriously addressed and corrected. Present renewal (innovation) capital dominating EU28 weaknesses is worrying.
  • True status of EU28 present renewal (innovation) capital is a ringing bell and a wake up call: To ensure EU future economic growth and sustained welfare practical policy measures are here needed now, today - not tomorrow.

NIC on the week: Next update 12:00 CET 11/04/2016.

Storyline pending. Suggest a storyline?

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.