VNU UNIVERSITY OF ECONOMICS AND BUSINESS FACULTY OF DEVELOPMENT ECONOMICS FINAL THESIS FACTORS INFLUENCING GLOBAL INNOVATION INDEX IN DEVELOPING COUNTRIES AND POLICY IMPLICATIONS FOR VIETNAM Supervisors: Assoc. Le Dinh Hai Student: Tran Ha My Student ID: 20051306 Class: QH-2020-E KTPT CLC 2 Ha Noi, 2023 ii VNU UNIVERSITY OF ECONOMICS AND BUSINESS FACULTY OF DEVELOPMENT ECONOMICS FINAL THESIS FACTORS INFLUENCING GLOBAL INNOVATION INDEX IN DEVELOPING COUNTRIES AND POLICY IMPLICATIONS FOR VIETNAM Supervisors: Assoc. Le Dinh Hai Student: Tran Ha My Student ID: 20051306 Class: QH-2020-E KTPT CLC 2 Faculty: Development Economics Ha Noi, 2023 ili TABLE OF CONTENTS TABLE OF CONTENTS.- LH HH TH TH TH TH TT TH Hà HH ngà 1H ACKNOWLEDGEMENTTS.- --- 0 HS HH TH TH HH nu TH TH nh ng nh vi LIST OF ACRONYMS AND ABBREVIATIONS. ce cceceeseseceeeteceeceseceeceaeeeeeeseeseeess vii Ib309)9.
vill LIST OF FIGURES 2. ccc ec cecssceececeeececseeseeseceececeeessecsessessessessessesaceaeeceesaeesessesaeeaeeaees ix INTRODUCTION 8 TTĐ1a. Background and research prObÌÏ€m. Research aims and ODJ€CfIV€S.- 5 1 1v HH ng tư XI 2.
Specific research ODJ€CfIV€S.-- 5< 11H HH HH kh XI ca. xI CHAPTER 1: THEORETICAL AND PRACTICAL STATUS OF FACTORS INFLUENCING GII OF SOME DEVELOPING COUNTRIES IN THE WORLD. Theoretical and practical framework for GII of some developing countries in the IV 1. Innovation Output Sub-Index 0.
Factors influencing GII of some developing countries in the world. The GII situation of countries throughout the World. The GII situation of countries throughout the worÌd. Lessons for VI€fTIATT.
ó0 5 x11 v9 TH ng ng HH ng 13 1. 14 CHAPTER 2: RESEARCH METHODS.- St S2 SH HH HH HH hy 15 2. Research model of factors affecting GIÏÏ. Research process nh.
Research mme€tÏO CS. - --- 121125121191 91 1 91 H1 019g ng HH ngàng 18 2. The method of data colÏ€CfIOTI.- -ó- G1 1199 ng ng nnriệc 18 2. The method of data processing and analySis.
Method of data processing .1 v SH HH ng gnvey 19 2. Methods of data annaÏyS1S. - cv vn TH TH HH ey 19 CHAPTER 3: RESEARCH RESULTS AND DISCUSSION. Define nods and cut-point SfAf.
Predict the ultimate state of GII in developing Countries. General assessment of factors affecting GII of developing countries in the world 34 3. The current status of most influencing factors to GII in Vietnam. Framework for a practical proposal.
Policy implications for the development of the GII in Vietnam based on research ò0. Improving the GDP per C4Ia. Lengthening the compulsory eduCafIOII. Promote Index of Economic Freedom.
Reducing population ØTOW(H. HH ng TH TT it 44 VI ACKNOWLEDGEMENTS First of all, I would like to express my deep gratitude to the professors and lecturers of the Faculty of Development Economics, University of Economics, VNU for imparting me to valuable knowledge and creating the best conditions to complete this research. In particular, I would like to express my deepest gratitude to my supervisor, Assoc. Le Dinh Hai.
His enthusiastic instructions helped and imparted to me the extremely useful knowledge and made valuable contributions during the implementation of the project. Finally, I would like to thank my family and friends - who have always cared, shared and encouraged me during the research time. I hope to receive the help and suggestions of teachers to improve this research paper. I sincerely thank you! Ha Noi, 28" of October, 2023 Tran Ha My vil LIST OF ACRONYMS AND ABBREVIATIONS ASEAN The Association of Southeast Asian Nations FDI Foreign Direct Investment FTE Full-time Equivalent GDP Gross Domestic Product GERD Gross domestic expenditure on research and experimental development GII Global Innovation Index ICTs Information and Communication Technologies IEP Institute for Economics and Peace ISO The International Organization for Standardization MOSTI Ministry of Science, Technology and Innovation (Malaysia) MSME Ministry of Micro, Small & Medium Enterprises NITI Aayog National Institution for Transforming India PCT Percent Complete PISA Program for International Student Assessment PPP Purchasing power parity QS Quacquarelli Symonds R&D Research and Development TLDs Top-level Domain WIPO World Intellectual Property Organization Vili LIST OF TABLES Table 1.
The institutions pillar of GH] input. The human capital and research pillar of GII input. The infrastructure pillar of GI 1nput.-- 5 5c + Ss + +exsesereerseeesers 3 Table 1. The market sophistication of GI] InpUE.
The business sophistication of GI] Input.- --- -- + «++sss+s+sex+e+sexzsss 5 Table 1. The Knowledge and technology outputs of GÏÏ. The Creative outputs Of GÏÌ. Description of factors influence ïÏÏ.
The sources Toà). GII value is divided by income levels. eee eeceesseeneeteceeeeeceeeeseeeeeeneeneees 23 Table 3. Economic indicators in low income and lower middle Income.
Economic indicators in high income and upper middle 1ncome. Social indicators in low income and lower middle income. Social indicators in high income and upper middle income. Political indicators in low income and lower middle Incorme.
Political indicators in high income and upper middle Income. Correlation between the dependent variable independent variables. Summary of FEM model of factors affecting GIÏ. Description of the state of variables in BBNs.- ----sccS<csc<se 31 Table 3.
Rank the importance of factors affecting the GIÏ. The state of the nodes predicts the highest GII status as expected. Rank the importance of influencing factors .- --- -- +55 + 5< se +ssrsess 35 1X LIST OF FIGURES Figure 1. The inputs and outputs Of GÏÏ.- --- ¿55+ +23 3£ +EE*EEveeerEreeeerreereres 1 Figure 2.
Hypothesized factors affecting GID. Research DFOC€SS. - --- -- G1 1S 11111119111 111 TH TH HH 18 Figure 2. Simple structure of BBN in the research of factors affecting GII.
The BBNs model predicts the impact of factors affecting the GII. The BBNs model predicts the highest probability of the GII through policy In 1086i103390 10177. Background and research problem Innovation has become one of the most concerning aspects across the globe. To evaluate the innovative attainment of one country, there is an urgent need for a new measurement.
Therefore, Global Innovation Index (GII) was created in 2007, with an aim to measure agenda and engage in an important aspect of economic policymaking, it contributes to design policy and improve the innovation performance (WIPO, 2020). However, there are numerous adversities that each country has to encounter to achieve national innovation. Both the cost and availability of funding have a detrimental impact on productivity, but a shortage of competent staff mostly affects high- productivity enterprises, resulting in low innovation effectiveness (Coad, Pellegrino, & Savona, 2016). According to (Bano, 2023) shortage of qualified workers will be a global issue in 2023, with an expected inflation rate of 77% compared to 35% in 2013.
In terms of funding, despite growing pressure to increase green R&D, one-third of 850 enterprises from 17 countries lack the financial means to innovate. Four out of ten struggle to afford needed significant initial expenses for launching sustainable innovation, a critical first step in the upcoming green transformation (Ayming, 2023). In developing countries, especially in India, some issues include low demand for innovations in the market and organizational rigidities when recorded by 71.28% of respondents, respectively. According to the National Manufacturing Innovation Survey 2021-22, just 25.01% of the 8,074 MSME and big enterprises were determined to be innovative (Soni, 2023).
Although it achieved some innovative attainments while ranked at 46th place of GHI in 2023, Vietnam still shares the same innovation limitations with other developing countries. According to the Ministry of Science and Technology, 97% of Vietnamese firms in 2023 are small and medium-sized that have not developed significantly in order to stay up with technological advances (Khue, 2023). Several issues such as the labor xi force lacks qualification, high technological and soft skills. Furthermore, Vietnamese governance management level is lower than that of other countries.
To improve national innovative quality, it is crucial to identify the influencing factors to innovation process, more specifically is GII. Until now, there is limited research about the determinants of GII across the globe. Some noticeable variables mostly mentioned including infrastructure quality, FDI, numbers of skilled workers, etc. However, how the change of all these variables affecting the GII of one country is not mentioned in all the existing research.
Therefore, this research inherited the influencing factors from previous research and considered how each variances change can lead to the change in GII value of some developing countries and apply some solutions for Vietnam. The research “Factors influencing Global innovation index in developing countries and policy implications for Vietnam” is created to deal with all the given goals. Research aims and objectives 2. Research aim By analyzing the factors affecting GII of some developing countries across the globe, thereby implying policies that contribute to the successful attainment of reaching the GH of Vietnam to the very high level in the coming years.
Specific research objectives e Systematizing the theoretical and practical state of GII of some developing countries in the world; e Analyzing the current situation of GII of some developing countries in the world; e Determining the factors affecting the GII of some developing countries in the world through Bayesian Belief Networks models (BBN); e Implicating policies that contribute to the successful attainment of raising Vietnam's GII value in the coming years. Research subjects Factors influencing GII of 70 nations worldwide throughout the five-year period of time from 2016 to 2020; Implications of policies contributing to the effective execution of Vietnam's GII in the coming years. Content scope e Theoretical and practical status for GII. e The current status of GII in many developing countries in the world.
e Factors influencing GII in many developing countries throughout the world by using Bayesian Belief Networks (BBNs). e Policy implications contributing to the effective execution of Vietnam's GII in the coming years. Spatial scope The study collects secondary data from 70 developing countries around the world. Time scope During the five-year period of 2016, 2017, 2018, 2019 and 2020.
Research hypothesis e What is the status of GII of some developing countries in the world? e What factors significantly affect the GII of some developing countries in the world? e What policies need to be implemented for the effective execution of Vietnam's GII in the coming years? 6. Thesis structures Aside from the Introduction and Conclusion, the study report is divided into three major chapters: xiii Chapter 1: Theoretical and practical status of factors influencing GII of some developing countries in the world. Chapter 2: Research process and methodology. Chapter 3: Research results and discussion.
CHAPTER 1: THEORETICAL AND PRACTICAL STATUS OF FACTORS INFLUENCING GIT OF SOME DEVELOPING COUNTRIES IN THE WORLD 1. Theoretical and practical framework for GII of some developing countries in the world 1. Definition of GI GII is an annual assessment of nations based on their potential and success in innovation, published by WIPO (WB, 2010). It was founded in 2007 by INSEAD and World Business, a British publication.
It was a collaboration product of WIPO combines with Cornell University, INSEAD, and other organizations and institutions until 2021. It is based on both subjective and empirical data gathered from a variety of sources, including the International Telecommunication Union, the World Bank, and the World Economic Forum. The overall GII assessment is based on two sub-indices, the Innovation Input Sub- Index and the Innovation Output Sub-Index, which are both equally in giving an overall view of innovation. More specific, the average value of the Input and Output Sub-Indices is used to determine the total GII score.
Global Innovation Index (36) input pillars output pillars Creative Outputs 3.2 Investment 2 Regulatory ucati infrastructure 5.3 Trade, linkages impact goods and eopatel 3.3 Ecological diversification, services 3 Business \ sustainability and market scalg | 5.3 Knowledge environment absorption diffusion 7.3 Online creativity 27 Sub-Pillar Note: Number in (_) indicate of Rank and Score compared to 132 country/economy Figure 1. The inputs and outputs of GH (Source: Malaysian Science and Technology Information Centre) 1.