Relativistic regional innovation index and novel business cycle

Abstract

In this paper, we propose a new type of relativistic regional innovation index by using the international patent application data. Based on the super-linear relationship between regional innovation and economic development, the new index can eliminate the influence of economic development level on innovation capabilities, and can effectively achieve the comparison of innovation capabilities among economies at different economic development levels. This new index is quite simple, and points out a series of new findings that are sharply different from the traditional cognitive phenomena, e.g. the index shows that the technological innovation capabilities of mainland China are among the highest in the world in 1980s. Moreover, the use of this new index not only can efficiently explain the economic growth of countries in the world at a higher level, but also find that there is a novel 20-year business cycle in the correlation between the index and economic growth rate. These results show that the index, as a simple single indicator, can achieve a higher degree of explanatory ability with minimal data dependence. This new index not only repositions the innovation capacity of world’s economies, but also provides a new insight into an in-depth understanding of the relationship between innovation and economic development, and implies the development potential and application space such a kind of relativistic economic indicator.