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Creativity
and Prosperity:
The Global
Creativity Index
The Martin Prosperity Institute (MPI) is the world’s leading think-tank
on the role of sub-national factors—location, place, and city-regions—
in global economic prosperity. It takes an integrated view of prosperity,
looking beyond traditional economic measures to include the importance
of quality of place and the development of people’s creative potential.

AbouT The AuThors

richard Florida is director of the Martin Prosperity Institute and professor of
business and creativity at the Rotman School of Management, University of Toronto
(florida@rotman.utoronto.ca).

Charlotta Mellander is research director of the Prosperity Institute of Scandinavia,
Jönköping International Business School (charlotta.mellander@ihh.hj.se).

Kevin stolarick is research director of the Martin Prosperity Institute, Rotman School
of Management, University of Toronto (kevin.stolarick@rotman.utoronto.ca).

Kimberly silk helped with sourcing and references.

Zara Matheson produced the maps.

Michelle hopgood designed the graphics.
Creativity
and Prosperity:
The Global
Creativity Index

Martin Prosperity Institute
January 2011
exhIbITs




                 Exhibit 1               The global R&D investment map                        4
                 Exhibit 2               The global researchers map                           5
                 Exhibit 3               The global innovation map                            6
                 Exhibit 4               The global technology map                            7
                 Exhibit 5               The global human capital map                         8
                 Exhibit 6               The global Creative Class map                        9
                 Exhibit 7               The global talent map                               10
                 Exhibit 8               The global racial and ethnic openness map           11
                 Exhibit 9               The global openness to gays and lesbians map        12
                 Exhibit 10              The global tolerance map                            13
                 Exhibit 11              The Global Creativity Index map                     14
                 Exhibit 12              Top 25 overall Global Creativity Index rankings     15
                 Exhibit 13              The GCI and economic output (correlations)          17
                 Exhibit 14              The GCI and economic output                         18
                 Exhibit 15              The GCI and global competitiveness (correlations)   19
                 Exhibit 16              The GCI and global competitiveness                  19
                 Exhibit 17              The GCI and entrepreneurship (correlations)         20
                 Exhibit 18              The GCI and entrepreneurship                        21
                 Exhibit 19              The GCI and inequality (correlations)               22
                 Exhibit 20              The GCI and income inequality                       23
                 Exhibit 21              The GCI and human development (correlations)        23
                 Exhibit 22              The GCI and human development                       24
                 Exhibit 23              The GCI and happiness (correlations)                25
                 Exhibit 24              The GCI and happiness                               25
                 Appendix A              Global technology rankings                          32
                 Appendix B              Global talent rankings                              34
                 Appendix C              Global Creative Class rankings                      36
                 Appendix D              Global tolerance rankings                           38
                 Appendix E              Overall Global Creativity Index rankings            40




ii | Creativity and Prosperity: The 2010 Global Creativity Index
ConTenTs




executive summary                                           iv

Introduction                                                 1

Part 1: The Global Creativity Index rankings                 2
Creativity and the 3 Ts of economic development              3
The global technology maps                                   4
The global talent maps                                       7
The global tolerance maps                                   10
The Global Creativity Index                                 14


Part 2: Creativity and sustainable Prosperity              16
Global creativity and economic output                       17
Global creativity and economic competitiveness              18
Global creativity and global entrepreneurship               20
Global creativity and economic inequality                   21
Global creativity and human development                     22
Global creativity and happiness                             24


Conclusion                                                 27

Appendix                                                   28
Methodology, variables, and data                           28
Global technology rankings                                 32
Global talent rankings                                     34
Global Creative Class rankings                             36
Global tolerance rankings                                  38
Overall Global Creativity Index rankings                   40


references                                                 42

Acknowledgments                                            45




                                                  www.martinprosperity.org | iii
exeCuTIve suMMAry




                 The economic crisis has challenged popular conceptions of economic growth, both in terms of what
                 it is and how to measure it. While engendering growth and bolstering competitiveness remain high
                 on the agenda, immediate attention has shifted to creating jobs, lifting wages, addressing inequality,
                 and fostering long-term, sustainable prosperity. This new edition of the Global Creativity Index (GCI),
                 which we first introduced in 2004, provides a powerful lens through which to assess these issues.
                    The GCI assesses the prospects for sustainable prosperity across 82 nations according to a com-
                 bination of underlying economic, social, and cultural factors that we refer to as the 3 Ts of economic
                 development—Technology, Talent, and Tolerance. It also compares the GCI to a series of other metrics
                 of competitiveness and prosperity—from conventional measures of economic growth to alternative
                 measures of economic equality, human development, and happiness and well-being.


                 Our key findings are as follows:
                 overall ranking:
                 Sweden takes first place on the GCI, maintaining the top position it held in our 2004 edition. The
                 United States takes second place, improving its earlier fourth place finish. Finland takes third place,
                 followed by Denmark in fourth, Australia in fifth, and New Zealand in sixth. Canada takes seventh
                 place together with Norway; Singapore and the Netherlands round out the top ten. Despite their rapid
                 economic rise, the BRIC nations still do not crack the upper tiers of the GCI: Russia ranks 31st, Brazil
                 46th, India 50th, and China 58th.
                 Creative Class:
                 The Creative Class—made up of workers in fields spanning science and technology, business and
                 management, healthcare and education, and arts, culture, and entertainment—is a driving force
                 in economic growth. The Creative Class makes up 40 percent or more of the workforce in 14 nations.
                 Singapore has the highest creative ranking, followed by the Netherlands, Switzerland, Australia, Swe-
                 den, Belgium, Finland, Norway, and Germany. Canada ranks 12th, with 40.84 percent of its workforce
                 in the Creative Class, and the United States ranks 27 th, with 34.99 percent.
                 Technology:
                 Technology is a key factor in economic progress. From new inventions like software, robotics, and
                 biotechnology to improvements in manufacturing systems and processes, technology makes econo-
                 mies and societies more efficient and productive. We assess technological capacity through three
                 measures: research and development spending, R&D workforce, and patented innovations. Finland
                 takes the top spot in technology, followed by Japan in second place, the United States in third, Israel
                 in fourth, and Sweden in fifth. Canada ranks 11th.




iv | Creativity and Prosperity: The 2010 Global Creativity Index
Talent:
There is a broad consensus that the ability to generate, attract, and retain skilled and enterprising
people—talent—is essential to sustained economic success. We measure a country’s talent as a com-
bination of two factors: its average levels of educational attainment and the percentage of its work-
force in the Creative Class. Scandinavian countries leap to the top, with Finland and Sweden
taking first and second place, Denmark in fourth, and Norway sixth. Singapore ranks third, with
New Zealand in fifth and Australia in seventh. The United States is eighth, just ahead of Greece and
Slovenia in the ninth and tenth spots. Canada ranks 17 th.
Tolerance:
Tolerance is the third key factor in economic growth and prosperity. The ability to attract both talent
and technology turns on openness to new ideas and openness to people. We measure tolerance as a
combination of two variables, based on Gallup surveys of openness to ethnic and racial minorities and
openness to gays and lesbians. Canada takes the top spot, followed by Ireland, the Netherlands, New
Zealand, and Australia. Spain, Sweden, the United States, Uruguay and the United Kingdom round
out the top ten.
Creativity and Prosperity:
We compared the 3 Ts metrics and the GCI to established measures of economic and social progress.
The GCI is closely associated with conventional measures of economic output and economic competi-
tiveness. And it is also associated with broader measures of human development and life satisfaction
or happiness. Nations that score better on the 3 Ts not only have higher levels of economic output but
also higher levels of human development and happiness. We also find that the GCI is associated with
greater economic equality—nations which score higher on the GCI have less inequality. Our find-
ings suggest that there are two distinct paths available to greater economic competitiveness. On the
one hand, there are nations like the United States and the United Kingdom, where higher levels of
economic output and competitiveness occur alongside higher levels of inequality. On the other hand,
there are a greater number of nations like Sweden and Norway, where high levels of economic output
and competitiveness occur alongside far greater equality. This suggests a high-road path to sustain-
able prosperity, where the fruits of economic progress are broadly shared.




                                                                                             www.martinprosperity.org | v
Creativity global index report martin inst. sep 2011
InTroduCTIon                                        to social inclusion, public health, and sustainable transporta-
                                                    tion—providing a more robust gauge of economic and social
                                                    progress. As our economy begins its slow recovery from its
                                                    gravest crisis in generations, it’s essential that we seek not just
                                                    to hasten the return of short term growth but to lay the founda-
                                                    tions for sustainable, long-term prosperity.
                                                       Our research takes up this effort to broaden both our under-
                                                    standing and our measures of economic and social well-being.
                                                    The first part of this report presents our rankings of 82 nations
                                                    on the GCI, which takes three main classes of economic inputs
The economic crisis has challenged popular
                                                    into account: Technology, Talent and Tolerance (described in
conceptions of economic growth. Fueled by
                                                    greater detail below). We also examine the relationship of these
overly risky financial speculation and outright
                                                    three classes of factors and the overall index to a series of mea-
chicanery at times, the pursuit of short-term
                                                    sures of economic and social progress, ranging from conven-
profits led some of the world’s most advanced
                                                    tional measures of economic growth and competitiveness to
and affluent economies to the brink of collapse
                                                    broader measures of economic equality, human development,
and to the prospect of years, possibly decades,
                                                    and subjective well-being. Our methodology, data sources, and
of intractable unemployment and stagnation.
                                                    variables are laid out in detail in the appendix to this report.
We learned the proverbial hard way that the
unbridled pursuit of economic growth does
not always go hand in hand with rising living
standards. While engendering growth and bol-
stering competitiveness remain on the agenda,
attention has shifted to creating jobs, lifting
wages, addressing inequality and fostering
long-run, sustainable prosperity.
   This latest edition of the Global Creativity
Index (GCI) addresses these challenges head-
on, helping to shift the dialogue from a nar-
row focus on competitiveness and growth to
a broader focus on creativity, prosperity and
well-being. Our research is part of a broader
challenge to the way we understand economic
growth and development. Over the past decade
or so, a growing number of students of econo-
mic progress have concluded that we need to
improve the frameworks, language and metrics
that we use to gauge society’s overall wealth,
and that we need better measurements of hu-
man development, well-being, and happiness.
   One notable high-level effort was under-
taken by French President Nicolas Sarkozy’s
blue-ribbon Commission on the Measurement
of Economic Performance and Social Progress.
Chaired by the Nobel Prize winning econo-
mists Joseph E. Stiglitz and Amartya Sen, the
commission’s report challenged conventional
measures of economic growth and develop-
ment [1]. “What you measure affects what you
do,” noted Stiglitz at the release of the commis-
sion’s report. ”If we have the wrong metrics,
we will strive for the wrong things.” [1] The
commission proposed a range of additional
measures of social and economic well-being—
from socioeconomic development, sustainable
consumption, production, and development,



                                                                                               www.martinprosperity.org | 1
section 1:
The Global Creativity
Index rankings

2 | Creativity and Prosperity: The 2010 Global Creativity Index
CreATIvITy And The                                Technology
3 Ts oF eConoMIC                                  Long recognized as a key driver of wealth and progress,
                                                  technology is the first essential factor. Karl Marx and later
develoPMenT                                       Joseph Schumpeter recognized that advances in technology
                                                  are what enable capitalism to constantly revolutionize itself [4,
                                                  9]. “Capitalism not only never is but never can be stationary,”
                                                  Schumpeter wrote in 1942, as the Great Depression transi-
                                                  tioned into a full-blown war economy [9]. In the late 1950s,
                                                  Robert Solow devised a mathematical formula to capture
                                                  technology’s role as a driving force in economic growth,
                                                  for which he received the Nobel Prize in economics [10].

Following Adam Smith, classical economists        Talent
identified three key factors of production as
                                                  Talent is the second key factor. Starting in the 1960s, Peter
the foundations of economic development:
                                                  Drucker and Fritz Malchup detailed the economic importance
land, labor, and capital [2–4]. But physical
                                                  of knowledge [11, 12]. Knowledge workers not only invent new
factors alone no longer determine progress in
                                                  machines that turn out old products more efficiently—they
today’s modern, advanced economies, where
                                                  come up with completely new products that create whole new
factors like technology, innovation, knowl-
                                                  markets. Paul Romer’s theory of endogenous growth, with its
edge, and human capital play much greater
                                                  corollary that investment in R&D and education yield tangible
roles. Underpinning all of them is the role of
                                                  returns over the long term, formalized this phenomenon [13].
creativity. Economic growth and development
                                                  The generation of new knowledge thus becomes the key driver
turns on harnessing human creativity across
                                                  of economic growth. While knowledge is something that can be
the entire spectrum of innovation through
                                                  codified, creativity and the creation of new ideas, knowledge,
production—from the creation of new tech-
                                                  and technologies comes from people. Economists agree that
nologies and new firms to new and improved
                                                  skilled, ambitious, and entrepreneurial people—who they refer
processes, more efficient manufacturing and
                                                  to as “human capital”—are a central force in economic progress
production systems, and increasing effective-
                                                  today [14–16].
ness in the delivery of services.
   Creativity differs in a fundamental way
from more traditional, tangible factors of
                                                  Tolerance
production like land or raw materials: it is      Tolerance is the third factor in the ranking of economic prog-
not a stock of things that can be depleted or     ress. While most economists tend to see technology and talent
worn out, but an infinitely renewable resource    as stocks of endowments, the reality is that they are flows. The
that can be constantly improved. Everyone is      ability to identify the economic and non-economic factors that
potentially creative. Our future progress and     account for these flows is essential to an understanding of eco-
prosperity depends not just on the efforts of a   nomic progress. People are not forever-wedded to one place;
privileged knowledge elite but on how well we     they can and do move around. The technology and talent that
can unleash the creativity of each and every      they bring with them are mobile factors, and accordingly flow
human being.                                      into and out of cities and regions and nations.
   Creativity is mobile and portable—people
can and do move. But, it is almost always as-     New ideas are generated most efficiently in places where dif-
sociated with specific places, as Jane Jacobs     ferent cognitive styles are tolerated—and different cognitive
has shown [5, 6]. Places—countries, cities,       styles are linked to demographic diversity, as economist Scott
regions—bring together the key inputs from        Page has shown [17]. Openness to diversity is also in line with
diverse groups of people to the firms and         the broad cultural shift from materialist values about money
institutions that shape economic and social       and things to newer “post-materialist” values, which favor self-
progress. For these reasons, place has come       expression and a wider quest for happiness and well-being,
to replace the corporation as the key economic    as identified by Ronald Inglehart [18–20]. Tolerance—open-
and social organizing unit of our time.           ness to diversity—provides an additional source of economic
   The GCI offers a new, more unified way         advantage which works alongside technology and talent. The
to assess the key inputs that drive long-term     places that are most open to new ideas and that attract talented
economic prosperity based on what we have         and creative people from across the globe broaden both their
elsewhere dubbed the “3 Ts of economic devel-     technology and talent capabilities, thereby gaining a substantial
opment,” Technology, Talent and Tolerance         economic edge.
[7, 8].


                                                                                             www.martinprosperity.org | 3
The 3 Ts of economic development work together in mutually                 We assess national technological capacity
reinforcing ways. Any one “T” is a necessary but in itself insuffi-         through the use of three measures:
cient condition for economic success. For a nation or region
                                                                              1. the financial resources devoted to
to effectively compete in the creative economy, all 3 Ts have
                                                                                 research and development as a share
to work together. This is precisely what the GCI measures—
                                                                                 of total economic output;
the interaction of these 3 Ts—and as such it provides us with a
                                                                              2. the share of human resources devoted
powerful leading indicator of the key ingredients for long-term
                                                                                 to R&D, measured as the share of the
economic prosperity.
                                                                                 total labor force made up of researchers;
                                                                                 and
                                                                              3. patents granted per capita, the conven-
The GlobAl TeChnoloGy MAPs                                                       tional measure of innovation. If the first
                                                                                 two measure critical inputs to the pro-
Technology is a key factor in economic progress. From
                                                                                 cess of technology generation, the third
new inventions like software, robotics and biotechnology
                                                                                 is a measure of innovative output.
to improvements in manufacturing systems and processes,
technology makes economies and societies more efficient                     The Global R&D Investment Map (exhibit 1)
and productive.                                                             shows how nations stack up on research invest-




The global R&D investment map                                                                               Exhibit 1




                           Rank
                                                  10         20   30   40    50      60      70
                                      1st                                                          80th




4 | Creativity and Prosperity: The 2010 Global Creativity Index
Global Technology—Technion university, Israel
ment. Israel is in first place, followed by
                                                  After years of discussion and related activities and with Albert Ein-
Sweden, Finland, Japan, and Switzerland.
                                                  stein’s deep involvement, Technion University was founded in
The United States, South Korea, Germany,
                                                  1924 in Haifa, Israel. Its first graduating class was 16 students
Denmark, and France round out the top ten.
                                                  who majored in either Civil Engineering or Architecture. By 2010,
Canada ranks 13th.
                                                  Technion had awarded 90,604 degrees. Technion graduates
   We now turn to our second measure of
                                                  comprise the majority of Israeli-educated scientists and engi-
technology—The Global Researchers Map
                                                  neers and over 70% of the country’s founders and managers of
(exhibit 2), which measures researchers per
                                                  high-tech industries. Israel is home to the greatest concentration
capita. Now Finland takes top place, followed
                                                  of high-tech start up companies anywhere outside of the Silicon
by Sweden, Japan, Singapore, and Denmark
                                                  Valley—many started by Technion graduates. High-tech industry
to make up the top five. Norway, the United
                                                  now accounts for more than 54% of Israel’s industrial exports,
States, Australia, Canada, and New Zealand
                                                  and over 26% of the country’s total exports. Nine out of every
round out the top ten.
                                                  1,000 workers are engaged in R&D, nearly double the rate of the
   Our third measure of technology, The Global
                                                  United States and Japan. Seventy-four percent of managers in
Innovation Map (exhibit 3), assesses innova-
                                                  Israel’s electronic industries hold Technion degrees.
tive output, which we measure as patents per
capita. The United States takes first place,      http://www1.technion.ac.il/en/about




The global researchers map                                                                             Exhibit 2




                             Rank
                                             10     20         30        40         50
                                    1st                                                     60th




                                                                                             www.martinprosperity.org | 5
followed by Japan, Switzerland, Finland, and Israel. Sweden,                   The United States ranks third, finish-
Germany, Canada, Denmark and Hong Kong round out the                        ing sixth in R&D investment and seventh
top ten.                                                                    in researchers, but solidly in first place for
   The Global Technology Map (exhibit 4) puts all three of the              innovation. With its infrastructure for entre-
technology measures together to show how the world’s nations                preneurial venture capital finance in Silicon
stack up on an overall index of technology.                                 Valley and elsewhere, the United States has
   Finland takes the top spot overall, ranking first in researchers,        seen a long list of high-tech startups turn
third in R&D investment, and fourth in innovation. Home to                  into global giants, including Microsoft, Apple,
Nokia and many innovative small firms, Finland is an acknowl-               Google, and Yahoo.
edged leader in innovative communications technology.                          Israel’s fourth place rank might come as
   Japan takes second place, ranking fourth in R&D invest-                  a surprise to some, considering its small size,
ment, third in researchers, and second in innovation. Japanese              but it ranks first in R&D investment. Israel
companies have not only consistently pushed the technology                  has the highest concentration of engineers in
envelope, they have followed through, building reliable, sub-               the world—135 per 10,000 people, compared
sequent generations of products, from high quality cars to flat             to 85 per 10,000 people in the United States.
panel displays.                                                             A recent book by Dan Senor and Saul Singer,


The global innovation map                                                                                    Exhibit 3




                           Rank
                                                  10         20   30   40    50      60      70
                                      1st                                                           80th




6 | Creativity and Prosperity: The 2010 Global Creativity Index
Start-up Nation: The Story of Israel’s Eco-            The GlobAl TAlenT MAPs
nomic Miracle shows how Israel has pursued
a technology strategy based on launching new           We turn now to the second T, talent. There is a broad consensus
innovative firms [21].                                 that a country’s ability to generate, attract, and retain skilled
   Sweden takes fifth place and Switzerland,           people will be a key factor in its future economic success.
Denmark, Korea, Germany and Singapore                     We measure talent as a combination of two factors. The
round out the top ten. Canada ranks 11th.              first is the conventional measure of human capital based on
   While much has been made of the ascen-              educational attainment. The second is a measure of the Creative
dance of the BRIC countries—Brazil, Russia,            Class, which includes workers in fields such as technology,
and especially India and China—generally,              science, and engineering; business, management, and finance;
they do not rank highly on our technology              design and architecture; arts, culture, entertainment, and
measure. The highest ranking BRIC nation               media; law, healthcare, and education.
is Russia, in the 28th spot. China ranks 37 th,           We begin by looking at how nations stack up on the first of
about the same as Latvia and Bulgaria. Brazil          our talent measures, global human capital (exhibit 5), which
takes 48th place and India 49th, just behind           charts the level of educational attainment. Human capital is
Serbia and Croatia.                                    measured as the share of the population in the proper age group


The global technology map                                                                                  Exhibit 4




                      Rank
                                       10         20      30      40      50       60      70
                              1st                                                                80th




                                                                                                 www.martinprosperity.org | 7
Global Talent—singapore and higher education
        Singapore is home to five public universities: the National University of Singapore, Nanyang Technological
        University, Singapore Management University, the Singapore University of Technology and Design, and the
        Singapore Institute of Technology. Additionally, SIM University (UniSIM) provides university education to
        working professionals and adult learners.
        Singapore is also home to several specialized private universities. The University of Chicago Booth School
        of Business offers an Executive MBA. DigiPen Institute of Technology provides university education and
        training in game software engineering. ESSEC Business School is a major player in international manage-
        ment education. The German Institute of Science and Technology-TUM Asia is a subsidiary of Technische
        Universität München and provides a variety of engineering and technical degrees. The INSEAD-Wharton
        Alliance combines INSEAD’s resources with those of Wharton’s to deliver business education and research
        across a global learning network. The S P Jain Institute of Management & Research offers an Executive
        MBA programme and a Global MBA programme conducted jointly from both the campuses in Dubai and
        Singapore. At the Tisch School of the Arts Asia, students have the opportunity to earn a Master of Fine Arts.
        UNLV Singapore offers a fully accredited Bachelor of Science Degree in Hotel Administration as well as an
        Executive Masters Degree in Hospitality Administration.
        http://www.moe.gov.sg/education/post-secondary/




The global human capital map                                                                                Exhibit 5




                           Rank
                                                  10          20   30   40   50    60       70
                                       1st                                                         80th




8 | Creativity and Prosperity: The 2010 Global Creativity Index
that has engaged in tertiary education. While          in the Creative Class. Aside from Singapore, which takes the
Finland takes the top spot with 90.8 percent           top spot, and Australia in fourth place, the map is dominated
and South Korea takes second (89.8 percent),           by Scandinavian and Northern European nations: The Neth-
there are several surprises among the top              erlands (46.2 percent), Sweden (43.9 percent), Switzerland
ten, notably Greece in third place, Slovenia in        (44.8 percent), Belgium (43.8 percent), Denmark (43.7 percent),
ninth, and Latvia in tenth. New Zealand, Swe-          Finland (43.4 percent), Norway (42.1 percent), and Germany
den, the United States, Norway, and Denmark            (41.6 percent).
round out the top ten. Canada ranks 21st.                 Canada ranks 12th with 40.8 percent of its workforce in the
   The global Creative Class map (exhibit 6)           Creative Class. With 35 percent of its workforce in the Creative
illustrates how nations stack up on Creative           Class the United States ranks 27 th, just behind Slovakia and
Class membership. The range is quite large,            Hong Kong (both 35.2 percent). Of the BRICs, Russia ranks
from 47.3 percent on the high end to 2.4               highest at 20th (38.6 percent). Brazil is 57 th (18.5 percent), and
percent on the low end. Fourteen countries             China 75th (7.4 percent).
have 40 percent or more of their workforce                The global talent map (exhibit 7) shows how nations rank




The global Creative Class map                                                                               Exhibit 6




                     Rank
                                      10          20      30      40       50      60       70
                             1st                                                                  80th




                                                                                                  www.martinprosperity.org | 9
on our overall Talent Index. There are dramatic differences                       The GlobAl TolerAnCe MAPs
between this list and the global technology map. The Scandina-
vian countries are at the top with Finland and Sweden taking                      We now come to the third T, Tolerance.
first and second place; Denmark and Norway are in fourth and                      Courting divergent ideas and inputs isn’t
sixth place. Singapore ranks third, with New Zealand in fifth                     just a matter of political correctness—it’s
and Australia in seventh. The United States is eighth, just ahead                 an economic growth imperative. Openness
of Greece and Slovenia in the ninth and tenth spots. Canada                       to different types of people and different life-
ranks 17 th. Of the BRICs nations, Russia ranks highest at 13th,                  styles generally goes along with openness to
with Brazil in 66th, India in 75th, and China in 76th place.                      different cognitive styles. Places that welcome
                                                                                  diversity foster creativity.
                                                                                     We measure tolerance as a combination
                                                                                  of two variables, both taken from the Gallup
                                                                                  World Poll. The first is the percentage of re-
                                                                                  spondents who believe that the city or area
                                                                                  where they live is a good place for ethnic and
                                                                                  racial minorities to live. The second is the


The global talent map                                                                                               Exhibit 7




                       Rank
                                             10        20          30   40   50      60       70     80
                                 1st                                                                        90th




10 | Creativity and Prosperity: The 2010 Global Creativity Index
percentage that answers that the city or area     Sweden, South Africa, and Singapore (81 percent), United King-
where they live is a good place for gay and       dom (79 percent), and Uruguay and Hong Kong (77 percent).
lesbian people to live. Previous research has        We now turn to the global openness to gays and lesbians map
shown that openness to gays and lesbians is       (exhibit 9). The Netherlands takes the top spot, with 83 percent
associated with higher levels of both regional    of residents surveyed reporting their location is a good place for
and national economic performance [22, 23].       gay and lesbian people. Canada is second (77 percent), followed
   We begin with the global racial and            by Spain (75 percent). Ireland and Uruguay are next (both with
ethnic openness map (exhibit 8), which            70 percent). Belgium (67 percent), Australia and Sweden (66
charts national rankings on openness to           percent), Denmark (65 percent), and the United Kingdom (63
racial and ethnic minorities. Canada takes        percent) round out the top ten. The United States
first place, with 91 percent of its residents     is found in 12th place.
surveyed reporting that their location is            The global tolerance map (exhibit 10) plots how nations
open to racial and ethnic minorities. New         stack up on our overall Tolerance Index. Canada takes the top
Zealand takes second spot with 87 percent,        spot. Ireland ranks second. The Netherlands ranks third: it is
followed by Ireland (85 percent), Australia       the only country among the top five that is more open to gay
(84 percent), the United States (83 percent),     and lesbian people (83%) than to racial and ethnic minorities


The global racial and ethnic openness map                                                             Exhibit 8




                   Rank
                                    10       20    30      40       50      60      70
                            1st                                                            80th




                                                                                           www.martinprosperity.org | 11
The global openness to gays and lesbians map                                                        Exhibit 9




                             Rank
                                                   10          20   30   40   50   60   70
                                        1st                                                  80th




(73%). New Zealand ranks fourth, followed by nearby Austra-
lia in fifth place. Both have open immigration systems and
have made it a priority to attract foreign talent. For example,
Peter Jackson’s Park Road Post film studio in Wellington has
attracted not just movie makers but software experts, market-
ers, writers, musicians, and other creative people from all over
the world.
   Spain, where the Zapatero administration made tolerance
and openness a priority, is in sixth place, followed by Swe-
den. The United States ranks eighth, perhaps reflecting recent
increases in anti-immigrant sentiment and social conservatism
toward gays and lesbians. Uruguay is in ninth place and the
United Kingdom rounds out the top ten.




12 | Creativity and Prosperity: The 2010 Global Creativity Index
The global tolerance map                                                                                  Exhibit 10




                 Rank
                                 10       20     30       40      50      60      70      80
                        1st                                                                      90th




     Global Tolerance—uruguay
     Located in the southern part of South America on the Atlantic coast between Brazil and Argentina, Uruguay,
     among the smallest countries on the continent, has been dubbed “The Switzerland of South America.”
     It has earned this title for several reasons. The administrations of President Jose Batlle in the early 20th
     century established widespread political, social, welfare and economic reforms that established a socialist
     tradition. Its banking laws have many similarities to its Alpine cousin. The country has an eclectic society
     which showcases a rich European heritage, a broad variety of artistic and cultural attractions, and one of
     the most progressive educational systems in the region. While many Uruguayans identify themselves as
     “white,” their lineages include Spanish, Portuguese, Italian, Mestizo, Amerindian, and African-Uruguayan
     elements. Spanish is the official national language, although Portuguese, Brazilero (a Spanish-Portuguese
     mix), English, French, German, and Italian are spoken widely in the Montevideo metropolitan area. While
     representing less than 1% of the total population, Jews, mostly in Montevideo, make up one of the largest
     Jewish communities in South America. Half of the country’s population lives in Montevideo, and 92% of
     the country’s population is living in an urban area. Uruguay is popular among travelers from the Western
     Hemisphere and Europe.
     https://www.cia.gov/library/publications/the-world-factbook/geos/uy.html


                                                                                               www.martinprosperity.org | 13
The GlobAl CreATIvITy Index MAP—                                                     We have now seen how nations stack up
                                                                                  on each of the 3 Ts of economic development
brInG IT All ToGeTher                                                             and on the GCI. But how do these scores relate
                                                                                  to economic growth and competitiveness, and
We now bring it all together. The Global Creativity Index map
                                                                                  to broader measures of happiness, well-being,
(exhibit 11) combines all of the previous 3 T measures into
                                                                                  human development, and longer-run prosper-
one overarching metric of a nation’s long-term creativity and
                                                                                  ity? We turn to this issue next.
prosperity potential.
   Sweden takes first place overall, maintaining the top position
it held in the 2004 edition of the GCI. The United States takes
second place, improving its earlier fourth place finish. Finland
takes third place, followed by Denmark in fourth, Australia in
fifth, and New Zealand in sixth place. Canada takes seventh
place together with Norway. Singapore and the Netherlands
round out the top ten. Rounding out the top twenty are Belgium,
Ireland, the United Kingdom, Switzerland, France, Germany,
Spain, Taiwan, Italy, and Hong Kong. Israel ranks 25th. Of the
BRIC nations, Russia ranks highest on the GCI, at 31st, followed
by Brazil in 46th, India in 50th, and China in 58th place.


The Global Creativity Index map                                                                                   Exhibit 11




                            Rank
                                                  10        20     30   40   50        60     70     80
                                        1st                                                               90th




14 | Creativity and Prosperity: The 2010 Global Creativity Index
Top 25 overall Global Creativity Index rankings                                          Exhibit 12



  ToTal Rank       CounTRy                TeChnology   TalenT   ToleRanCe   global CReaTIvITy Index


       1           Sweden                         5      2          7                0.923

       2           United States                  3      8          8                0.902

       3           Finland                        1      1         19                0.894

       4           Denmark                        7      4         14                0.878

       5           Australia                      15     7          5                0.870

       6           New Zealand                    19     5          4                0.866

       7           Canada                         11    17          1                0.862

       7           Norway                         12     6         11                0.862

       9           Singapore                      10     3         17                0.858

      10           Netherlands                    17    11          3                0.854

      11           Belgium                        16    12         13                0.813

      12           Ireland                        20    21          2                0.805

      13           United Kingdom                 18    19         10                0.789

      14           Switzerland                    6     22         20                0.785

      15           France                         14    23         16                0.764

      15           Germany                        9     26         18                0.764

      17           Spain                          24    28          6                0.744

      18           Taiwan                         —     32         21                0.737

      19           Italy                          26    18         23                0.707

      20           Hong Kong                      22    37         12                0.691

      21           Austria                        13    30         35                0.663

      22           Greece                         38     9         37                0.638

      22           Slovenia                       23    10         51                0.638

      24           Serbia                         28    35         27                0.614

      24           Israel                         4     20         66                0.614




                                                                              www.martinprosperity.org | 15
section 2:
Toward sustainable Prosperity

16 | Creativity and Prosperity: The 2010 Global Creativity Index
The economic crisis has brought us face-to-face        •   Do more creative nations generate higher levels
with the fact that unbridled economic growth               of happiness for their residents?
does not necessarily equal sustainable pros-               To get at this we examine the relationship between
perity. Economists have been seeking fuller                the GCI and a comprehensive measure of global
frameworks and better metrics with which to                happiness or subjective well-being provided by the
evaluate the underpinnings as well as the path             Gallup Organization’s World Poll.
to longer-run, more sustainable prosperity.
This report is in line with this broader effort.
In that light, we now examine the relationships     The GCI And eConoMIC ouTPuT
between our measure of underlying creativity,
the GCI, and a series of measures of economic       Let’s begin with the relationship between global creativity
and social progress. We structure our inquiry       and the standard measure of economic output—gross domestic
around four key questions.                          product per capita. The figure below (exhibit 13) shows the cor-
                                                    relation between the GCI and each of the measures for the 3 Ts.
  •   Are more creative societies also
                                                       With a correlation of 0.84, the GCI is closely associated
      more productive and competitive?
                                                    with gross domestic product per capita. Of the 3 Ts, talent has
      Here we look at the association between
                                                    the strongest relationship to GDP (0.78), followed by technol-
      the GCI and standard measures of eco-
                                                    ogy (0.72), and tolerance (0.63). It is interesting that when the
      nomic output and competitiveness, like
                                                    three are combined in the GCI the correlation is considerably
      gross domestic product and the World
                                                    stronger (0.84). This shows how the 3 Ts work together and
      Economic Forum’s Global Competitive-
                                                    how nations scoring high in all three enjoy higher material
      ness Index.
                                                    standards of living.
  •   Are creative societies more or less              exhibit 14 shows the broad relationship between the GCI and
      equal than their counterparts?                gross domestic product per capita. The line fits extremely well;
      Here we look at the relationship              there are only a few extreme outliers at the top and the bottom
      between the GCI and measures of               of the chart. Clearly, the relationship between the GCI and gross
      socio-economic inequality.                    domestic product per capita is quite close.
                                                       Nations above the fitted line have higher gross domestic prod-
  •   Are more creative nations associated
                                                    uct per capita than their GCI scores would predict, while those
      with higher levels of human develop-
                                                    below the line have lower economic output than predicted. On
      ment more generally?
                                                    the one hand, the United States, Norway, Switzerland, Japan,
      Here we compare the GCI to a broad mea-
                                                    Hong Kong, the United Kingdom, Israel, Austria, Germany, and
      sure of human development, the United
                                                    Korea all have levels of gross domestic product per capita which
      Nation’s Human Development Index.
                                                    are slightly higher than their GCI scores would predict. On the
                                                    other hand, Canada, the Netherlands, Finland, Australia, and



The GCI and economic output (correlations)                                                                   Exhibit 13



                          Talent


                       Tolerance


                     Technology


          Global Creativity Index




                                    0.0       0.2            0.4            0.6             0.8               1.0

                                              Correlation with Economic Output (GDP per capita)




                                                                                                  www.martinprosperity.org | 17
New Zealand have levels of gross domestic product per capita                                                                    exhibit 15 shows the correlation between
 which are slightly lower than their GCI scores would seem                                                                    the Global Competitiveness Index and the
 to warrant. Perhaps more significantly, very low GCI scores                                                                  GCI, as well as each of our 3 T indices. The
 appear to be associated with even lower levels of economic out-                                                              GCI is closely associated with the Global Com-
 put per capita, as the cases of Nicaragua, Mongolia, Kyrgyzstan,                                                             petitiveness Index (with a correlation of 0.79).
 Uganda, and Madagascar indicate.                                                                                             The correlations are also substantial for each
                                                                                                                              of the 3 Ts—led by Technology (0.82), then
                                                                                                                              Talent (0.66), and Tolerance (0.59).
 The GCI And eConoMIC CoMPeTITIveness                                                                                            exhibit 16 shows the broad relationship
                                                                                                                              between the GCI and the Global Competitive-
 We now turn to the relationship between the GCI and a well-                                                                  ness Index. Though still fairly strong, the
 established measure of global competitiveness—the Global                                                                     relationship between the GCI and the Global
 Competitiveness Index developed by Harvard professor                                                                         Competiveness Index is not as pronounced as
 Michael Porter for the World Economic Forum. The Global                                                                      it is with gross domestic product per capita—
 Competitiveness Index is a comprehensive measure of overall                                                                  there is more “scatter” about the line. On the
 competitiveness and included factors associated with economic                                                                one hand, the United States, Singapore, Swit-
 output, innovation, efficiency, and business climate among                                                                   zerland, the United Kingdom, Japan, Hong
 others [24].                                                                                                                 Kong, Germany, and Denmark all perform



 The GCI and economic output                                                                                                                                                              Exhibit 14
                                                                                                         Estonia
                                                                                                    Lithuania                            Hong Kong
                                                                                                   Uruguay                              Austria                            Denmark
                                                                                                Argentina                          Greece                                  Norway
                                                                                                 Cyprus                          Israel                                Singapore
                  11.0                                                                  Chile
                                                                                                Poland             Portugal
                                                                                                                   Japan
                                                                                                                                                                   Netherlands
                                                                                                                                                                  Ireland
                                                                                   Slovakia                                                                Switzerland
                                                                                 Malaysia                                                                 Germany
                                                                                   Brazil
                                                                            South Africa
                                                                         Macedonia
                  10.0                                                  Kazakhstan
                                                                          Panama
                                                                        Romania
                                                          Trinidad and Tobago
                                              Saudi Arabia

                                                                     Mexico
                   9.0                                               Egypt
                                                                     Peru
                                                                  Turkey
Economic Output




                                                        Azerbaijan
                                                       Jamaica
                                                   Thailand
                                              El Salvador
                   8.0                             Iran
                                                                                                                                                                                                       Sweden
                                                                                                                                                                                                    United States
                                                                                                                                                                                                  Finland
                                                                                                                                                                                               Canada
                                            Paraguay                                                                                                                                          Australia
                                                                                                                                                                                             New Zealand
                         Indonesia                                                                                                                                                   Belgium
                   7.0                                                                                                                                                            United Kingdom
                                                                                         China                                                                                France
                                                             Honduras                   Armenia                                                                           Spain
                                                                                                                                                                  Italy
                                                                                                     Ukraine                                         Slovenia
                                                                                          India                                                  Republic of Korea
                                                                                     Philippines                                              Hungary
                   6.0                       Viet Nam                               Georgia                                                  Serbia
                                     Pakistan                                      Ecuador                                             Czech Republic
                                Cambodia                                         Bolivia                                             Latvia
                                                                               Sri Lanka                                           Russian Federation
                                                                           Kyrgyzstan                                            Croatia
                                                                        Uganda                                        Bulgaria
                   5.0                                               Mongolia                                      Nicaragua                                                        R 2 Linear = 0.701
                                                             Madagascar



                          0.0                            0.2                                0.4                                     0.6                                   0.8                              1.0

                                                                                                       Global Creativity Index


 Note: Economic Output measured as log of grossas log of gross domestic product per capita
              Note: Economic Output measured domestic product per capita.




 18 | Creativity and Prosperity: The 2010 Global Creativity Index
The GCI and global competitiveness (correlations)                                                                                                                                             Exhibit 15



                                                            Talent


                                                       Tolerance


                                                    Technology


                                     Global Creativity Index




                                                                       0.0                      0.2                      0.4                    0.6                          0.8                   1.0

                                                                                                    Correlation with Global Competitiveness Index




   The GCI and global competitiveness                                                                                                                                                            Exhibit 16
                                                                                                                     Republic of Korea
                                                                                                                           Hungary
                                                                                                                          Portugal
                                                                                                                         Japan
                                                                                                               Czech Republic
                                                                                                                     Estonia
                                                                                                   United Arab Emirates
                                                                                                         Costa Rica
                                                                                                           Lithuania
                                                                                                            Poland                                                                       Sweden
                                                                                                         Cyprus                                                                  United States
                               6.0                                                                         Chile
                                                                                                     Malaysia
                                                                                                                                                                                     Finland
                                                                                                                                                                                 Denmark
                                                                                               South Africa                                                                  Singapore
                                                                                                  Slovakia                                                                Netherlands
                                                                                                    Brazil                                                       Switzerland
                                                                                             India                                                         United Kingdom
                                                                                       Panama                                                                   Germany
                                                                                       China                                                                     France
                                                                                 Mexico                                                                      Taiwan
                                                                                 Egypt                                                             Hong Kong
                                                                            Sri Lanka                                                             Austria
                                                                              Peru
                                                                           Turkey
Global Competitiveness Index




                                                            Trinidad and Tobago
                               5.0                                 Thailand
                                                            Saudi Arabia




                                                                     Azerbaijan
                                     Indonesia
                                                                                                                                                                                                      Canada
                                                                                                                                                                                                    Australia
                                                 Viet Nam         El Salvador                                                                                                                      New Zealand
                                                                                                                                                                                                 Norway
                               4.0                                                                                                                                                          Belgium
                                                                                                                                                                                         Ireland
                                                                                                                                                                              Spain
                                                                                                              Ukraine                                                Italy
                                                                              Jamaica                  Romania                                              Israel
                                                                             Honduras                 Kazakhstan                                          Slovenia
                                                                                                     Macedonia                                          Greece
                                                                                                    Philippines                                    Serbia
                                                                                                  Georgia                                Russian Federation
                                                                                                 Armenia                              Latvia
                                                                                               Ecuador                               Croatia
                                                                                            Bolivia                                Uruguay
                                                 Pakistan                  Madagascar   Kyrgyzstan                                Bulgaria
                               3.0           Cambodia                   Paraguay       Uganda                                  Argentina                                                   R 2 Linear = 0.616
                                                                                      Mongolia                              Nicaragua



                                      0.0                               0.2                                0.4                              0.6                                    0.8                           1.0

                                                                                                                   Global Creativity Index




                                                                                                                                                                                   www.martinprosperity.org | 19
The GCI and entrepreneurship (correlations)                                                                             Exhibit 17



                                 Talent


                             Tolerance


                           Technology


             Global Creativity Index




                                          0.0               0.2           0.4             0.6            0.8             1.0

                                                                   Correlation with Entrepreneurship




better in terms of competitiveness than their GCI scores would
lead one to expect. Canada performs just slightly better than its
GCI scores predict. China and India both perform significantly                        The Global
better on competitiveness than their GCI scores suggest they
                                                                                      entrepreneurship Monitor
should. On the other hand, New Zealand, Ireland and Spain
perform lower on competitiveness than their GCI scores would                          The Global Entrepreneurship Monitor (GEM) is
seem to predict.                                                                      a not-for-profit academic research consortium
                                                                                      whose goal is making high quality information
                                                                                      on global entrepreneurial activity available to
The GCI And enTrePreneurshIP                                                          as wide an audience as possible. GEM is the
                                                                                      largest single study of entrepreneurial activity
Joseph Schumpeter long ago showed how innovation and                                  in the world. Started as a partnership between
entrepreneurship come together to set in motion the “creative                         London Business School and Babson Col-
destruction” that drives economies forward. Some 20 per-                              lege, it was initiated in 1999 with 10 countries.
cent of the Fortune 500 companies were founded in the last                            GEM 2010 is currently conducting research in
thirty years, including Google, Microsoft, Apple, and Amazon.                         59 countries. The research program, based
Entrepreneurship is an integral component and a key driver                            on a harmonized assessment of the level of
of economic growth and prosperity.                                                    national entrepreneurial activity for all partici-
   To get at this, we employ a new measure: the Global Entre-                         pating countries, involves exploring the role of
preneurship Index, which covers 54 nations worldwide [25].                            entrepreneurship in national economic growth.
The index shows the wide disparity in entrepreneurial activity                        Systematic differences continue, with few
across the nations of the world. Canada, Israel, and the United                       highly entrepreneurial countries reflecting low
States have the highest levels of entrepreneurial activity, while                     economic growth. There is, further, a wealth of
Denmark, Finland, France, Germany, and Japan have the low-                            national features and characteristics associ-
est. One in every twelve workers in the United States is involved                     ated with entrepreneurial activity. The program
in a start-up company, as compared to fewer than one in 67                            creates both individual national papers and
persons in Finland, according to the study.                                           an annual global report. Over 120 scholars and
   exhibit 17 shows the correlation between the Global Entre-                         researchers are actively participating in the
preneurship Index and the GCI as well as each of our 3 T indices.                     GEM project.
Of the 3 Ts, Talent has the strongest relationship to the Global
                                                                                      http://www.gemconsortium.org
Entrepreneurship Index (0.74), followed by Tolerance (0.71), and
Technology (with a weaker correlation of 0.55). The correlation




20 | Creativity and Prosperity: The 2010 Global Creativity Index
for the overall GCI (0.81) is the strongest,                            The GCI And InequAlITy
  again showing the combined strength of the
  3 Ts working together.                                                  We now turn to the relationship between global creativity and
     exhibit 18 shows the broad relationship                              inequality. Some would argue that the shift to a creative knowl-
  between the GCI and the Global Entrepre-                                edge-based economy exacerbates levels of inequality. High-
  neurship Index. The fit is good but there are a                         paying, family supporting manufacturing jobs have declined
  large number of countries above and below the                           and the labor market has split into higher-pay, higher-skill
  line. On the one hand, New Zealand, Australia,                          knowledge and professional jobs on the one hand, and lower-
  Sweden, Denmark, the United Kingdom, and                                pay, lower-skill service jobs on the other. A series of studies
  Hong Kong all perform better on the Global                              documents the growth in income inequality in the United
  Entrepreneurship Index than their GCI scores                            States. According to data from the Congressional Budget Office
  would predict. Canada is just slightly above                            released in June, 2010, average after-tax incomes for the top one
  the fitted line, while the United States, perhaps                       percent of American households rose by 281 percent between
  surprisingly, is just below it. On the other hand                       1979 and 2007. This compares to increases of 25 percent for the
  Germany, France, Belgium, and Singapore have                            middle fifth of households and 16 percent for the bottom fifth
  lower levels of entrepreneurial activity than                           (all figures are adjusted for inflation) [26].
  the GCI would predict.



  The GCI and entrepreneurship                                                                                                                         Exhibit 18


                                                                                                                                                     Sweden
                                                                                                                                     New Zealand
                                                                                                                                     Australia


                   0.8                                                                                                                        Finland
                                                                                                                                           Denmark
                                                                                                                                        Canada
                                                                                                                                    Netherlands
                                                                                                                                      Norway


                   0.7                                                                                                  Italy
                                                                                                               Hong Kong
                                                                                                                Austria
                                                                                                           Slovenia


                   0.6                                                                         Portugal
                                                                        United Arab Emirates                                                              United States
                                                                                   Latvia
                                                                                 Chile
                                                     Kazakhstan               Poland
                                                       Romania            Malaysia
                                                    Philippines
                   0.5                                   China
                                                     Mexico
                                                      Peru
Entrepreneurship




                                                                                                                                          Ireland
                                                                                                                                         United Kingdom
                   0.4                                                                                                                  Switzerland




                                                                                                                                           Belgium
                                                  Turkey
                                        Jamaica
                   0.3                                                                                                                 France
                                                                                                                                     Germany     Singapore
                                      Thailand                                                                                      Spain
                                     Iran                                                                                 Hungary
                                                                                                                       Greece
                         Indonesia                                                                                   Israel
                                                                                                                 Serbia
                   0.2                                                                                       Croatia
                                                                                                          Czech Republic
                                                                      Macedonia                       Japan
                                                                    Bolivia                       Uruguay
                                                                  Ecuador                       Argentina
                                                              Egypt                      South Africa
                   0.1                                     Uganda                     Brazil                                                    R 2 Linear = 0.658


                          0.0               0.2                           0.4                              0.6                       0.8                                  1.0

                                                                                  Global Creativity Index




                                                                                                                                      www.martinprosperity.org | 21
But is this the case across nations? Does increasing creativ-                 European countries, including Sweden, Den-
ity necessarily lead to increased economic inequality? To get                    mark, Finland, Norway, the Netherlands, and
at this, we examine the relationship between the GCI and a                       Germany. Japan is represented as well. Among
standard measure of income inequality—the Gini Index.                            the less developed nations, we find high levels
   exhibit 19 shows the relationships between income inequal-                    of inequality in South American nations like
ity and the GCI overall as well as each of the 3 T indices that                  Paraguay, Bolivia, Panama, Brazil, Honduras,
comprise it. While this may come as a surprise for those familiar                Ecuador, and Argentina. Of the BRIC nations,
with the case of the United States, we find that the GCI is in fact              China, Russia and particularily Brazil all ex-
systematically associated with lower levels of socio-economic                    hibit much higher levels of inequality than
inequality—and hence greater equality—across the nations of                      their GCI scores would predict.
the world.                                                                          There appears to be two distinct paths avail-
   Each and every one of the correlations between the GCI and                    able to high creative development: for every
the Gini is negative. The correlation between inequality and                     high-creativity, high-inequality nation there is
the overall GCI is −0.43. The Gini is also quite negatively asso-                a high-creativity, low-inequality counterpart.
ciated with Technology (−0.47) and Talent (−0.52) but much                       This is a likely reflection of these countries’
less so with Tolerance (−0.06 and not statistically significant).                differing levels of social welfare. Though more
This last is a bit surprising as one might expect more tolerant                  systematic study is needed before we can draw
societies to be more equal on balance. That said, we believe the                 any firm conclusions, this finding gives us rea-
overall finding of a negative association between creativity and                 son for optimism; at the same time, it suggests
inequality to be an important one, for it implies that the general               that sustainable, long-term prosperity requires
trajectory of economic development is associated with lower                      a significant investment in education and skill
levels of inequality.                                                            development. This is the topic to which we
   exhibit 20 is a scatter-graph which plots the association                     now turn.
between the Gini measure of income inequality and the GCI
for the nations of the world. The fit is not especially good and
there are lots of countries above and below the line. This sug-                  The GCI And huMAn
gests that there are two distinctive paths for high creativity
countries. On the one hand, there are countries like the United
                                                                                 develoPMenT
States, the United Kingdom, Singapore, and to a lesser extent,
                                                                                 What is the connection between creativity
Australia and New Zealand, where high levels of creativity,
                                                                                 and human development? To get at this,
productivity and economic competitiveness go hand in hand
                                                                                 we explore the association between the GCI
with higher levels of inequality. But there are also a substantial
                                                                                 and the United Nations’ Human Development
number of countries where high levels of creativity, competi-
                                                                                 Index [27]. “People often value achievements
tiveness and productivity combine with much lower low levels
                                                                                 that do not show up at all, or not immediately,
of inequality. These are largely Scandinavian and Northern



The GCI and inequality (correlations)                                                                             Exhibit 19



                                                                                      Talent


                                                                                      Tolerance


                                                                                      Technology


                                                                                      Global Creativity Index




                                −0.6               −0.4            −0.2         0.0

                                           Correlation with Income Inequality




22 | Creativity and Prosperity: The 2010 Global Creativity Index
The GCI and income inequality                                                                                                                                                               Exhibit 20


                                                                                  India
                                                                             Georgia
                                                                         Philippines                                                                                                  R 2 Linear = 0.185
                                                                           Panama
                                                                         Bolivia
                                                                       Ecuador
                                                                        China                                    Portugal
                    70                                          Peru                             Russian Federation
                                                            Mexico                                       Costa Rica
                                                           Uganda                                         Estonia
                                                           Turkey                                         Latvia
                                                   El Salvador                                        Uruguay
                                                   Honduras                                         Argentina
                                                 Paraguay                                    South Africa
                    60                                                                           Brazil
                                                                                                 Chile
Income Inequality




                                                                                                                                                                            United States
                                                                                                Nicaragua                         Greece                                     Australia
                                                                                               Malaysia
                                                     Jamaica                                                                     Israel                                New Zealand
                    50                           Madagascar                                                                                                              Singapore
                                                                                                                                                                         Canada
                                                                                                                                                                    Netherlands
                                                                                                                                                                 Ireland
                                                                                                                                                     United Kingdom
                                                                                                                                                         Switzerland
                                                                                                                                                          France
                    40                                                                                                                                   Spain
                                Cambodia                                                                                                           Italy




                                             Viet Nam                                       Kazakhstan
                    30                                                                     Armenia
                                                                                          Romania                                                                           Belgium
                                                                                  Egypt                                Croatia
                                      Pakistan                                  Kyrgyzstan                                                                        Germany
                                    Indonesia                                 Trinidad and Tobago                 Bulgaria                       Austria
                                                                             Mongolia                            Slovakia                    Slovenia                                         Sweden
                                                                          Sri Lanka                          Poland                    Hungary                                            Finland
                    20                                                  Azerbaijan                          Lithuania          Czech Republic                                           Denmark
                                                                       Thailand                          Ukraine             Japan                                                    Norway


                          0.0                              0.2                                 0.4                                  0.6                               0.8                              1.0

                                                                                                         Global Creativity Index


Note: Income Inequality measured as a Gini Index. a Gini Index
              Note: Income Inequality measured as




The GCI and human development (correlations)                                                                                                                                                Exhibit 21



                                                 Talent


                                           Tolerance


                                        Technology


                         Global Creativity Index




                                                          0.0                       0.2                        0.4                         0.6                  0.8                         1.0

                                                                                            Correlation with Human Development Index




                                                                                                                                                                        www.martinprosperity.org | 23
in income or growth figures,” wrote Mahub ul Haq, founder                                                                       significantly worse on Human Development
   of the UN Human Development Report [27]. The UN Human                                                                           Index than its GCI score would seem to war-
   Development Index takes a wide variety of human development                                                                     rant. Four less-developed nations—Cambodia,
   factors into account, from health conditions and life expectancy                                                                Pakistan, Madagascar, and Uganda—lag signif-
   to education levels and standards of living.                                                                                    icantly on Human Development when their
      exhibit 21 shows the associations between the Human                                                                          GCI score is taken into account.
   Development Index and the GCI, as well as each of the 3 T
   indices that comprise it. The overall GCI is closely associated
   with the Human Development Index (the correlation is 0.82).                                                                     The GCI And hAPPIness
   Since the Human Development Index includes a measure of
   education, we would expect it to be strongly associated with                                                                    This leads us to a final question: What is the
   our talent index (and it is, with a correlation of 0.83). But it                                                                relationship between global creativity and
   is also correlated with technology (0.63) and tolerance (0.57).                                                                 overall happiness? There is considerable
      exhibit 22 plots the GCI against the Human Development                                                                       ongoing debate concerning the relation-
   Index for the nations of the world. The fit is good, with outliers                                                              ship between economic development and
   mainly at the lower left hand quadrant of the graph—among                                                                       subjective well-being. Much of this debate
   the least developed nations of the world.                                                                                       has revolved around the effects of money
      The United States performs considerably less well on the                                                                     or material well-being on happiness. It was
   Human Development Index than its GCI score would predict;                                                                       initially found that the relationship between
   Canada performs slightly better. Of the BRICs, India performs                                                                   income and happiness only holds within, and



   The GCI and human development                                                                                                                                                       Exhibit 22


                                                                                                                                     Greece                               Australia
                                                                                                                                    Japan                                  Norway
                                                                                                                                  Israel                                Canada
                                                                                                                    Republic of Korea                             Netherlands
                                                                                                               Czech Republic                                     Ireland
                                                                                                                  Estonia                                 Switzerland
                          1.0                                                     Macedonia        United Arab Emirates                                    France
                                                                                   Romania                Lithuania                                       Spain
                                                                                  Panama                   Poland
                                                                              Kazakhstan                  Cyprus
                                                                                Mexico                 Slovakia
                                                                 Trinidad and Tobago                     Chile                                                                                Sweden
                                                                           Ecuador                 Malaysia                                                 Italy                         United States
                          0.9                                 Thailand       Peru                                                                        Hong Kong                       Finland
                                                             Jamaica     Turkey                                                                     Austria                            Denmark
                                                       Saudi Arabia                                                                             Slovenia                             New Zealand
                                                          Iran                                                                             Hungary                                 Singapore
                                                                                                                                                                             Belgium
                                                                                                                                                                         United Kingdom
Human Development Index




                          0.8                                                                                                                 Serbia
                                                                                                                                                                      Germany

                                            Viet Nam                                                                                       Portugal
                                Indonesia                                                                         Brazil            Latvia
                                                                                                             Ukraine              Russian Federation
                                                                                                  Armenia                        Costa Rica
                                                                                                Georgia                         Croatia
                          0.7                                                                 Philippines                     Uruguay
                                                                                            China                          Argentina
                                                                                          Bolivia                         Bulgaria
                                                                                         Egypt                       Nicaragua
                                                                                        Sri Lanka                  South Africa
                                                                                      Kyrgyzstan
                                                                                  Mongolia
                          0.6                                                 Azerbaijan
                                                                           El Salvador               India
                                                                        Honduras
                                                                      Paraguay
                                           Pakistan
                                       Cambodia
                          0.5

                                                                                Uganda
                                                                      Madagascar


                          0.4                                                                                                                                                    R 2 Linear = 0.666


                                 0.0                              0.2                                0.4                                0.6                            0.8                                1.0

                                                                                                              Global Creativity Index




   24 | Creativity and Prosperity: The 2010 Global Creativity Index
The GCI and happiness (correlations)                                                                                                                                                Exhibit 23



                                                             Talent


                                                        Tolerance


                                                     Technology


                                      Global Creativity Index




                                                                       0.0                    0.2                      0.4                      0.6                       0.8

                                                                                                Correlation with Life Satisfaction




  The GCI and happiness                                                                                                                                                               Exhibit 24


                    9.0
                                                                             Panama
                                                                           Romania                                                                                          Denmark
                                                                      Kazakhstan                                                                                           Finland
                                                                           Mexico                                                                                        Norway
                                                                       Ecuador                                                                                      Netherlands
                    8.0                                 Trinidad and Tobago                                                                                     Ireland
                                                                   Bolivia                                                                              Switzerland
                                                                   Peru
                                                               Turkey                                            Portugal            Austria    United Kingdom
                                                        Thailand                                        Czech Republic
                                                       Jamaica                                             Costa Rica           Greece
                    7.0                          Saudi Arabia                                 United Arab Emirates            Israel            Italy

                                                                                                  Cyprus                                                                                    Sweden
                                                                                                  Brazil                                                                                United States
Life Satisfaction




                                                                                             Malaysia

                                                    El Salvador                              Poland
                    6.0               Viet Nam
                                                    Honduras                                  Chile
                                                 Paraguay                                                                                                      France
                                                                                                                                                              Germany
                                                                                                                                                             Spain
                                                     Iran
                                                                                                                                                          Taiwan
                                                                                                                                                  Hong Kong                        Singapore
                          Indonesia
                                                                                                                                            Japan                                Australia
                    5.0                                                                                                                   Slovenia                              New Zealand
                                                                                                                                        Republic of Korea                      Canada
                                                                                                                                      Hungary                                 Belgium
                                                                                              India                                  Serbia
                                                                                          China                             Croatia
                                                                                         Armenia                           Russian Federation
                                                                                        Philippines                     Estonia
                    4.0               Pakistan
                                                                                      Macedonia                        Latvia
                                                                                     Georgia                         Uruguay
                                  Cambodia                                        Egypt                            Argentina
                                                                                Sri Lanka                         Lithuania
                                                                              Kyrgyzstan                         Slovakia
                                                                             Uganda                             Nicaragua
                                                                           Mongolia                           Bulgaria
                    3.0                                               Azerbaijan                         South Africa
                                                                                                                                                                              R 2 Linear = 0.551
                                                                  Madagascar                            Ukraine


                           0.0                              0.2                              0.4                               0.6                                 0.8                                  1.0

                                                                                                      Global Creativity Index




                                                                                                                                                                    www.martinprosperity.org | 25
not across countries, the so-called “Easterlin effect” [28]. More
recent econometric studies by Angus Deaton [29] and Betsey
Stevenson and Justin Wolfers [30], based on new data collect-
ed worldwide by the Gallup Organization, have challenged this
view, finding that income exerts strong effects on happiness
across the board. Carol Graham seeks to square this analyti-
cal circle, calling attention to the paradox of the “happy peasant
and the miserable millionaire,” suggesting that while people
can adapt to be happy at low levels of income, they are far less
happy when there is uncertainty over their future wealth [31,
32]. Some have gone so far as to suggest that life satisfaction
and well-being be utilized to supplement more conventional
measures of economic output like Gross Domestic Product.
John Helliwell [33, 34], Joseph Stiglitz [1], Ed Diener [35], and
Rafael Di Tella and Robert MacCulloch [36], among others, have
made the case for a measure of Gross National Happiness.
   We examine the relationship between the GCI and a compre-
hensive measure of happiness and life-satisfaction collected by
the Gallup Organization’s World Poll [37]. The World Poll covers
roughly 150 nations and measures life satisfaction using a stan-
dard set of core questions which ask individuals to rank their
satisfaction with aspects of their life in real time.
   exhibit 23 shows the associations between well-being or life
satisfaction and the overall GCI as well as the 3 T indices that
comprise it. Life satisfaction is approximately equally related to
all 3 Ts, with only a slightly stronger relation to Tolerance
(0.66), followed by Talent (0.65) and Technology (0.65). The
overall GCI is closely associated with life satisfaction (a correla-
tion of 0.74). Once again, we note that the association is consid-
erably stronger when the 3 Ts are combined into the overall GCI
measure. This again illustrates the power of the 3 Ts working
together to condition higher levels of life satisfaction and well-
being.
   exhibit 24 plots the GCI against life satisfaction. The fit is
reasonably good, with outliers mainly at the bottom quadrants
of the graph—that is, among the less developed nations. The
relationship between the GCI and life satisfaction is strongest
among the more advanced nations. Denmark, Finland, the
Netherlands, Ireland, Switzerland, New Zealand, and Canada
have higher levels of life satisfaction than their GCI scores
would predict. The United States has a level of life satisfac-
tion that is roughly in line with its GCI score. Singapore, the
United Kingdom, Taiwan, Hong Kong, and Korea have lower
levels of life satisfaction than their GCI scores would predict.
Among the BRICs, Brazil has a significantly higher level of life
satisfaction than its GCI score would predict, while Russia’s is
considerably lower. Both India and China have lower levels of
life satisfaction than the GCI would predict.




26 | Creativity and Prosperity: The 2010 Global Creativity Index
ConClusIon                                          Creative Class makes up only 7.4 percent of China’s workforce.
                                                       Our measures of global creativity are also closely associated
                                                    with both established and alternative metrics of economic and
                                                    social progress. Nations which score high on the GCI have higher
                                                    levels of economic output, entrepreneurship, and overall econo-
                                                    mic competitiveness. Nations that invest in creativity and that
                                                    achieve on the 3 Ts of economic development also have higher
                                                    levels of human development, life satisfaction, and happiness.
                                                       Our study also helps us better understand the relationship
                                                    between creativity, economic progress, and inequality. Nations
In the wake of the economic crisis of 2008,
                                                    which score high on the GCI have on balance greater levels of
economists have been rethinking conventional
                                                    equality. While some countries, like the United States and the
conceptions of economic growth—not only how
                                                    United Kingdom, achieve high GCI scores alongside relatively
best to measure it but what exactly it is. Though
                                                    high levels of inequality, in general elevated levels of global
the challenges of job creation and the restora-
                                                    creativity are associated with lower levels of inequality. This
tion of competitiveness remain high on most
                                                    suggests that the old notion that it is large disparities in income
policy-makers’ agendas, broader questions
                                                    that create the incentives and motivations that drive economic
about how best to foster long-run, sustainable
                                                    progress is no longer valid; at the same time it outlines a high-
prosperity while addressing the issue of eco-
                                                    road path to prosperity, where the fruits of economic progress
nomic inequality are also of vital importance.
                                                    are broadly shared. Looking forward, sustained economic prog-
   To get at this, we have examined 82 nations
                                                    ress can no longer tolerate the waste of human talent, but must
through the lens of the Global Creative Index
                                                    increasingly turn on the full development of each and every
(GCI), which reflects three key factors that
                                                    human being.
shape long-run economic prosperity: Technol-
ogy, Talent, and Tolerance. Then we system-
atically examined the relationship between
the GCI and a series of measures of economic
and social progress, including conventional
measures of economic output and competi-
tiveness and broader measures of inequality,
human development, and happiness.
   Sweden takes first place on the GCI. The
United States is second, followed by Finland,
Denmark, and Australia. Canada ranks eighth.
New Zealand, Norway, Singapore, and the
Netherlands round out the top ten. There have
been some notable changes in rankings since
our initial version of the GCI in 2004. Though
Sweden retains its place at the top of the list,
the United States has moved up to the second
position from fourth, Australia has moved from
twelfth to fifth, New Zealand from 18th to sixth,
and Canada from 11th to eighth.
   What’s most notable is that four of the top
ten positions are occupied by Scandinavian
countries. Australia and New Zealand, which
have made attracting talent a priority, have
dramatically improved their positions as well.
   Despite their rapid economic rise, the BRIC
nations still do not crack the upper tiers on the
GCI: Russia ranks 31st, Brazil 46th, India 50th,
and China 58th. The creative class, a key force
in economic growth, makes up more than 40
percent of the work force in 40 nations. Of the
BRIC, only Russia comes close, with 38.6 per-
cent of its workforce in the Creative Class. The



                                                                                              www.martinprosperity.org | 27
APPendIx




                 MeThodoloGy, vArIAbles, And dATA
                 The data in this report cover 82 nations for the period 2000 to 2009. Note that we use different years
                 for different variables, and sometimes utilize running averages, depending on data availability. The
                 following describes the main variables and data sources used in this report.


                 TeChnoloGy
                 We use three variables for technology: R&D investment, research, and innovation.


                 Global r&d investment
                 This measures R&D spending as a share of GDP. It is adapted from World Development Indicators
                 of the World Bank. It is defined as “current and capital expenditures on creative work undertaken
                 systematically to increase the stock of knowledge, including knowledge of humanity, culture, and
                 society, and the use of knowledge to devise new applications. R&D covers basic research, applied
                 research, and experimental development.”


                 Global researchers
                 This variable measures professional researchers engaged in R&D per million capita. It is adapted
                 from World Development Indicators and covers the years 2000 to 2005. Professional researchers
                 are defined as “professionals engaged in conceiving of or creating new knowledge, products, processes,
                 methods, and systems and in managing projects concerned. Postgraduate students at the doctoral
                 level (ISCED97 level 6) engaged in R&D are considered researchers.”
                    The World Development Indicators are published by The World Bank on a yearly basis. The data
                 is reported for 127–146 different countries depending on the year. However, since countries do not
                 always report on an annual basis, we use averages for several years. This results in higher numbers
                 of observations and also smoothes out extreme values. [38].


                 Global innovation
                 This variable measures patents granted per capita. It is adapted from the United States Patent and
                 Trademark Office (USPTO) and covers the years 2001–2008. US patents are a reasonable proxy for
                 global innovation as inventors from around the world file for patent protection in the United States
                 and the USPTO tracks inventors’ national origins. We count the number of granted US patents for
                 each nation in the world. [39].




28 | Creativity and Prosperity: The 2010 Global Creativity Index
The technology index
The Technology Index combines all three of these variables in a single measure. The overall Technol-
ogy Index is based on a principal component analysis, where the correlations between the overall
index and the three constituent measures are as follows: Global R&D Investment (0.878), Global
Researchers (0.894), and Global Innovation (0.943) with patents per capita. In other words, the over-
all technology score is based on the value for each sub-variable, and not its ranking. We estimate the
index for countries with missing values by running regressions based on the variables for which we do
have values. The R2s for these regressions are as follows: 0.535 for Global R&D Investment, 0.588 for
Global Researchers, and 0.702 for Global Innovation.


TAlenT
We employ two measures of talent: human capital and Creative Class population.


human capital
The human capital variable is based on the standard measure of educational attainment. Specifically
we use data on the rate of enrollment in tertiary or post-high school education from the World Devel-
opment Indicators. The data is reported to the UNESCO Institute by national education agencies.
Tertiary education is defined as “a wide range of post-secondary education institutions, including
technical and vocational education, colleges, and universities, whether or not leading to an advanced
research qualification, that normally require as a minimum condition of admission the successful
completion of education at the secondary level.” The data cover the years 2004 and 2006 and are
based on annual school surveys, normally conducted in the beginning of the year, and do not therefore
reflect dropouts or actual attendance.


Creative Class
The creative class variable is based on data from the International Labour Organization [40] and covers
the years 2004–2007. It is calculated as the share of a country’s labor force that is engaged in a higher
degree of problem solving in their everyday work. It includes occupations such as computer science and
mathematics; architecture, engineering; life, physical, and the social sciences; education, training, and
library science; arts and design work, entertainment, sports, and media; and professional and knowl-
edge work occupations in management, business and finance, law, sales management, and healthcare.


The talent index
The Talent Index combines these two variables in a single index which is based on a principal component
analysis, where the correlations are 0.872 for the Creative Class variable and the Human Capital vari-
able respectively. In other words, the overall talent score is based on the value for each sub-variable and
not its ranking. We estimate missing values through a regression analysis, which generates an R2 value
of 0.501.



                                                                                               www.martinprosperity.org | 29
TolerAnCe
                 We employ two measures of tolerance; both are from the Gallup Organization’s World Poll. [37]


                 Tolerance toward ethnic and racial minorities
                 The survey asks “Is your city or area a good or bad place to be in for ethnic and racial minorities?”
                 Our variable scores the share of the respondents who said their place is a good place. The value is
                 for the year 2009.


                 Tolerance toward gays and lesbians
                 The survey asks “Is your city or area a good or bad place to be in for gay and lesbian people?” Our
                 variable scores the share of the respondents who said their place is a good place. Again, the value
                 is for the year 2009.
                    The Gallup World Poll survey is based on approximately 1,000 interviews per country (adjusted
                 depending on population size) which are conducted in approximately 150 countries. The sample
                 represents roughly 95 percent of the world’s adult population and is stratified proportionally, with the
                 distribution of the population across cities and rural areas of different sizes. (For more information
                 about the sampling procedure, see: http://www.gallup.com/consulting/worldpoll/108082/Sampling.
                 aspx). The target population is all civilian, non-institutionalized, and ages 15 years or older. For more
                 information about the methodology, see: http://www.gallup.com/consulting/worldpoll/108079/
                 Methodological-Design.aspx).
                    These tolerance measures differ from those used in the earlier version of the Global Creativity
                 Index that was presented in Richard Florida’s The Flight of the Creative Class [8], which were based
                 on variables from the World Values Survey. The new measures represent an improvement across two
                 dimensions. First and foremost, the newly available Gallup World Poll data provides a better, more
                 direct measure of tolerance. And second, the World Poll data covers a larger number of countries.
                 That said, these two sets of variables are closely correlated. Our Gallup World Poll measure of Racial
                 and Ethnic Tolerance is correlated at .501 with our earlier tolerance measure, while the Gallup Gay
                 and Lesbian Tolerance measure is correlated at 0.822 with our earlier measure.


                 The tolerance index
                 The Tolerance Index is based on the two measures above. The two are equally weighted into a factor
                 where both correlate at 0.92. We estimate missing values based on a regression analysis, which gener-
                 ates an R2 value of 0.432.


                 The GlobAl CreATIvITy Index
                 To create the final Global Creativity Index, we constructed the talent, technology and tolerance
                 variable based on principle component analysis. In other words, each of the scores are based on
                 the actual performance and not the rank of each individual variable. We thereafter ranked each of
                 the 3 T variables, with the highest number to the best performer. We added the ranks together and
                 divided by three. In the case where we had a value for just two of the three variables, these two were
                 added and divided by two. To get the Global Creativity Index score, the average score of the 3 Ts were
                 divided by the number of observations overall.




30 | Creativity and Prosperity: The 2010 Global Creativity Index
eConoMIC And soCIAl ProGress MeAsures
We employ the following measures of economic and social progress in our analysis.


economic output /GdP per capita
We employ the conventional measure of economic output: GDP per capita. The data are from World
Development Indicators for the year 2005. [38].


Global competitiveness index
We use the Global Competitiveness Index developed by Michael Porter for the World Economic Forum.
It is based on the following categories: basic requirements (including institutions, infrastructure, mac-
roeconomic stability, and health and primary education), efficiency enhancers (including higher edu-
cation and training, goods market efficiency, labor market efficiency, financial market sophistication,
technological readiness, and market size), and innovation factors (including business sophistication
and innovation). [24].


Global entrepreneurship index
This variable is based on the Global Entrepreneurship Index developed by Zoltan Acs and Laszlo
Szerb. The index consists of several measures of entrepreneurial attitudes, activity, and aspiration,
and covers the years 2004–2008. [25].


Income inequality
This variable is based on the standard measure of an Income Inequality—a Gini Index. The Gini
Index measures the distribution of incomes in a nation, ranging from 0 to 100 where 0 represents
absolute equality and 100 absolute inequality. This variable is from the World Bank’s World Develop-
ment Indicators for the year 2007 [38].


human development index
This variable is based on the United Nations Human Development Index, a composite measure which
aims to capture three dimensions of human development: health and measured life expectancy, edu-
cation level, and standard of living. We employ the 2009 index, which is based on data from 2007 [27].


happiness/ life satifaction
This variable is from the Gallup Organization’s 2009 Gallup World Poll. It is representative of 95
percent of the world population, and is based on telephone surveys and face-to-face interviews which
pose this question: “Please imagine a ladder with steps numbered from 0 at the bottom to ten at the
top. Suppose we say that the top of the ladder represents the best possible life for you, and the bottom
represents the worst possible life for you. On which step of the ladder would you say you personally
feel you stand at this time, assuming that the higher the step the better you feel about your life, and
the lower the step the worse you feel about it? Which step comes closest to the way you feel?” Our
variable is the national average rank of life satisfaction [37].




                                                                                              www.martinprosperity.org | 31
Global technology rankings*                                                                                      Appendix A



                     COUNTRY                     R&D INVESTMENT    RESEARCHERS   INNOVATION   TECHNOLOGY INDEX

                     Finland                               3            1            4               1
                     Japan                                 4            3            2               2
                     United States                         6            7            1               3
                     Israel                                1           —             5               4
                     Sweden                                2            2            6               5
                     Switzerland                           5           11            3               6
                     Denmark                               9            5            9               7
                     Republic of Korea                     7           16            —               8
                     Germany                               8           13            7               9
                     Singapore                            11            4           11               10
                     Canada                               13            9            8               11
                     Norway                               18            6           18               12
                     Austria                              12           14           13               13
                     France                               10           15           16               14
                     Australia                            17            8           17               15
                     Belgium                              14           17           15               16
                     Netherlands                          16           18           12               17
                     United Kingdom                       15           —            14               18
                     New Zealand                          25           10           20               19
                     Ireland                              23           19           19               20
                     Russian Federation                   22           12           36               21
                     Hong Kong                            41           26           10               22
                     Slovenia                             20           22           22               23
                     Spain                                29           21           23               24
                     Czech Republic                       21           27           26               25
                     Italy                                27           34           21               26
                     Estonia                              33           20           30               27
                     Serbia                               19           —            59               28
                     Croatia                              24           28           31               29
                     China                                26           39            —               30
                     Lithuania                            36           23           34               31
                     Portugal                             35           24           35               32
                     Hungary                              32           30           24               33
                     Ukraine                              28           —            50               34
                     Uganda                               30           —            72               35
                     Slovakia                             44           25           39               36
                     Poland                               45           29           44               37
                     Greece                               39           32           33               38
                     Latvia                               47           31           42               39
                     Bulgaria                             46           33           41               40




32 | Creativity and Prosperity: The 2010 Global Creativity Index
COUNTRY                        R&D INVESTMENT             RESEARCHERS            INNOVATION          TECHNOLOGY INDEX

    Brazil                                   31                       43                   46                      41
    India                                    38                       36                   27                      42
    Costa Rica                               51                       —                    28                      43
    Azerbaijan                               55                       —                    65                      44
    South Africa                             34                       46                   32                      45
    Armenia                                  61                       —                    51                      46
    Georgia                                  62                       —                    45                      47
    Chile                                    40                       41                   55                      48
    Romania                                  50                       35                   52                      49
    Kyrgyzstan                               65                       —                    66                      50
    Turkey                                   37                       44                   54                      51
    Philippines                              68                       —                    56                      52
    Trinidad and Tobago                      69                       —                    40                      53
    Malaysia                                 42                       45                   25                      54
    Argentina                                48                       37                   37                      55
    Peru                                     70                       —                    61                      56
    Jamaica                                  73                       —                    49                      57
    Honduras                                 76                       —                    64                      58
    Cyprus                                   53                       40                   29                      59
    Kazakhstan                               60                       38                   63                      60
    Macedonia                                56                       42                   62                      61
    Mexico                                   49                       49                   —                       62
    Uruguay                                  59                       47                   48                      63
    Thailand                                 58                       48                   47                      64
    Panama                                   52                       54                   53                      65
    Bolivia                                  57                       53                   67                      66
    El Salvador                              —                        57                   60                      67
    Viet Nam                                 64                       52                   70                      68
    Sri Lanka                                67                       51                   58                      69
    Madagascar                               63                       59                   71                      70
    Paraguay                                 71                       55                   69                      71
    Ecuador                                  72                       58                   57                      72
    Pakistan                                 66                       56                   —                       73
    Indonesia                                74                       50                   —                       74
    Cambodia                                 75                       60                   —                       75


*missing values for countries: Egypt, Iran, Mongolia, Nicaragua, Saudi Arabia, Taiwan, and United Arab Emirates.




                                                                                                                   www.martinprosperity.org | 33
Global talent rankings                                                                                       Appendix B



                                COUNTRY                      HUMAN CAPITAL   CREATIVE CLASS   TALENT INDEX

                                Finland                            1               8               1
                                Sweden                             5               5               2
                                Singapore                          —               1               3
                                Denmark                            8               7               4
                                New Zealand                        4              14               5
                                Norway                             7               9               6
                                Australia                          12              4               7
                                United States                      6              27               8
                                Greece                             3              29               9
                                Slovenia                           9              22              10
                                Netherlands                        24              2              11
                                Belgium                            22              6              12
                                Russian Federation                 13             20              13
                                Latvia                             10             23              14
                                Estonia                            16             15              15
                                Lithuania                          11             28              16
                                Canada                             21             12              17
                                Italy                              18             16              18
                                United Kingdom                     23             11              19
                                Israel                             26             13              20
                                Ireland                            25             19              21
                                Switzerland                        35              3              22
                                France                             27             17              23
                                Republic of Korea                  2              51              24
                                Hungary                            20             24              25
                                Germany                            31             10              26
                                Ukraine                            14             31              27
                                Spain                              15             34              28
                                Poland                             19             30              29
                                Austria                            32             21              30
                                Czech Republic                     33             18              31
                                Taiwan                             —              33              32
                                Slovakia                           46             25              33
                                Portugal                           28             41              34
                                Serbia                             —              38              35
                                Argentina                          17             62              36
                                Hong Kong                          50             26              37
                                Bulgaria                           41             35              38
                                Croatia                            39             37              39
                                Kazakhstan                         30             42              40
                                Egypt                              48             32              41
                                Costa Rica                         —              43              42



34 | Creativity and Prosperity: The 2010 Global Creativity Index
COUNTRY                HUMAN CAPITAL   CREATIVE CLASS   TALENT INDEX

Cyprus                      47              36              43
Bolivia                     45               —              44
Japan                       29              63              45
Uruguay                     42              49              46
Macedonia                   53              39              47
Georgia                     43              50              48
United Arab Emirates        —               47              49
Malaysia                    51              40              50
Mongolia                    38              54              51
Panama                      37              65              52
Kyrgyzstan                  44              60              53
Chile                       34              67              54
Sri Lanka                   —               53              55
Thailand                    36              68              56
Saudi Arabia                56              44              57
Ecuador                     —               55              58
Turkey                      52              52              59
Jamaica                     —               61              60
Armenia                     54               —              61
Peru                        49              64              62
Romania                     40              72              63
Philippines                 55              59              64
Mexico                      58              58              65
Brazil                      60              57              66
Azerbaijan                  66              45              67
South Africa                65              48              68
Nicaragua                   —               69              69
Trinidad and Tobago         67              46              70
Iran                        59              66              71
Paraguay                    57              70              72
El Salvador                 62              71              73
Pakistan                    69              56              74
India                       68               —              75
China                       61              75              76
Honduras                    63              73              77
Viet Nam                    64              74              78
Uganda                      71               —              79
Indonesia                   —               76              80
Cambodia                    70              77              81
Madagascar                  72              78              82




                                                                  www.martinprosperity.org | 35
Global Creative Class rankings                                                                     Appendix C



                                         RANK          COUNTRY              CREATIVE CLASS SHARE

                                            1          Singapore                   47.30
                                            2          Netherlands                 46.24
                                            3          Switzerland                 44.84
                                            4          Australia                   44.52
                                            5          Sweden                      43.88
                                            6          Belgium                     43.84
                                            7          Denmark                     43.71
                                            8          Finland                     43.35
                                            9          Norway                      42.11
                                           10          Germany                     41.57
                                           11          United Kingdom              41.27
                                           12          Canada                      40.84
                                           13          Israel                      40.21
                                           14          New Zealand                 40.11
                                           15          Estonia                     39.64
                                           16          Italy                       39.26
                                           17          France                      39.24
                                           18          Czech Republic              38.89
                                           19          Ireland                     38.84
                                           20          Russian Federation          38.63
                                           21          Austria                     37.49
                                           22          Slovenia                    37.06
                                           23          Latvia                      35.47
                                           24          Hungary                     35.26
                                           25          Slovakia                    35.22
                                           26          Hong Kong                   35.22
                                           27          United States               35.22
                                           28          Lithuania                   34.99
                                           29          Greece                      32.62
                                           30          Poland                      32.37
                                           31          Ukraine                     31.70
                                           32          Egypt                       31.38
                                           33          Taiwan                      31.34
                                           34          Spain                       30.98
                                           35          Bulgaria                    29.07
                                           36          Cyprus                      29.00
                                           37          Croatia                     28.85
                                           38          Serbia                      28.57
                                           39          Macedonia                   28.36
                                           40          Malaysia                    26.21




36 | Creativity and Prosperity: The 2010 Global Creativity Index
RANK   COUNTRY                CREATIVE CLASS SHARE

 41    Portugal                      25.28
 42    Kazakhstan                    24.77
 43    Costa Rica                    24.60
 44    Saudi Arabia                  23.15
 45    Azerbaijan                    22.67
 46    Trinidad and Tobago           22.55
 47    United Arab Emirates          22.02
 48    South Africa                  21.71
 49    Uruguay                       21.62
 50    Georgia                       21.40
 51    Republic of Korea             21.30
 52    Turkey                        20.96
 53    Sri Lanka                     19.51
 54    Mongolia                      19.40
 55    Ecuador                       19.04
 56    Pakistan                      18.59
 57    Brazil                        18.52
 58    Mexico                        18.48
 59    Philippines                   18.41
 60    Kyrgyzstan                    18.40
 61    Jamaica                       18.32
 62    Argentina                     18.29
 63    Japan                         17.54
 64    Peru                          17.51
 65    Panama                        16.77
 66    Iran                          15.61
 67    Chile                         14.90
 68    Thailand                      14.66
 69    Nicaragua                     14.49
 70    Paraguay                      12.43
 71    El Salvador                   12.37
 72    Romania                       11.76
 73    Honduras                       9.44
 74    Viet Nam                       7.41
 75    China                          7.37
 76    Indonesia                      4.30
 77    Cambodia                       2.52
 78    Madagascar                     2.36




                                                     www.martinprosperity.org | 37
Global tolerance rankings*                                                                                       Appendix D


                                                       RACIAL AND ETHNIC
                          COUNTRY                                          GAYS AND LESBIANS   TOLERANCE INDEX
                                                          MINORITIES

                          Canada                                   1              2                   1
                          Ireland                                  3              5                   2
                          Netherlands                              16             1                   3
                          New Zealand                              2              12                  4
                          Australia                                4              8                   5
                          Spain                                    14             3                   6
                          Sweden                                   7              8                   7
                          United States                            5              12                  8
                          Uruguay                                  11             5                   9
                          United Kingdom                           9              10                 10
                          Norway                                   16             12                 11
                          Hong Kong                                11             16                 12
                          Belgium                                  21             6                  13
                          Denmark                                  21             9                  14
                          South Africa                             7              21                 15
                          France                                   30             14                 16
                          Singapore                                7              34                 17
                          Germany                                  25             17                 18
                          Finland                                  27             18                 19
                          Switzerland                              39             16                 20
                          Taiwan                                   13             37                 21
                          Brazil                                   —              21                 22
                          Italy                                    30             19                 23
                          Nicaragua                                21             27                 24
                          Cyprus                                   23             —                  25
                          Costa Rica                               25             27                 26
                          Serbia                                   13             49                 27
                          Chile                                    36             24                 28
                          Malaysia                                 30             —                  29
                          India                                    16             52                 30
                          Argentina                                45             23                 31
                          Ecuador                                  33             31                 32
                          Portugal                                 39             29                 33
                          Hungary                                  33             34                 34
                          Austria                                  —              31                 35
                          Mexico                                   52             23                 36
                          Greece                                   41             31                 37
                          United Arab Emirates                     41             —                  38
                          Panama                                   44             37                 39
                          Madagascar                               18             65                 40
                          Philippines                              62             25                 41
                          Sri Lanka                                21             67                 42


38 | Creativity and Prosperity: The 2010 Global Creativity Index
RACIAL AND ETHNIC
    COUNTRY                                     GAYS AND LESBIANS   TOLERANCE INDEX
                               MINORITIES

    Trinidad and Tobago            27                  55                 43
    Romania                        33                  54                 44
    Bulgaria                       —                   42                 45
    Croatia                        41                  47                 46
    El Salvador                    55                  34                 47
    Macedonia                      30                  57                 48
    Czech Republic                 64                  27                 49
    Armenia                        49                  —                  50
    Slovenia                       55                  39                 51
    Bolivia                        49                  42                 53
    Peru                           49                  42                 53
    Paraguay                       58                  39                 54
    Slovakia                       52                  44                 55
    Honduras                       47                  52                 56
    Kazakhstan                     36                  67                 57
    Poland                         60                  47                 58
    Uganda                         36                  70                 59
    Latvia                         58                  54                 60
    Japan                          62                  47                 61
    Republic of Korea              52                  62                 62
    Georgia                        43                  72                 63
    Turkey                         58                  62                 64
    Kyrgyzstan                     47                  71                 65
    Israel                         72                  40                 66
    Thailand                       66                  50                 67
    Iran                           65                  —                  68
    Estonia                        70                  47                 69
    Viet Nam                       64                  59                 70
    Jamaica                        58                  68                 71
    Azerbaijan                     —                   70                 72
    Mongolia                       68                  57                 73
    Russian Federation             68                  62                 74
    Lithuania                      72                  59                 75
    Egypt                          72                  —                  76
    Ukraine                        74                  62                 77
    Indonesia                      70                  73                 78
    Saudi Arabia                   75                  —                  79
    Cambodia                       77                  62                 80
    Pakistan                       76                  —                  81


*missing value for China.




                                                                               www.martinprosperity.org | 39
Overall Global Creativity Index rankings                                                                Appendix E


                                                                                                    GLOBAL
          TOTAL RANK            COUNTRY                       TECHNOLOGY   TALENT   TOLERANCE   CREATIVITY INDEX

                 1              Sweden                             5         2          7            0.923
                 2              United States                      3         8          8            0.902
                 3              Finland                            1         1         19            0.894
                 4              Denmark                            7         4         14            0.878
                 5              Australia                          15        7          5            0.870
                 6              New Zealand                        19        5          4            0.866
                 7              Canada                             11        17         1            0.862
                 7              Norway                             12        6         11            0.862
                 9              Singapore                          10        3         17            0.858
                10              Netherlands                        17       11          3            0.854
                11              Belgium                            16       12         13            0.813
                12              Ireland                            20       21          2            0.805
                13              United Kingdom                     18       19         10            0.789
                14              Switzerland                        6        22         20            0.785
                15              France                             14       23         16            0.764
                15              Germany                            9        26         18            0.764
                17              Spain                              24       28          6            0.744
                18              Taiwan                             —        32         21            0.737
                19              Italy                              26       18         23            0.707
                20              Hong Kong                          22       37         12            0.691
                21              Austria                            13       30         35            0.663
                22              Greece                             38        9         37            0.638
                22              Slovenia                           23       10         51            0.638
                24              Serbia                             28       35         27            0.614
                24              Israel                             4        20         66            0.614
                26              Hungary                            33       25         34            0.606
                27              Republic of Korea                  8        24         62            0.598
                28              Portugal                           32       34         33            0.577
                29              Czech Republic                     25       31         49            0.553
                30              Japan                              2        45         61            0.541
                30              Russian Federation                 21       13         74            0.541
                32              Costa Rica                         43       42         26            0.528
                32              Estonia                            27       15         69            0.528
                34              Latvia                             39       14         60            0.520
                35              Croatia                            29       39         46            0.516
                36              United Arab Emirates               —        49         38            0.513
                37              Uruguay                            63       46          9            0.500
                38              Argentina                          55       36         31            0.484
                38              Lithuania                          31       16         75            0.484
                40              Bulgaria                           40       38         45            0.480
                41              Slovakia                           36       33         55            0.476
                41              Poland                             37       29         58            0.476



40 | Creativity and Prosperity: The 2010 Global Creativity Index
GLOBAL
TOTAL RANK   COUNTRY               TECHNOLOGY   TALENT   TOLERANCE   CREATIVITY INDEX

   43        Nicaragua                 —          69        24             0.474
   44        Cyprus                    59         43        25             0.463
   45        South Africa              45         68        15             0.459
   46        Brazil                    41        66         22             0.455
   47        Chile                     48        54         28             0.451
   48        Malaysia                  54        50         29             0.439
   49        Ukraine                   34        27         77             0.419
   50        India                     42        75         30             0.382
   51        Panama                    65        52         39             0.346
   51        Romania                   49        63         44             0.346
   51        Macedonia                 61        47         48             0.346
   54        Philippines               52        64         41             0.341
   54        Armenia                   46        61         50             0.341
   54        Kazakhstan                60        40         57             0.341
   57        Georgia                   47        48         63             0.337
   58        China                     30        76         —              0.327
   59        Ecuador                   72        58         32             0.321
   60        Bolivia                   66        44         53             0.319
   61        Mexico                    62        65         36             0.317
   62        Egypt                     —         41         76             0.316
   63        Sri Lanka                 69        55         42             0.305
   63        Trinidad and Tobago       53        70         43             0.305
   65        Kyrgyzstan                50        53         65             0.297
   66        Peru                      56        62         53             0.287
   67        Uganda                    35        79         59             0.276
   68        Turkey                    51        59         64             0.272
   69        Mongolia                  —         51         73             0.270
   70        Azerbaijan                44        67         72             0.236
   71        El Salvador               67        73         47             0.220
   71        Thailand                  64        56         67             0.220
   73        Jamaica                   57        60         71             0.215
   74        Honduras                  58        77         56             0.203
   75        Madagascar                70        82         40             0.199
   76        Saudi Arabia              —         57         79             0.191
   77        Paraguay                  71        72         54             0.179
   78        Iran                      —         71         68             0.171
   79        Viet Nam                  68        78         70             0.102
   80        Pakistan                  73        74         81             0.053
   81        Indonesia                 74        80         78             0.037
   82        Cambodia                  75        81         80             0.020




                                                                     www.martinprosperity.org | 41
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                                                   www.martinprosperity.org | 43
Creativity global index report martin inst. sep 2011
Acknowledgments




oUR teAm                      contAct Us
                              Phone: (416) 673-8580
                              Fax: (416) 673-8599
Authors                       Email: info@martinprosperity.org

Richard Florida               Martin Prosperity Institute
Charlotta Mellander           Joseph L. Rotman School of Management
Kevin Stolarick               University of Toronto
                              MaRS Centre, Heritage Building
                              101 College Street, Suite 420
Project team                  Toronto, Ontario, Canada M5G 1L7

Patrick Adler                 Richard Florida, Director
Vasiliki Bednar
Maggie Chen
Marisol D’Andrea
Mark Denstedt
Michelle Hopgood
Brian Hracs
Karen King
Dieter Kogler
Zara Matheson
Joe Minichini
Kim Ryan
Kim Silk
Kevin Stolarick
Ian Swain
Jacqueline Whyte Appleby




Design by michelle Hopgood.
Maps by Zara matheson.
Martin Prosperity Institute © January 2011
ISBN 978-0-9811974-3-2

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Creativity global index report martin inst. sep 2011

  • 2. The Martin Prosperity Institute (MPI) is the world’s leading think-tank on the role of sub-national factors—location, place, and city-regions— in global economic prosperity. It takes an integrated view of prosperity, looking beyond traditional economic measures to include the importance of quality of place and the development of people’s creative potential. AbouT The AuThors richard Florida is director of the Martin Prosperity Institute and professor of business and creativity at the Rotman School of Management, University of Toronto (florida@rotman.utoronto.ca). Charlotta Mellander is research director of the Prosperity Institute of Scandinavia, Jönköping International Business School (charlotta.mellander@ihh.hj.se). Kevin stolarick is research director of the Martin Prosperity Institute, Rotman School of Management, University of Toronto (kevin.stolarick@rotman.utoronto.ca). Kimberly silk helped with sourcing and references. Zara Matheson produced the maps. Michelle hopgood designed the graphics.
  • 3. Creativity and Prosperity: The Global Creativity Index Martin Prosperity Institute January 2011
  • 4. exhIbITs Exhibit 1 The global R&D investment map 4 Exhibit 2 The global researchers map 5 Exhibit 3 The global innovation map 6 Exhibit 4 The global technology map 7 Exhibit 5 The global human capital map 8 Exhibit 6 The global Creative Class map 9 Exhibit 7 The global talent map 10 Exhibit 8 The global racial and ethnic openness map 11 Exhibit 9 The global openness to gays and lesbians map 12 Exhibit 10 The global tolerance map 13 Exhibit 11 The Global Creativity Index map 14 Exhibit 12 Top 25 overall Global Creativity Index rankings 15 Exhibit 13 The GCI and economic output (correlations) 17 Exhibit 14 The GCI and economic output 18 Exhibit 15 The GCI and global competitiveness (correlations) 19 Exhibit 16 The GCI and global competitiveness 19 Exhibit 17 The GCI and entrepreneurship (correlations) 20 Exhibit 18 The GCI and entrepreneurship 21 Exhibit 19 The GCI and inequality (correlations) 22 Exhibit 20 The GCI and income inequality 23 Exhibit 21 The GCI and human development (correlations) 23 Exhibit 22 The GCI and human development 24 Exhibit 23 The GCI and happiness (correlations) 25 Exhibit 24 The GCI and happiness 25 Appendix A Global technology rankings 32 Appendix B Global talent rankings 34 Appendix C Global Creative Class rankings 36 Appendix D Global tolerance rankings 38 Appendix E Overall Global Creativity Index rankings 40 ii | Creativity and Prosperity: The 2010 Global Creativity Index
  • 5. ConTenTs executive summary iv Introduction 1 Part 1: The Global Creativity Index rankings 2 Creativity and the 3 Ts of economic development 3 The global technology maps 4 The global talent maps 7 The global tolerance maps 10 The Global Creativity Index 14 Part 2: Creativity and sustainable Prosperity 16 Global creativity and economic output 17 Global creativity and economic competitiveness 18 Global creativity and global entrepreneurship 20 Global creativity and economic inequality 21 Global creativity and human development 22 Global creativity and happiness 24 Conclusion 27 Appendix 28 Methodology, variables, and data 28 Global technology rankings 32 Global talent rankings 34 Global Creative Class rankings 36 Global tolerance rankings 38 Overall Global Creativity Index rankings 40 references 42 Acknowledgments 45 www.martinprosperity.org | iii
  • 6. exeCuTIve suMMAry The economic crisis has challenged popular conceptions of economic growth, both in terms of what it is and how to measure it. While engendering growth and bolstering competitiveness remain high on the agenda, immediate attention has shifted to creating jobs, lifting wages, addressing inequality, and fostering long-term, sustainable prosperity. This new edition of the Global Creativity Index (GCI), which we first introduced in 2004, provides a powerful lens through which to assess these issues. The GCI assesses the prospects for sustainable prosperity across 82 nations according to a com- bination of underlying economic, social, and cultural factors that we refer to as the 3 Ts of economic development—Technology, Talent, and Tolerance. It also compares the GCI to a series of other metrics of competitiveness and prosperity—from conventional measures of economic growth to alternative measures of economic equality, human development, and happiness and well-being. Our key findings are as follows: overall ranking: Sweden takes first place on the GCI, maintaining the top position it held in our 2004 edition. The United States takes second place, improving its earlier fourth place finish. Finland takes third place, followed by Denmark in fourth, Australia in fifth, and New Zealand in sixth. Canada takes seventh place together with Norway; Singapore and the Netherlands round out the top ten. Despite their rapid economic rise, the BRIC nations still do not crack the upper tiers of the GCI: Russia ranks 31st, Brazil 46th, India 50th, and China 58th. Creative Class: The Creative Class—made up of workers in fields spanning science and technology, business and management, healthcare and education, and arts, culture, and entertainment—is a driving force in economic growth. The Creative Class makes up 40 percent or more of the workforce in 14 nations. Singapore has the highest creative ranking, followed by the Netherlands, Switzerland, Australia, Swe- den, Belgium, Finland, Norway, and Germany. Canada ranks 12th, with 40.84 percent of its workforce in the Creative Class, and the United States ranks 27 th, with 34.99 percent. Technology: Technology is a key factor in economic progress. From new inventions like software, robotics, and biotechnology to improvements in manufacturing systems and processes, technology makes econo- mies and societies more efficient and productive. We assess technological capacity through three measures: research and development spending, R&D workforce, and patented innovations. Finland takes the top spot in technology, followed by Japan in second place, the United States in third, Israel in fourth, and Sweden in fifth. Canada ranks 11th. iv | Creativity and Prosperity: The 2010 Global Creativity Index
  • 7. Talent: There is a broad consensus that the ability to generate, attract, and retain skilled and enterprising people—talent—is essential to sustained economic success. We measure a country’s talent as a com- bination of two factors: its average levels of educational attainment and the percentage of its work- force in the Creative Class. Scandinavian countries leap to the top, with Finland and Sweden taking first and second place, Denmark in fourth, and Norway sixth. Singapore ranks third, with New Zealand in fifth and Australia in seventh. The United States is eighth, just ahead of Greece and Slovenia in the ninth and tenth spots. Canada ranks 17 th. Tolerance: Tolerance is the third key factor in economic growth and prosperity. The ability to attract both talent and technology turns on openness to new ideas and openness to people. We measure tolerance as a combination of two variables, based on Gallup surveys of openness to ethnic and racial minorities and openness to gays and lesbians. Canada takes the top spot, followed by Ireland, the Netherlands, New Zealand, and Australia. Spain, Sweden, the United States, Uruguay and the United Kingdom round out the top ten. Creativity and Prosperity: We compared the 3 Ts metrics and the GCI to established measures of economic and social progress. The GCI is closely associated with conventional measures of economic output and economic competi- tiveness. And it is also associated with broader measures of human development and life satisfaction or happiness. Nations that score better on the 3 Ts not only have higher levels of economic output but also higher levels of human development and happiness. We also find that the GCI is associated with greater economic equality—nations which score higher on the GCI have less inequality. Our find- ings suggest that there are two distinct paths available to greater economic competitiveness. On the one hand, there are nations like the United States and the United Kingdom, where higher levels of economic output and competitiveness occur alongside higher levels of inequality. On the other hand, there are a greater number of nations like Sweden and Norway, where high levels of economic output and competitiveness occur alongside far greater equality. This suggests a high-road path to sustain- able prosperity, where the fruits of economic progress are broadly shared. www.martinprosperity.org | v
  • 9. InTroduCTIon to social inclusion, public health, and sustainable transporta- tion—providing a more robust gauge of economic and social progress. As our economy begins its slow recovery from its gravest crisis in generations, it’s essential that we seek not just to hasten the return of short term growth but to lay the founda- tions for sustainable, long-term prosperity. Our research takes up this effort to broaden both our under- standing and our measures of economic and social well-being. The first part of this report presents our rankings of 82 nations on the GCI, which takes three main classes of economic inputs The economic crisis has challenged popular into account: Technology, Talent and Tolerance (described in conceptions of economic growth. Fueled by greater detail below). We also examine the relationship of these overly risky financial speculation and outright three classes of factors and the overall index to a series of mea- chicanery at times, the pursuit of short-term sures of economic and social progress, ranging from conven- profits led some of the world’s most advanced tional measures of economic growth and competitiveness to and affluent economies to the brink of collapse broader measures of economic equality, human development, and to the prospect of years, possibly decades, and subjective well-being. Our methodology, data sources, and of intractable unemployment and stagnation. variables are laid out in detail in the appendix to this report. We learned the proverbial hard way that the unbridled pursuit of economic growth does not always go hand in hand with rising living standards. While engendering growth and bol- stering competitiveness remain on the agenda, attention has shifted to creating jobs, lifting wages, addressing inequality and fostering long-run, sustainable prosperity. This latest edition of the Global Creativity Index (GCI) addresses these challenges head- on, helping to shift the dialogue from a nar- row focus on competitiveness and growth to a broader focus on creativity, prosperity and well-being. Our research is part of a broader challenge to the way we understand economic growth and development. Over the past decade or so, a growing number of students of econo- mic progress have concluded that we need to improve the frameworks, language and metrics that we use to gauge society’s overall wealth, and that we need better measurements of hu- man development, well-being, and happiness. One notable high-level effort was under- taken by French President Nicolas Sarkozy’s blue-ribbon Commission on the Measurement of Economic Performance and Social Progress. Chaired by the Nobel Prize winning econo- mists Joseph E. Stiglitz and Amartya Sen, the commission’s report challenged conventional measures of economic growth and develop- ment [1]. “What you measure affects what you do,” noted Stiglitz at the release of the commis- sion’s report. ”If we have the wrong metrics, we will strive for the wrong things.” [1] The commission proposed a range of additional measures of social and economic well-being— from socioeconomic development, sustainable consumption, production, and development, www.martinprosperity.org | 1
  • 10. section 1: The Global Creativity Index rankings 2 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 11. CreATIvITy And The Technology 3 Ts oF eConoMIC Long recognized as a key driver of wealth and progress, technology is the first essential factor. Karl Marx and later develoPMenT Joseph Schumpeter recognized that advances in technology are what enable capitalism to constantly revolutionize itself [4, 9]. “Capitalism not only never is but never can be stationary,” Schumpeter wrote in 1942, as the Great Depression transi- tioned into a full-blown war economy [9]. In the late 1950s, Robert Solow devised a mathematical formula to capture technology’s role as a driving force in economic growth, for which he received the Nobel Prize in economics [10]. Following Adam Smith, classical economists Talent identified three key factors of production as Talent is the second key factor. Starting in the 1960s, Peter the foundations of economic development: Drucker and Fritz Malchup detailed the economic importance land, labor, and capital [2–4]. But physical of knowledge [11, 12]. Knowledge workers not only invent new factors alone no longer determine progress in machines that turn out old products more efficiently—they today’s modern, advanced economies, where come up with completely new products that create whole new factors like technology, innovation, knowl- markets. Paul Romer’s theory of endogenous growth, with its edge, and human capital play much greater corollary that investment in R&D and education yield tangible roles. Underpinning all of them is the role of returns over the long term, formalized this phenomenon [13]. creativity. Economic growth and development The generation of new knowledge thus becomes the key driver turns on harnessing human creativity across of economic growth. While knowledge is something that can be the entire spectrum of innovation through codified, creativity and the creation of new ideas, knowledge, production—from the creation of new tech- and technologies comes from people. Economists agree that nologies and new firms to new and improved skilled, ambitious, and entrepreneurial people—who they refer processes, more efficient manufacturing and to as “human capital”—are a central force in economic progress production systems, and increasing effective- today [14–16]. ness in the delivery of services. Creativity differs in a fundamental way from more traditional, tangible factors of Tolerance production like land or raw materials: it is Tolerance is the third factor in the ranking of economic prog- not a stock of things that can be depleted or ress. While most economists tend to see technology and talent worn out, but an infinitely renewable resource as stocks of endowments, the reality is that they are flows. The that can be constantly improved. Everyone is ability to identify the economic and non-economic factors that potentially creative. Our future progress and account for these flows is essential to an understanding of eco- prosperity depends not just on the efforts of a nomic progress. People are not forever-wedded to one place; privileged knowledge elite but on how well we they can and do move around. The technology and talent that can unleash the creativity of each and every they bring with them are mobile factors, and accordingly flow human being. into and out of cities and regions and nations. Creativity is mobile and portable—people can and do move. But, it is almost always as- New ideas are generated most efficiently in places where dif- sociated with specific places, as Jane Jacobs ferent cognitive styles are tolerated—and different cognitive has shown [5, 6]. Places—countries, cities, styles are linked to demographic diversity, as economist Scott regions—bring together the key inputs from Page has shown [17]. Openness to diversity is also in line with diverse groups of people to the firms and the broad cultural shift from materialist values about money institutions that shape economic and social and things to newer “post-materialist” values, which favor self- progress. For these reasons, place has come expression and a wider quest for happiness and well-being, to replace the corporation as the key economic as identified by Ronald Inglehart [18–20]. Tolerance—open- and social organizing unit of our time. ness to diversity—provides an additional source of economic The GCI offers a new, more unified way advantage which works alongside technology and talent. The to assess the key inputs that drive long-term places that are most open to new ideas and that attract talented economic prosperity based on what we have and creative people from across the globe broaden both their elsewhere dubbed the “3 Ts of economic devel- technology and talent capabilities, thereby gaining a substantial opment,” Technology, Talent and Tolerance economic edge. [7, 8]. www.martinprosperity.org | 3
  • 12. The 3 Ts of economic development work together in mutually We assess national technological capacity reinforcing ways. Any one “T” is a necessary but in itself insuffi- through the use of three measures: cient condition for economic success. For a nation or region 1. the financial resources devoted to to effectively compete in the creative economy, all 3 Ts have research and development as a share to work together. This is precisely what the GCI measures— of total economic output; the interaction of these 3 Ts—and as such it provides us with a 2. the share of human resources devoted powerful leading indicator of the key ingredients for long-term to R&D, measured as the share of the economic prosperity. total labor force made up of researchers; and 3. patents granted per capita, the conven- The GlobAl TeChnoloGy MAPs tional measure of innovation. If the first two measure critical inputs to the pro- Technology is a key factor in economic progress. From cess of technology generation, the third new inventions like software, robotics and biotechnology is a measure of innovative output. to improvements in manufacturing systems and processes, technology makes economies and societies more efficient The Global R&D Investment Map (exhibit 1) and productive. shows how nations stack up on research invest- The global R&D investment map Exhibit 1 Rank 10 20 30 40 50 60 70 1st 80th 4 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 13. Global Technology—Technion university, Israel ment. Israel is in first place, followed by After years of discussion and related activities and with Albert Ein- Sweden, Finland, Japan, and Switzerland. stein’s deep involvement, Technion University was founded in The United States, South Korea, Germany, 1924 in Haifa, Israel. Its first graduating class was 16 students Denmark, and France round out the top ten. who majored in either Civil Engineering or Architecture. By 2010, Canada ranks 13th. Technion had awarded 90,604 degrees. Technion graduates We now turn to our second measure of comprise the majority of Israeli-educated scientists and engi- technology—The Global Researchers Map neers and over 70% of the country’s founders and managers of (exhibit 2), which measures researchers per high-tech industries. Israel is home to the greatest concentration capita. Now Finland takes top place, followed of high-tech start up companies anywhere outside of the Silicon by Sweden, Japan, Singapore, and Denmark Valley—many started by Technion graduates. High-tech industry to make up the top five. Norway, the United now accounts for more than 54% of Israel’s industrial exports, States, Australia, Canada, and New Zealand and over 26% of the country’s total exports. Nine out of every round out the top ten. 1,000 workers are engaged in R&D, nearly double the rate of the Our third measure of technology, The Global United States and Japan. Seventy-four percent of managers in Innovation Map (exhibit 3), assesses innova- Israel’s electronic industries hold Technion degrees. tive output, which we measure as patents per capita. The United States takes first place, http://www1.technion.ac.il/en/about The global researchers map Exhibit 2 Rank 10 20 30 40 50 1st 60th www.martinprosperity.org | 5
  • 14. followed by Japan, Switzerland, Finland, and Israel. Sweden, The United States ranks third, finish- Germany, Canada, Denmark and Hong Kong round out the ing sixth in R&D investment and seventh top ten. in researchers, but solidly in first place for The Global Technology Map (exhibit 4) puts all three of the innovation. With its infrastructure for entre- technology measures together to show how the world’s nations preneurial venture capital finance in Silicon stack up on an overall index of technology. Valley and elsewhere, the United States has Finland takes the top spot overall, ranking first in researchers, seen a long list of high-tech startups turn third in R&D investment, and fourth in innovation. Home to into global giants, including Microsoft, Apple, Nokia and many innovative small firms, Finland is an acknowl- Google, and Yahoo. edged leader in innovative communications technology. Israel’s fourth place rank might come as Japan takes second place, ranking fourth in R&D invest- a surprise to some, considering its small size, ment, third in researchers, and second in innovation. Japanese but it ranks first in R&D investment. Israel companies have not only consistently pushed the technology has the highest concentration of engineers in envelope, they have followed through, building reliable, sub- the world—135 per 10,000 people, compared sequent generations of products, from high quality cars to flat to 85 per 10,000 people in the United States. panel displays. A recent book by Dan Senor and Saul Singer, The global innovation map Exhibit 3 Rank 10 20 30 40 50 60 70 1st 80th 6 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 15. Start-up Nation: The Story of Israel’s Eco- The GlobAl TAlenT MAPs nomic Miracle shows how Israel has pursued a technology strategy based on launching new We turn now to the second T, talent. There is a broad consensus innovative firms [21]. that a country’s ability to generate, attract, and retain skilled Sweden takes fifth place and Switzerland, people will be a key factor in its future economic success. Denmark, Korea, Germany and Singapore We measure talent as a combination of two factors. The round out the top ten. Canada ranks 11th. first is the conventional measure of human capital based on While much has been made of the ascen- educational attainment. The second is a measure of the Creative dance of the BRIC countries—Brazil, Russia, Class, which includes workers in fields such as technology, and especially India and China—generally, science, and engineering; business, management, and finance; they do not rank highly on our technology design and architecture; arts, culture, entertainment, and measure. The highest ranking BRIC nation media; law, healthcare, and education. is Russia, in the 28th spot. China ranks 37 th, We begin by looking at how nations stack up on the first of about the same as Latvia and Bulgaria. Brazil our talent measures, global human capital (exhibit 5), which takes 48th place and India 49th, just behind charts the level of educational attainment. Human capital is Serbia and Croatia. measured as the share of the population in the proper age group The global technology map Exhibit 4 Rank 10 20 30 40 50 60 70 1st 80th www.martinprosperity.org | 7
  • 16. Global Talent—singapore and higher education Singapore is home to five public universities: the National University of Singapore, Nanyang Technological University, Singapore Management University, the Singapore University of Technology and Design, and the Singapore Institute of Technology. Additionally, SIM University (UniSIM) provides university education to working professionals and adult learners. Singapore is also home to several specialized private universities. The University of Chicago Booth School of Business offers an Executive MBA. DigiPen Institute of Technology provides university education and training in game software engineering. ESSEC Business School is a major player in international manage- ment education. The German Institute of Science and Technology-TUM Asia is a subsidiary of Technische Universität München and provides a variety of engineering and technical degrees. The INSEAD-Wharton Alliance combines INSEAD’s resources with those of Wharton’s to deliver business education and research across a global learning network. The S P Jain Institute of Management & Research offers an Executive MBA programme and a Global MBA programme conducted jointly from both the campuses in Dubai and Singapore. At the Tisch School of the Arts Asia, students have the opportunity to earn a Master of Fine Arts. UNLV Singapore offers a fully accredited Bachelor of Science Degree in Hotel Administration as well as an Executive Masters Degree in Hospitality Administration. http://www.moe.gov.sg/education/post-secondary/ The global human capital map Exhibit 5 Rank 10 20 30 40 50 60 70 1st 80th 8 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 17. that has engaged in tertiary education. While in the Creative Class. Aside from Singapore, which takes the Finland takes the top spot with 90.8 percent top spot, and Australia in fourth place, the map is dominated and South Korea takes second (89.8 percent), by Scandinavian and Northern European nations: The Neth- there are several surprises among the top erlands (46.2 percent), Sweden (43.9 percent), Switzerland ten, notably Greece in third place, Slovenia in (44.8 percent), Belgium (43.8 percent), Denmark (43.7 percent), ninth, and Latvia in tenth. New Zealand, Swe- Finland (43.4 percent), Norway (42.1 percent), and Germany den, the United States, Norway, and Denmark (41.6 percent). round out the top ten. Canada ranks 21st. Canada ranks 12th with 40.8 percent of its workforce in the The global Creative Class map (exhibit 6) Creative Class. With 35 percent of its workforce in the Creative illustrates how nations stack up on Creative Class the United States ranks 27 th, just behind Slovakia and Class membership. The range is quite large, Hong Kong (both 35.2 percent). Of the BRICs, Russia ranks from 47.3 percent on the high end to 2.4 highest at 20th (38.6 percent). Brazil is 57 th (18.5 percent), and percent on the low end. Fourteen countries China 75th (7.4 percent). have 40 percent or more of their workforce The global talent map (exhibit 7) shows how nations rank The global Creative Class map Exhibit 6 Rank 10 20 30 40 50 60 70 1st 80th www.martinprosperity.org | 9
  • 18. on our overall Talent Index. There are dramatic differences The GlobAl TolerAnCe MAPs between this list and the global technology map. The Scandina- vian countries are at the top with Finland and Sweden taking We now come to the third T, Tolerance. first and second place; Denmark and Norway are in fourth and Courting divergent ideas and inputs isn’t sixth place. Singapore ranks third, with New Zealand in fifth just a matter of political correctness—it’s and Australia in seventh. The United States is eighth, just ahead an economic growth imperative. Openness of Greece and Slovenia in the ninth and tenth spots. Canada to different types of people and different life- ranks 17 th. Of the BRICs nations, Russia ranks highest at 13th, styles generally goes along with openness to with Brazil in 66th, India in 75th, and China in 76th place. different cognitive styles. Places that welcome diversity foster creativity. We measure tolerance as a combination of two variables, both taken from the Gallup World Poll. The first is the percentage of re- spondents who believe that the city or area where they live is a good place for ethnic and racial minorities to live. The second is the The global talent map Exhibit 7 Rank 10 20 30 40 50 60 70 80 1st 90th 10 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 19. percentage that answers that the city or area Sweden, South Africa, and Singapore (81 percent), United King- where they live is a good place for gay and dom (79 percent), and Uruguay and Hong Kong (77 percent). lesbian people to live. Previous research has We now turn to the global openness to gays and lesbians map shown that openness to gays and lesbians is (exhibit 9). The Netherlands takes the top spot, with 83 percent associated with higher levels of both regional of residents surveyed reporting their location is a good place for and national economic performance [22, 23]. gay and lesbian people. Canada is second (77 percent), followed We begin with the global racial and by Spain (75 percent). Ireland and Uruguay are next (both with ethnic openness map (exhibit 8), which 70 percent). Belgium (67 percent), Australia and Sweden (66 charts national rankings on openness to percent), Denmark (65 percent), and the United Kingdom (63 racial and ethnic minorities. Canada takes percent) round out the top ten. The United States first place, with 91 percent of its residents is found in 12th place. surveyed reporting that their location is The global tolerance map (exhibit 10) plots how nations open to racial and ethnic minorities. New stack up on our overall Tolerance Index. Canada takes the top Zealand takes second spot with 87 percent, spot. Ireland ranks second. The Netherlands ranks third: it is followed by Ireland (85 percent), Australia the only country among the top five that is more open to gay (84 percent), the United States (83 percent), and lesbian people (83%) than to racial and ethnic minorities The global racial and ethnic openness map Exhibit 8 Rank 10 20 30 40 50 60 70 1st 80th www.martinprosperity.org | 11
  • 20. The global openness to gays and lesbians map Exhibit 9 Rank 10 20 30 40 50 60 70 1st 80th (73%). New Zealand ranks fourth, followed by nearby Austra- lia in fifth place. Both have open immigration systems and have made it a priority to attract foreign talent. For example, Peter Jackson’s Park Road Post film studio in Wellington has attracted not just movie makers but software experts, market- ers, writers, musicians, and other creative people from all over the world. Spain, where the Zapatero administration made tolerance and openness a priority, is in sixth place, followed by Swe- den. The United States ranks eighth, perhaps reflecting recent increases in anti-immigrant sentiment and social conservatism toward gays and lesbians. Uruguay is in ninth place and the United Kingdom rounds out the top ten. 12 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 21. The global tolerance map Exhibit 10 Rank 10 20 30 40 50 60 70 80 1st 90th Global Tolerance—uruguay Located in the southern part of South America on the Atlantic coast between Brazil and Argentina, Uruguay, among the smallest countries on the continent, has been dubbed “The Switzerland of South America.” It has earned this title for several reasons. The administrations of President Jose Batlle in the early 20th century established widespread political, social, welfare and economic reforms that established a socialist tradition. Its banking laws have many similarities to its Alpine cousin. The country has an eclectic society which showcases a rich European heritage, a broad variety of artistic and cultural attractions, and one of the most progressive educational systems in the region. While many Uruguayans identify themselves as “white,” their lineages include Spanish, Portuguese, Italian, Mestizo, Amerindian, and African-Uruguayan elements. Spanish is the official national language, although Portuguese, Brazilero (a Spanish-Portuguese mix), English, French, German, and Italian are spoken widely in the Montevideo metropolitan area. While representing less than 1% of the total population, Jews, mostly in Montevideo, make up one of the largest Jewish communities in South America. Half of the country’s population lives in Montevideo, and 92% of the country’s population is living in an urban area. Uruguay is popular among travelers from the Western Hemisphere and Europe. https://www.cia.gov/library/publications/the-world-factbook/geos/uy.html www.martinprosperity.org | 13
  • 22. The GlobAl CreATIvITy Index MAP— We have now seen how nations stack up on each of the 3 Ts of economic development brInG IT All ToGeTher and on the GCI. But how do these scores relate to economic growth and competitiveness, and We now bring it all together. The Global Creativity Index map to broader measures of happiness, well-being, (exhibit 11) combines all of the previous 3 T measures into human development, and longer-run prosper- one overarching metric of a nation’s long-term creativity and ity? We turn to this issue next. prosperity potential. Sweden takes first place overall, maintaining the top position it held in the 2004 edition of the GCI. The United States takes second place, improving its earlier fourth place finish. Finland takes third place, followed by Denmark in fourth, Australia in fifth, and New Zealand in sixth place. Canada takes seventh place together with Norway. Singapore and the Netherlands round out the top ten. Rounding out the top twenty are Belgium, Ireland, the United Kingdom, Switzerland, France, Germany, Spain, Taiwan, Italy, and Hong Kong. Israel ranks 25th. Of the BRIC nations, Russia ranks highest on the GCI, at 31st, followed by Brazil in 46th, India in 50th, and China in 58th place. The Global Creativity Index map Exhibit 11 Rank 10 20 30 40 50 60 70 80 1st 90th 14 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 23. Top 25 overall Global Creativity Index rankings Exhibit 12 ToTal Rank CounTRy TeChnology TalenT ToleRanCe global CReaTIvITy Index 1 Sweden 5 2 7 0.923 2 United States 3 8 8 0.902 3 Finland 1 1 19 0.894 4 Denmark 7 4 14 0.878 5 Australia 15 7 5 0.870 6 New Zealand 19 5 4 0.866 7 Canada 11 17 1 0.862 7 Norway 12 6 11 0.862 9 Singapore 10 3 17 0.858 10 Netherlands 17 11 3 0.854 11 Belgium 16 12 13 0.813 12 Ireland 20 21 2 0.805 13 United Kingdom 18 19 10 0.789 14 Switzerland 6 22 20 0.785 15 France 14 23 16 0.764 15 Germany 9 26 18 0.764 17 Spain 24 28 6 0.744 18 Taiwan — 32 21 0.737 19 Italy 26 18 23 0.707 20 Hong Kong 22 37 12 0.691 21 Austria 13 30 35 0.663 22 Greece 38 9 37 0.638 22 Slovenia 23 10 51 0.638 24 Serbia 28 35 27 0.614 24 Israel 4 20 66 0.614 www.martinprosperity.org | 15
  • 24. section 2: Toward sustainable Prosperity 16 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 25. The economic crisis has brought us face-to-face • Do more creative nations generate higher levels with the fact that unbridled economic growth of happiness for their residents? does not necessarily equal sustainable pros- To get at this we examine the relationship between perity. Economists have been seeking fuller the GCI and a comprehensive measure of global frameworks and better metrics with which to happiness or subjective well-being provided by the evaluate the underpinnings as well as the path Gallup Organization’s World Poll. to longer-run, more sustainable prosperity. This report is in line with this broader effort. In that light, we now examine the relationships The GCI And eConoMIC ouTPuT between our measure of underlying creativity, the GCI, and a series of measures of economic Let’s begin with the relationship between global creativity and social progress. We structure our inquiry and the standard measure of economic output—gross domestic around four key questions. product per capita. The figure below (exhibit 13) shows the cor- relation between the GCI and each of the measures for the 3 Ts. • Are more creative societies also With a correlation of 0.84, the GCI is closely associated more productive and competitive? with gross domestic product per capita. Of the 3 Ts, talent has Here we look at the association between the strongest relationship to GDP (0.78), followed by technol- the GCI and standard measures of eco- ogy (0.72), and tolerance (0.63). It is interesting that when the nomic output and competitiveness, like three are combined in the GCI the correlation is considerably gross domestic product and the World stronger (0.84). This shows how the 3 Ts work together and Economic Forum’s Global Competitive- how nations scoring high in all three enjoy higher material ness Index. standards of living. • Are creative societies more or less exhibit 14 shows the broad relationship between the GCI and equal than their counterparts? gross domestic product per capita. The line fits extremely well; Here we look at the relationship there are only a few extreme outliers at the top and the bottom between the GCI and measures of of the chart. Clearly, the relationship between the GCI and gross socio-economic inequality. domestic product per capita is quite close. Nations above the fitted line have higher gross domestic prod- • Are more creative nations associated uct per capita than their GCI scores would predict, while those with higher levels of human develop- below the line have lower economic output than predicted. On ment more generally? the one hand, the United States, Norway, Switzerland, Japan, Here we compare the GCI to a broad mea- Hong Kong, the United Kingdom, Israel, Austria, Germany, and sure of human development, the United Korea all have levels of gross domestic product per capita which Nation’s Human Development Index. are slightly higher than their GCI scores would predict. On the other hand, Canada, the Netherlands, Finland, Australia, and The GCI and economic output (correlations) Exhibit 13 Talent Tolerance Technology Global Creativity Index 0.0 0.2 0.4 0.6 0.8 1.0 Correlation with Economic Output (GDP per capita) www.martinprosperity.org | 17
  • 26. New Zealand have levels of gross domestic product per capita exhibit 15 shows the correlation between which are slightly lower than their GCI scores would seem the Global Competitiveness Index and the to warrant. Perhaps more significantly, very low GCI scores GCI, as well as each of our 3 T indices. The appear to be associated with even lower levels of economic out- GCI is closely associated with the Global Com- put per capita, as the cases of Nicaragua, Mongolia, Kyrgyzstan, petitiveness Index (with a correlation of 0.79). Uganda, and Madagascar indicate. The correlations are also substantial for each of the 3 Ts—led by Technology (0.82), then Talent (0.66), and Tolerance (0.59). The GCI And eConoMIC CoMPeTITIveness exhibit 16 shows the broad relationship between the GCI and the Global Competitive- We now turn to the relationship between the GCI and a well- ness Index. Though still fairly strong, the established measure of global competitiveness—the Global relationship between the GCI and the Global Competitiveness Index developed by Harvard professor Competiveness Index is not as pronounced as Michael Porter for the World Economic Forum. The Global it is with gross domestic product per capita— Competitiveness Index is a comprehensive measure of overall there is more “scatter” about the line. On the competitiveness and included factors associated with economic one hand, the United States, Singapore, Swit- output, innovation, efficiency, and business climate among zerland, the United Kingdom, Japan, Hong others [24]. Kong, Germany, and Denmark all perform The GCI and economic output Exhibit 14 Estonia Lithuania Hong Kong Uruguay Austria Denmark Argentina Greece Norway Cyprus Israel Singapore 11.0 Chile Poland Portugal Japan Netherlands Ireland Slovakia Switzerland Malaysia Germany Brazil South Africa Macedonia 10.0 Kazakhstan Panama Romania Trinidad and Tobago Saudi Arabia Mexico 9.0 Egypt Peru Turkey Economic Output Azerbaijan Jamaica Thailand El Salvador 8.0 Iran Sweden United States Finland Canada Paraguay Australia New Zealand Indonesia Belgium 7.0 United Kingdom China France Honduras Armenia Spain Italy Ukraine Slovenia India Republic of Korea Philippines Hungary 6.0 Viet Nam Georgia Serbia Pakistan Ecuador Czech Republic Cambodia Bolivia Latvia Sri Lanka Russian Federation Kyrgyzstan Croatia Uganda Bulgaria 5.0 Mongolia Nicaragua R 2 Linear = 0.701 Madagascar 0.0 0.2 0.4 0.6 0.8 1.0 Global Creativity Index Note: Economic Output measured as log of grossas log of gross domestic product per capita Note: Economic Output measured domestic product per capita. 18 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 27. The GCI and global competitiveness (correlations) Exhibit 15 Talent Tolerance Technology Global Creativity Index 0.0 0.2 0.4 0.6 0.8 1.0 Correlation with Global Competitiveness Index The GCI and global competitiveness Exhibit 16 Republic of Korea Hungary Portugal Japan Czech Republic Estonia United Arab Emirates Costa Rica Lithuania Poland Sweden Cyprus United States 6.0 Chile Malaysia Finland Denmark South Africa Singapore Slovakia Netherlands Brazil Switzerland India United Kingdom Panama Germany China France Mexico Taiwan Egypt Hong Kong Sri Lanka Austria Peru Turkey Global Competitiveness Index Trinidad and Tobago 5.0 Thailand Saudi Arabia Azerbaijan Indonesia Canada Australia Viet Nam El Salvador New Zealand Norway 4.0 Belgium Ireland Spain Ukraine Italy Jamaica Romania Israel Honduras Kazakhstan Slovenia Macedonia Greece Philippines Serbia Georgia Russian Federation Armenia Latvia Ecuador Croatia Bolivia Uruguay Pakistan Madagascar Kyrgyzstan Bulgaria 3.0 Cambodia Paraguay Uganda Argentina R 2 Linear = 0.616 Mongolia Nicaragua 0.0 0.2 0.4 0.6 0.8 1.0 Global Creativity Index www.martinprosperity.org | 19
  • 28. The GCI and entrepreneurship (correlations) Exhibit 17 Talent Tolerance Technology Global Creativity Index 0.0 0.2 0.4 0.6 0.8 1.0 Correlation with Entrepreneurship better in terms of competitiveness than their GCI scores would lead one to expect. Canada performs just slightly better than its GCI scores predict. China and India both perform significantly The Global better on competitiveness than their GCI scores suggest they entrepreneurship Monitor should. On the other hand, New Zealand, Ireland and Spain perform lower on competitiveness than their GCI scores would The Global Entrepreneurship Monitor (GEM) is seem to predict. a not-for-profit academic research consortium whose goal is making high quality information on global entrepreneurial activity available to The GCI And enTrePreneurshIP as wide an audience as possible. GEM is the largest single study of entrepreneurial activity Joseph Schumpeter long ago showed how innovation and in the world. Started as a partnership between entrepreneurship come together to set in motion the “creative London Business School and Babson Col- destruction” that drives economies forward. Some 20 per- lege, it was initiated in 1999 with 10 countries. cent of the Fortune 500 companies were founded in the last GEM 2010 is currently conducting research in thirty years, including Google, Microsoft, Apple, and Amazon. 59 countries. The research program, based Entrepreneurship is an integral component and a key driver on a harmonized assessment of the level of of economic growth and prosperity. national entrepreneurial activity for all partici- To get at this, we employ a new measure: the Global Entre- pating countries, involves exploring the role of preneurship Index, which covers 54 nations worldwide [25]. entrepreneurship in national economic growth. The index shows the wide disparity in entrepreneurial activity Systematic differences continue, with few across the nations of the world. Canada, Israel, and the United highly entrepreneurial countries reflecting low States have the highest levels of entrepreneurial activity, while economic growth. There is, further, a wealth of Denmark, Finland, France, Germany, and Japan have the low- national features and characteristics associ- est. One in every twelve workers in the United States is involved ated with entrepreneurial activity. The program in a start-up company, as compared to fewer than one in 67 creates both individual national papers and persons in Finland, according to the study. an annual global report. Over 120 scholars and exhibit 17 shows the correlation between the Global Entre- researchers are actively participating in the preneurship Index and the GCI as well as each of our 3 T indices. GEM project. Of the 3 Ts, Talent has the strongest relationship to the Global http://www.gemconsortium.org Entrepreneurship Index (0.74), followed by Tolerance (0.71), and Technology (with a weaker correlation of 0.55). The correlation 20 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 29. for the overall GCI (0.81) is the strongest, The GCI And InequAlITy again showing the combined strength of the 3 Ts working together. We now turn to the relationship between global creativity and exhibit 18 shows the broad relationship inequality. Some would argue that the shift to a creative knowl- between the GCI and the Global Entrepre- edge-based economy exacerbates levels of inequality. High- neurship Index. The fit is good but there are a paying, family supporting manufacturing jobs have declined large number of countries above and below the and the labor market has split into higher-pay, higher-skill line. On the one hand, New Zealand, Australia, knowledge and professional jobs on the one hand, and lower- Sweden, Denmark, the United Kingdom, and pay, lower-skill service jobs on the other. A series of studies Hong Kong all perform better on the Global documents the growth in income inequality in the United Entrepreneurship Index than their GCI scores States. According to data from the Congressional Budget Office would predict. Canada is just slightly above released in June, 2010, average after-tax incomes for the top one the fitted line, while the United States, perhaps percent of American households rose by 281 percent between surprisingly, is just below it. On the other hand 1979 and 2007. This compares to increases of 25 percent for the Germany, France, Belgium, and Singapore have middle fifth of households and 16 percent for the bottom fifth lower levels of entrepreneurial activity than (all figures are adjusted for inflation) [26]. the GCI would predict. The GCI and entrepreneurship Exhibit 18 Sweden New Zealand Australia 0.8 Finland Denmark Canada Netherlands Norway 0.7 Italy Hong Kong Austria Slovenia 0.6 Portugal United Arab Emirates United States Latvia Chile Kazakhstan Poland Romania Malaysia Philippines 0.5 China Mexico Peru Entrepreneurship Ireland United Kingdom 0.4 Switzerland Belgium Turkey Jamaica 0.3 France Germany Singapore Thailand Spain Iran Hungary Greece Indonesia Israel Serbia 0.2 Croatia Czech Republic Macedonia Japan Bolivia Uruguay Ecuador Argentina Egypt South Africa 0.1 Uganda Brazil R 2 Linear = 0.658 0.0 0.2 0.4 0.6 0.8 1.0 Global Creativity Index www.martinprosperity.org | 21
  • 30. But is this the case across nations? Does increasing creativ- European countries, including Sweden, Den- ity necessarily lead to increased economic inequality? To get mark, Finland, Norway, the Netherlands, and at this, we examine the relationship between the GCI and a Germany. Japan is represented as well. Among standard measure of income inequality—the Gini Index. the less developed nations, we find high levels exhibit 19 shows the relationships between income inequal- of inequality in South American nations like ity and the GCI overall as well as each of the 3 T indices that Paraguay, Bolivia, Panama, Brazil, Honduras, comprise it. While this may come as a surprise for those familiar Ecuador, and Argentina. Of the BRIC nations, with the case of the United States, we find that the GCI is in fact China, Russia and particularily Brazil all ex- systematically associated with lower levels of socio-economic hibit much higher levels of inequality than inequality—and hence greater equality—across the nations of their GCI scores would predict. the world. There appears to be two distinct paths avail- Each and every one of the correlations between the GCI and able to high creative development: for every the Gini is negative. The correlation between inequality and high-creativity, high-inequality nation there is the overall GCI is −0.43. The Gini is also quite negatively asso- a high-creativity, low-inequality counterpart. ciated with Technology (−0.47) and Talent (−0.52) but much This is a likely reflection of these countries’ less so with Tolerance (−0.06 and not statistically significant). differing levels of social welfare. Though more This last is a bit surprising as one might expect more tolerant systematic study is needed before we can draw societies to be more equal on balance. That said, we believe the any firm conclusions, this finding gives us rea- overall finding of a negative association between creativity and son for optimism; at the same time, it suggests inequality to be an important one, for it implies that the general that sustainable, long-term prosperity requires trajectory of economic development is associated with lower a significant investment in education and skill levels of inequality. development. This is the topic to which we exhibit 20 is a scatter-graph which plots the association now turn. between the Gini measure of income inequality and the GCI for the nations of the world. The fit is not especially good and there are lots of countries above and below the line. This sug- The GCI And huMAn gests that there are two distinctive paths for high creativity countries. On the one hand, there are countries like the United develoPMenT States, the United Kingdom, Singapore, and to a lesser extent, What is the connection between creativity Australia and New Zealand, where high levels of creativity, and human development? To get at this, productivity and economic competitiveness go hand in hand we explore the association between the GCI with higher levels of inequality. But there are also a substantial and the United Nations’ Human Development number of countries where high levels of creativity, competi- Index [27]. “People often value achievements tiveness and productivity combine with much lower low levels that do not show up at all, or not immediately, of inequality. These are largely Scandinavian and Northern The GCI and inequality (correlations) Exhibit 19 Talent Tolerance Technology Global Creativity Index −0.6 −0.4 −0.2 0.0 Correlation with Income Inequality 22 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 31. The GCI and income inequality Exhibit 20 India Georgia Philippines R 2 Linear = 0.185 Panama Bolivia Ecuador China Portugal 70 Peru Russian Federation Mexico Costa Rica Uganda Estonia Turkey Latvia El Salvador Uruguay Honduras Argentina Paraguay South Africa 60 Brazil Chile Income Inequality United States Nicaragua Greece Australia Malaysia Jamaica Israel New Zealand 50 Madagascar Singapore Canada Netherlands Ireland United Kingdom Switzerland France 40 Spain Cambodia Italy Viet Nam Kazakhstan 30 Armenia Romania Belgium Egypt Croatia Pakistan Kyrgyzstan Germany Indonesia Trinidad and Tobago Bulgaria Austria Mongolia Slovakia Slovenia Sweden Sri Lanka Poland Hungary Finland 20 Azerbaijan Lithuania Czech Republic Denmark Thailand Ukraine Japan Norway 0.0 0.2 0.4 0.6 0.8 1.0 Global Creativity Index Note: Income Inequality measured as a Gini Index. a Gini Index Note: Income Inequality measured as The GCI and human development (correlations) Exhibit 21 Talent Tolerance Technology Global Creativity Index 0.0 0.2 0.4 0.6 0.8 1.0 Correlation with Human Development Index www.martinprosperity.org | 23
  • 32. in income or growth figures,” wrote Mahub ul Haq, founder significantly worse on Human Development of the UN Human Development Report [27]. The UN Human Index than its GCI score would seem to war- Development Index takes a wide variety of human development rant. Four less-developed nations—Cambodia, factors into account, from health conditions and life expectancy Pakistan, Madagascar, and Uganda—lag signif- to education levels and standards of living. icantly on Human Development when their exhibit 21 shows the associations between the Human GCI score is taken into account. Development Index and the GCI, as well as each of the 3 T indices that comprise it. The overall GCI is closely associated with the Human Development Index (the correlation is 0.82). The GCI And hAPPIness Since the Human Development Index includes a measure of education, we would expect it to be strongly associated with This leads us to a final question: What is the our talent index (and it is, with a correlation of 0.83). But it relationship between global creativity and is also correlated with technology (0.63) and tolerance (0.57). overall happiness? There is considerable exhibit 22 plots the GCI against the Human Development ongoing debate concerning the relation- Index for the nations of the world. The fit is good, with outliers ship between economic development and mainly at the lower left hand quadrant of the graph—among subjective well-being. Much of this debate the least developed nations of the world. has revolved around the effects of money The United States performs considerably less well on the or material well-being on happiness. It was Human Development Index than its GCI score would predict; initially found that the relationship between Canada performs slightly better. Of the BRICs, India performs income and happiness only holds within, and The GCI and human development Exhibit 22 Greece Australia Japan Norway Israel Canada Republic of Korea Netherlands Czech Republic Ireland Estonia Switzerland 1.0 Macedonia United Arab Emirates France Romania Lithuania Spain Panama Poland Kazakhstan Cyprus Mexico Slovakia Trinidad and Tobago Chile Sweden Ecuador Malaysia Italy United States 0.9 Thailand Peru Hong Kong Finland Jamaica Turkey Austria Denmark Saudi Arabia Slovenia New Zealand Iran Hungary Singapore Belgium United Kingdom Human Development Index 0.8 Serbia Germany Viet Nam Portugal Indonesia Brazil Latvia Ukraine Russian Federation Armenia Costa Rica Georgia Croatia 0.7 Philippines Uruguay China Argentina Bolivia Bulgaria Egypt Nicaragua Sri Lanka South Africa Kyrgyzstan Mongolia 0.6 Azerbaijan El Salvador India Honduras Paraguay Pakistan Cambodia 0.5 Uganda Madagascar 0.4 R 2 Linear = 0.666 0.0 0.2 0.4 0.6 0.8 1.0 Global Creativity Index 24 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 33. The GCI and happiness (correlations) Exhibit 23 Talent Tolerance Technology Global Creativity Index 0.0 0.2 0.4 0.6 0.8 Correlation with Life Satisfaction The GCI and happiness Exhibit 24 9.0 Panama Romania Denmark Kazakhstan Finland Mexico Norway Ecuador Netherlands 8.0 Trinidad and Tobago Ireland Bolivia Switzerland Peru Turkey Portugal Austria United Kingdom Thailand Czech Republic Jamaica Costa Rica Greece 7.0 Saudi Arabia United Arab Emirates Israel Italy Cyprus Sweden Brazil United States Life Satisfaction Malaysia El Salvador Poland 6.0 Viet Nam Honduras Chile Paraguay France Germany Spain Iran Taiwan Hong Kong Singapore Indonesia Japan Australia 5.0 Slovenia New Zealand Republic of Korea Canada Hungary Belgium India Serbia China Croatia Armenia Russian Federation Philippines Estonia 4.0 Pakistan Macedonia Latvia Georgia Uruguay Cambodia Egypt Argentina Sri Lanka Lithuania Kyrgyzstan Slovakia Uganda Nicaragua Mongolia Bulgaria 3.0 Azerbaijan South Africa R 2 Linear = 0.551 Madagascar Ukraine 0.0 0.2 0.4 0.6 0.8 1.0 Global Creativity Index www.martinprosperity.org | 25
  • 34. not across countries, the so-called “Easterlin effect” [28]. More recent econometric studies by Angus Deaton [29] and Betsey Stevenson and Justin Wolfers [30], based on new data collect- ed worldwide by the Gallup Organization, have challenged this view, finding that income exerts strong effects on happiness across the board. Carol Graham seeks to square this analyti- cal circle, calling attention to the paradox of the “happy peasant and the miserable millionaire,” suggesting that while people can adapt to be happy at low levels of income, they are far less happy when there is uncertainty over their future wealth [31, 32]. Some have gone so far as to suggest that life satisfaction and well-being be utilized to supplement more conventional measures of economic output like Gross Domestic Product. John Helliwell [33, 34], Joseph Stiglitz [1], Ed Diener [35], and Rafael Di Tella and Robert MacCulloch [36], among others, have made the case for a measure of Gross National Happiness. We examine the relationship between the GCI and a compre- hensive measure of happiness and life-satisfaction collected by the Gallup Organization’s World Poll [37]. The World Poll covers roughly 150 nations and measures life satisfaction using a stan- dard set of core questions which ask individuals to rank their satisfaction with aspects of their life in real time. exhibit 23 shows the associations between well-being or life satisfaction and the overall GCI as well as the 3 T indices that comprise it. Life satisfaction is approximately equally related to all 3 Ts, with only a slightly stronger relation to Tolerance (0.66), followed by Talent (0.65) and Technology (0.65). The overall GCI is closely associated with life satisfaction (a correla- tion of 0.74). Once again, we note that the association is consid- erably stronger when the 3 Ts are combined into the overall GCI measure. This again illustrates the power of the 3 Ts working together to condition higher levels of life satisfaction and well- being. exhibit 24 plots the GCI against life satisfaction. The fit is reasonably good, with outliers mainly at the bottom quadrants of the graph—that is, among the less developed nations. The relationship between the GCI and life satisfaction is strongest among the more advanced nations. Denmark, Finland, the Netherlands, Ireland, Switzerland, New Zealand, and Canada have higher levels of life satisfaction than their GCI scores would predict. The United States has a level of life satisfac- tion that is roughly in line with its GCI score. Singapore, the United Kingdom, Taiwan, Hong Kong, and Korea have lower levels of life satisfaction than their GCI scores would predict. Among the BRICs, Brazil has a significantly higher level of life satisfaction than its GCI score would predict, while Russia’s is considerably lower. Both India and China have lower levels of life satisfaction than the GCI would predict. 26 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 35. ConClusIon Creative Class makes up only 7.4 percent of China’s workforce. Our measures of global creativity are also closely associated with both established and alternative metrics of economic and social progress. Nations which score high on the GCI have higher levels of economic output, entrepreneurship, and overall econo- mic competitiveness. Nations that invest in creativity and that achieve on the 3 Ts of economic development also have higher levels of human development, life satisfaction, and happiness. Our study also helps us better understand the relationship between creativity, economic progress, and inequality. Nations In the wake of the economic crisis of 2008, which score high on the GCI have on balance greater levels of economists have been rethinking conventional equality. While some countries, like the United States and the conceptions of economic growth—not only how United Kingdom, achieve high GCI scores alongside relatively best to measure it but what exactly it is. Though high levels of inequality, in general elevated levels of global the challenges of job creation and the restora- creativity are associated with lower levels of inequality. This tion of competitiveness remain high on most suggests that the old notion that it is large disparities in income policy-makers’ agendas, broader questions that create the incentives and motivations that drive economic about how best to foster long-run, sustainable progress is no longer valid; at the same time it outlines a high- prosperity while addressing the issue of eco- road path to prosperity, where the fruits of economic progress nomic inequality are also of vital importance. are broadly shared. Looking forward, sustained economic prog- To get at this, we have examined 82 nations ress can no longer tolerate the waste of human talent, but must through the lens of the Global Creative Index increasingly turn on the full development of each and every (GCI), which reflects three key factors that human being. shape long-run economic prosperity: Technol- ogy, Talent, and Tolerance. Then we system- atically examined the relationship between the GCI and a series of measures of economic and social progress, including conventional measures of economic output and competi- tiveness and broader measures of inequality, human development, and happiness. Sweden takes first place on the GCI. The United States is second, followed by Finland, Denmark, and Australia. Canada ranks eighth. New Zealand, Norway, Singapore, and the Netherlands round out the top ten. There have been some notable changes in rankings since our initial version of the GCI in 2004. Though Sweden retains its place at the top of the list, the United States has moved up to the second position from fourth, Australia has moved from twelfth to fifth, New Zealand from 18th to sixth, and Canada from 11th to eighth. What’s most notable is that four of the top ten positions are occupied by Scandinavian countries. Australia and New Zealand, which have made attracting talent a priority, have dramatically improved their positions as well. Despite their rapid economic rise, the BRIC nations still do not crack the upper tiers on the GCI: Russia ranks 31st, Brazil 46th, India 50th, and China 58th. The creative class, a key force in economic growth, makes up more than 40 percent of the work force in 40 nations. Of the BRIC, only Russia comes close, with 38.6 per- cent of its workforce in the Creative Class. The www.martinprosperity.org | 27
  • 36. APPendIx MeThodoloGy, vArIAbles, And dATA The data in this report cover 82 nations for the period 2000 to 2009. Note that we use different years for different variables, and sometimes utilize running averages, depending on data availability. The following describes the main variables and data sources used in this report. TeChnoloGy We use three variables for technology: R&D investment, research, and innovation. Global r&d investment This measures R&D spending as a share of GDP. It is adapted from World Development Indicators of the World Bank. It is defined as “current and capital expenditures on creative work undertaken systematically to increase the stock of knowledge, including knowledge of humanity, culture, and society, and the use of knowledge to devise new applications. R&D covers basic research, applied research, and experimental development.” Global researchers This variable measures professional researchers engaged in R&D per million capita. It is adapted from World Development Indicators and covers the years 2000 to 2005. Professional researchers are defined as “professionals engaged in conceiving of or creating new knowledge, products, processes, methods, and systems and in managing projects concerned. Postgraduate students at the doctoral level (ISCED97 level 6) engaged in R&D are considered researchers.” The World Development Indicators are published by The World Bank on a yearly basis. The data is reported for 127–146 different countries depending on the year. However, since countries do not always report on an annual basis, we use averages for several years. This results in higher numbers of observations and also smoothes out extreme values. [38]. Global innovation This variable measures patents granted per capita. It is adapted from the United States Patent and Trademark Office (USPTO) and covers the years 2001–2008. US patents are a reasonable proxy for global innovation as inventors from around the world file for patent protection in the United States and the USPTO tracks inventors’ national origins. We count the number of granted US patents for each nation in the world. [39]. 28 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 37. The technology index The Technology Index combines all three of these variables in a single measure. The overall Technol- ogy Index is based on a principal component analysis, where the correlations between the overall index and the three constituent measures are as follows: Global R&D Investment (0.878), Global Researchers (0.894), and Global Innovation (0.943) with patents per capita. In other words, the over- all technology score is based on the value for each sub-variable, and not its ranking. We estimate the index for countries with missing values by running regressions based on the variables for which we do have values. The R2s for these regressions are as follows: 0.535 for Global R&D Investment, 0.588 for Global Researchers, and 0.702 for Global Innovation. TAlenT We employ two measures of talent: human capital and Creative Class population. human capital The human capital variable is based on the standard measure of educational attainment. Specifically we use data on the rate of enrollment in tertiary or post-high school education from the World Devel- opment Indicators. The data is reported to the UNESCO Institute by national education agencies. Tertiary education is defined as “a wide range of post-secondary education institutions, including technical and vocational education, colleges, and universities, whether or not leading to an advanced research qualification, that normally require as a minimum condition of admission the successful completion of education at the secondary level.” The data cover the years 2004 and 2006 and are based on annual school surveys, normally conducted in the beginning of the year, and do not therefore reflect dropouts or actual attendance. Creative Class The creative class variable is based on data from the International Labour Organization [40] and covers the years 2004–2007. It is calculated as the share of a country’s labor force that is engaged in a higher degree of problem solving in their everyday work. It includes occupations such as computer science and mathematics; architecture, engineering; life, physical, and the social sciences; education, training, and library science; arts and design work, entertainment, sports, and media; and professional and knowl- edge work occupations in management, business and finance, law, sales management, and healthcare. The talent index The Talent Index combines these two variables in a single index which is based on a principal component analysis, where the correlations are 0.872 for the Creative Class variable and the Human Capital vari- able respectively. In other words, the overall talent score is based on the value for each sub-variable and not its ranking. We estimate missing values through a regression analysis, which generates an R2 value of 0.501. www.martinprosperity.org | 29
  • 38. TolerAnCe We employ two measures of tolerance; both are from the Gallup Organization’s World Poll. [37] Tolerance toward ethnic and racial minorities The survey asks “Is your city or area a good or bad place to be in for ethnic and racial minorities?” Our variable scores the share of the respondents who said their place is a good place. The value is for the year 2009. Tolerance toward gays and lesbians The survey asks “Is your city or area a good or bad place to be in for gay and lesbian people?” Our variable scores the share of the respondents who said their place is a good place. Again, the value is for the year 2009. The Gallup World Poll survey is based on approximately 1,000 interviews per country (adjusted depending on population size) which are conducted in approximately 150 countries. The sample represents roughly 95 percent of the world’s adult population and is stratified proportionally, with the distribution of the population across cities and rural areas of different sizes. (For more information about the sampling procedure, see: http://www.gallup.com/consulting/worldpoll/108082/Sampling. aspx). The target population is all civilian, non-institutionalized, and ages 15 years or older. For more information about the methodology, see: http://www.gallup.com/consulting/worldpoll/108079/ Methodological-Design.aspx). These tolerance measures differ from those used in the earlier version of the Global Creativity Index that was presented in Richard Florida’s The Flight of the Creative Class [8], which were based on variables from the World Values Survey. The new measures represent an improvement across two dimensions. First and foremost, the newly available Gallup World Poll data provides a better, more direct measure of tolerance. And second, the World Poll data covers a larger number of countries. That said, these two sets of variables are closely correlated. Our Gallup World Poll measure of Racial and Ethnic Tolerance is correlated at .501 with our earlier tolerance measure, while the Gallup Gay and Lesbian Tolerance measure is correlated at 0.822 with our earlier measure. The tolerance index The Tolerance Index is based on the two measures above. The two are equally weighted into a factor where both correlate at 0.92. We estimate missing values based on a regression analysis, which gener- ates an R2 value of 0.432. The GlobAl CreATIvITy Index To create the final Global Creativity Index, we constructed the talent, technology and tolerance variable based on principle component analysis. In other words, each of the scores are based on the actual performance and not the rank of each individual variable. We thereafter ranked each of the 3 T variables, with the highest number to the best performer. We added the ranks together and divided by three. In the case where we had a value for just two of the three variables, these two were added and divided by two. To get the Global Creativity Index score, the average score of the 3 Ts were divided by the number of observations overall. 30 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 39. eConoMIC And soCIAl ProGress MeAsures We employ the following measures of economic and social progress in our analysis. economic output /GdP per capita We employ the conventional measure of economic output: GDP per capita. The data are from World Development Indicators for the year 2005. [38]. Global competitiveness index We use the Global Competitiveness Index developed by Michael Porter for the World Economic Forum. It is based on the following categories: basic requirements (including institutions, infrastructure, mac- roeconomic stability, and health and primary education), efficiency enhancers (including higher edu- cation and training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, and market size), and innovation factors (including business sophistication and innovation). [24]. Global entrepreneurship index This variable is based on the Global Entrepreneurship Index developed by Zoltan Acs and Laszlo Szerb. The index consists of several measures of entrepreneurial attitudes, activity, and aspiration, and covers the years 2004–2008. [25]. Income inequality This variable is based on the standard measure of an Income Inequality—a Gini Index. The Gini Index measures the distribution of incomes in a nation, ranging from 0 to 100 where 0 represents absolute equality and 100 absolute inequality. This variable is from the World Bank’s World Develop- ment Indicators for the year 2007 [38]. human development index This variable is based on the United Nations Human Development Index, a composite measure which aims to capture three dimensions of human development: health and measured life expectancy, edu- cation level, and standard of living. We employ the 2009 index, which is based on data from 2007 [27]. happiness/ life satifaction This variable is from the Gallup Organization’s 2009 Gallup World Poll. It is representative of 95 percent of the world population, and is based on telephone surveys and face-to-face interviews which pose this question: “Please imagine a ladder with steps numbered from 0 at the bottom to ten at the top. Suppose we say that the top of the ladder represents the best possible life for you, and the bottom represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time, assuming that the higher the step the better you feel about your life, and the lower the step the worse you feel about it? Which step comes closest to the way you feel?” Our variable is the national average rank of life satisfaction [37]. www.martinprosperity.org | 31
  • 40. Global technology rankings* Appendix A COUNTRY R&D INVESTMENT RESEARCHERS INNOVATION TECHNOLOGY INDEX Finland 3 1 4 1 Japan 4 3 2 2 United States 6 7 1 3 Israel 1 — 5 4 Sweden 2 2 6 5 Switzerland 5 11 3 6 Denmark 9 5 9 7 Republic of Korea 7 16 — 8 Germany 8 13 7 9 Singapore 11 4 11 10 Canada 13 9 8 11 Norway 18 6 18 12 Austria 12 14 13 13 France 10 15 16 14 Australia 17 8 17 15 Belgium 14 17 15 16 Netherlands 16 18 12 17 United Kingdom 15 — 14 18 New Zealand 25 10 20 19 Ireland 23 19 19 20 Russian Federation 22 12 36 21 Hong Kong 41 26 10 22 Slovenia 20 22 22 23 Spain 29 21 23 24 Czech Republic 21 27 26 25 Italy 27 34 21 26 Estonia 33 20 30 27 Serbia 19 — 59 28 Croatia 24 28 31 29 China 26 39 — 30 Lithuania 36 23 34 31 Portugal 35 24 35 32 Hungary 32 30 24 33 Ukraine 28 — 50 34 Uganda 30 — 72 35 Slovakia 44 25 39 36 Poland 45 29 44 37 Greece 39 32 33 38 Latvia 47 31 42 39 Bulgaria 46 33 41 40 32 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 41. COUNTRY R&D INVESTMENT RESEARCHERS INNOVATION TECHNOLOGY INDEX Brazil 31 43 46 41 India 38 36 27 42 Costa Rica 51 — 28 43 Azerbaijan 55 — 65 44 South Africa 34 46 32 45 Armenia 61 — 51 46 Georgia 62 — 45 47 Chile 40 41 55 48 Romania 50 35 52 49 Kyrgyzstan 65 — 66 50 Turkey 37 44 54 51 Philippines 68 — 56 52 Trinidad and Tobago 69 — 40 53 Malaysia 42 45 25 54 Argentina 48 37 37 55 Peru 70 — 61 56 Jamaica 73 — 49 57 Honduras 76 — 64 58 Cyprus 53 40 29 59 Kazakhstan 60 38 63 60 Macedonia 56 42 62 61 Mexico 49 49 — 62 Uruguay 59 47 48 63 Thailand 58 48 47 64 Panama 52 54 53 65 Bolivia 57 53 67 66 El Salvador — 57 60 67 Viet Nam 64 52 70 68 Sri Lanka 67 51 58 69 Madagascar 63 59 71 70 Paraguay 71 55 69 71 Ecuador 72 58 57 72 Pakistan 66 56 — 73 Indonesia 74 50 — 74 Cambodia 75 60 — 75 *missing values for countries: Egypt, Iran, Mongolia, Nicaragua, Saudi Arabia, Taiwan, and United Arab Emirates. www.martinprosperity.org | 33
  • 42. Global talent rankings Appendix B COUNTRY HUMAN CAPITAL CREATIVE CLASS TALENT INDEX Finland 1 8 1 Sweden 5 5 2 Singapore — 1 3 Denmark 8 7 4 New Zealand 4 14 5 Norway 7 9 6 Australia 12 4 7 United States 6 27 8 Greece 3 29 9 Slovenia 9 22 10 Netherlands 24 2 11 Belgium 22 6 12 Russian Federation 13 20 13 Latvia 10 23 14 Estonia 16 15 15 Lithuania 11 28 16 Canada 21 12 17 Italy 18 16 18 United Kingdom 23 11 19 Israel 26 13 20 Ireland 25 19 21 Switzerland 35 3 22 France 27 17 23 Republic of Korea 2 51 24 Hungary 20 24 25 Germany 31 10 26 Ukraine 14 31 27 Spain 15 34 28 Poland 19 30 29 Austria 32 21 30 Czech Republic 33 18 31 Taiwan — 33 32 Slovakia 46 25 33 Portugal 28 41 34 Serbia — 38 35 Argentina 17 62 36 Hong Kong 50 26 37 Bulgaria 41 35 38 Croatia 39 37 39 Kazakhstan 30 42 40 Egypt 48 32 41 Costa Rica — 43 42 34 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 43. COUNTRY HUMAN CAPITAL CREATIVE CLASS TALENT INDEX Cyprus 47 36 43 Bolivia 45 — 44 Japan 29 63 45 Uruguay 42 49 46 Macedonia 53 39 47 Georgia 43 50 48 United Arab Emirates — 47 49 Malaysia 51 40 50 Mongolia 38 54 51 Panama 37 65 52 Kyrgyzstan 44 60 53 Chile 34 67 54 Sri Lanka — 53 55 Thailand 36 68 56 Saudi Arabia 56 44 57 Ecuador — 55 58 Turkey 52 52 59 Jamaica — 61 60 Armenia 54 — 61 Peru 49 64 62 Romania 40 72 63 Philippines 55 59 64 Mexico 58 58 65 Brazil 60 57 66 Azerbaijan 66 45 67 South Africa 65 48 68 Nicaragua — 69 69 Trinidad and Tobago 67 46 70 Iran 59 66 71 Paraguay 57 70 72 El Salvador 62 71 73 Pakistan 69 56 74 India 68 — 75 China 61 75 76 Honduras 63 73 77 Viet Nam 64 74 78 Uganda 71 — 79 Indonesia — 76 80 Cambodia 70 77 81 Madagascar 72 78 82 www.martinprosperity.org | 35
  • 44. Global Creative Class rankings Appendix C RANK COUNTRY CREATIVE CLASS SHARE 1 Singapore 47.30 2 Netherlands 46.24 3 Switzerland 44.84 4 Australia 44.52 5 Sweden 43.88 6 Belgium 43.84 7 Denmark 43.71 8 Finland 43.35 9 Norway 42.11 10 Germany 41.57 11 United Kingdom 41.27 12 Canada 40.84 13 Israel 40.21 14 New Zealand 40.11 15 Estonia 39.64 16 Italy 39.26 17 France 39.24 18 Czech Republic 38.89 19 Ireland 38.84 20 Russian Federation 38.63 21 Austria 37.49 22 Slovenia 37.06 23 Latvia 35.47 24 Hungary 35.26 25 Slovakia 35.22 26 Hong Kong 35.22 27 United States 35.22 28 Lithuania 34.99 29 Greece 32.62 30 Poland 32.37 31 Ukraine 31.70 32 Egypt 31.38 33 Taiwan 31.34 34 Spain 30.98 35 Bulgaria 29.07 36 Cyprus 29.00 37 Croatia 28.85 38 Serbia 28.57 39 Macedonia 28.36 40 Malaysia 26.21 36 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 45. RANK COUNTRY CREATIVE CLASS SHARE 41 Portugal 25.28 42 Kazakhstan 24.77 43 Costa Rica 24.60 44 Saudi Arabia 23.15 45 Azerbaijan 22.67 46 Trinidad and Tobago 22.55 47 United Arab Emirates 22.02 48 South Africa 21.71 49 Uruguay 21.62 50 Georgia 21.40 51 Republic of Korea 21.30 52 Turkey 20.96 53 Sri Lanka 19.51 54 Mongolia 19.40 55 Ecuador 19.04 56 Pakistan 18.59 57 Brazil 18.52 58 Mexico 18.48 59 Philippines 18.41 60 Kyrgyzstan 18.40 61 Jamaica 18.32 62 Argentina 18.29 63 Japan 17.54 64 Peru 17.51 65 Panama 16.77 66 Iran 15.61 67 Chile 14.90 68 Thailand 14.66 69 Nicaragua 14.49 70 Paraguay 12.43 71 El Salvador 12.37 72 Romania 11.76 73 Honduras 9.44 74 Viet Nam 7.41 75 China 7.37 76 Indonesia 4.30 77 Cambodia 2.52 78 Madagascar 2.36 www.martinprosperity.org | 37
  • 46. Global tolerance rankings* Appendix D RACIAL AND ETHNIC COUNTRY GAYS AND LESBIANS TOLERANCE INDEX MINORITIES Canada 1 2 1 Ireland 3 5 2 Netherlands 16 1 3 New Zealand 2 12 4 Australia 4 8 5 Spain 14 3 6 Sweden 7 8 7 United States 5 12 8 Uruguay 11 5 9 United Kingdom 9 10 10 Norway 16 12 11 Hong Kong 11 16 12 Belgium 21 6 13 Denmark 21 9 14 South Africa 7 21 15 France 30 14 16 Singapore 7 34 17 Germany 25 17 18 Finland 27 18 19 Switzerland 39 16 20 Taiwan 13 37 21 Brazil — 21 22 Italy 30 19 23 Nicaragua 21 27 24 Cyprus 23 — 25 Costa Rica 25 27 26 Serbia 13 49 27 Chile 36 24 28 Malaysia 30 — 29 India 16 52 30 Argentina 45 23 31 Ecuador 33 31 32 Portugal 39 29 33 Hungary 33 34 34 Austria — 31 35 Mexico 52 23 36 Greece 41 31 37 United Arab Emirates 41 — 38 Panama 44 37 39 Madagascar 18 65 40 Philippines 62 25 41 Sri Lanka 21 67 42 38 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 47. RACIAL AND ETHNIC COUNTRY GAYS AND LESBIANS TOLERANCE INDEX MINORITIES Trinidad and Tobago 27 55 43 Romania 33 54 44 Bulgaria — 42 45 Croatia 41 47 46 El Salvador 55 34 47 Macedonia 30 57 48 Czech Republic 64 27 49 Armenia 49 — 50 Slovenia 55 39 51 Bolivia 49 42 53 Peru 49 42 53 Paraguay 58 39 54 Slovakia 52 44 55 Honduras 47 52 56 Kazakhstan 36 67 57 Poland 60 47 58 Uganda 36 70 59 Latvia 58 54 60 Japan 62 47 61 Republic of Korea 52 62 62 Georgia 43 72 63 Turkey 58 62 64 Kyrgyzstan 47 71 65 Israel 72 40 66 Thailand 66 50 67 Iran 65 — 68 Estonia 70 47 69 Viet Nam 64 59 70 Jamaica 58 68 71 Azerbaijan — 70 72 Mongolia 68 57 73 Russian Federation 68 62 74 Lithuania 72 59 75 Egypt 72 — 76 Ukraine 74 62 77 Indonesia 70 73 78 Saudi Arabia 75 — 79 Cambodia 77 62 80 Pakistan 76 — 81 *missing value for China. www.martinprosperity.org | 39
  • 48. Overall Global Creativity Index rankings Appendix E GLOBAL TOTAL RANK COUNTRY TECHNOLOGY TALENT TOLERANCE CREATIVITY INDEX 1 Sweden 5 2 7 0.923 2 United States 3 8 8 0.902 3 Finland 1 1 19 0.894 4 Denmark 7 4 14 0.878 5 Australia 15 7 5 0.870 6 New Zealand 19 5 4 0.866 7 Canada 11 17 1 0.862 7 Norway 12 6 11 0.862 9 Singapore 10 3 17 0.858 10 Netherlands 17 11 3 0.854 11 Belgium 16 12 13 0.813 12 Ireland 20 21 2 0.805 13 United Kingdom 18 19 10 0.789 14 Switzerland 6 22 20 0.785 15 France 14 23 16 0.764 15 Germany 9 26 18 0.764 17 Spain 24 28 6 0.744 18 Taiwan — 32 21 0.737 19 Italy 26 18 23 0.707 20 Hong Kong 22 37 12 0.691 21 Austria 13 30 35 0.663 22 Greece 38 9 37 0.638 22 Slovenia 23 10 51 0.638 24 Serbia 28 35 27 0.614 24 Israel 4 20 66 0.614 26 Hungary 33 25 34 0.606 27 Republic of Korea 8 24 62 0.598 28 Portugal 32 34 33 0.577 29 Czech Republic 25 31 49 0.553 30 Japan 2 45 61 0.541 30 Russian Federation 21 13 74 0.541 32 Costa Rica 43 42 26 0.528 32 Estonia 27 15 69 0.528 34 Latvia 39 14 60 0.520 35 Croatia 29 39 46 0.516 36 United Arab Emirates — 49 38 0.513 37 Uruguay 63 46 9 0.500 38 Argentina 55 36 31 0.484 38 Lithuania 31 16 75 0.484 40 Bulgaria 40 38 45 0.480 41 Slovakia 36 33 55 0.476 41 Poland 37 29 58 0.476 40 | Creativity and Prosperity: The 2010 Global Creativity Index
  • 49. GLOBAL TOTAL RANK COUNTRY TECHNOLOGY TALENT TOLERANCE CREATIVITY INDEX 43 Nicaragua — 69 24 0.474 44 Cyprus 59 43 25 0.463 45 South Africa 45 68 15 0.459 46 Brazil 41 66 22 0.455 47 Chile 48 54 28 0.451 48 Malaysia 54 50 29 0.439 49 Ukraine 34 27 77 0.419 50 India 42 75 30 0.382 51 Panama 65 52 39 0.346 51 Romania 49 63 44 0.346 51 Macedonia 61 47 48 0.346 54 Philippines 52 64 41 0.341 54 Armenia 46 61 50 0.341 54 Kazakhstan 60 40 57 0.341 57 Georgia 47 48 63 0.337 58 China 30 76 — 0.327 59 Ecuador 72 58 32 0.321 60 Bolivia 66 44 53 0.319 61 Mexico 62 65 36 0.317 62 Egypt — 41 76 0.316 63 Sri Lanka 69 55 42 0.305 63 Trinidad and Tobago 53 70 43 0.305 65 Kyrgyzstan 50 53 65 0.297 66 Peru 56 62 53 0.287 67 Uganda 35 79 59 0.276 68 Turkey 51 59 64 0.272 69 Mongolia — 51 73 0.270 70 Azerbaijan 44 67 72 0.236 71 El Salvador 67 73 47 0.220 71 Thailand 64 56 67 0.220 73 Jamaica 57 60 71 0.215 74 Honduras 58 77 56 0.203 75 Madagascar 70 82 40 0.199 76 Saudi Arabia — 57 79 0.191 77 Paraguay 71 72 54 0.179 78 Iran — 71 68 0.171 79 Viet Nam 68 78 70 0.102 80 Pakistan 73 74 81 0.053 81 Indonesia 74 80 78 0.037 82 Cambodia 75 81 80 0.020 www.martinprosperity.org | 41
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  • 53. Acknowledgments oUR teAm contAct Us Phone: (416) 673-8580 Fax: (416) 673-8599 Authors Email: info@martinprosperity.org Richard Florida Martin Prosperity Institute Charlotta Mellander Joseph L. Rotman School of Management Kevin Stolarick University of Toronto MaRS Centre, Heritage Building 101 College Street, Suite 420 Project team Toronto, Ontario, Canada M5G 1L7 Patrick Adler Richard Florida, Director Vasiliki Bednar Maggie Chen Marisol D’Andrea Mark Denstedt Michelle Hopgood Brian Hracs Karen King Dieter Kogler Zara Matheson Joe Minichini Kim Ryan Kim Silk Kevin Stolarick Ian Swain Jacqueline Whyte Appleby Design by michelle Hopgood. Maps by Zara matheson.
  • 54. Martin Prosperity Institute © January 2011 ISBN 978-0-9811974-3-2