What Influences Innovation Score for Countries at Different Levels of Development? Examining the Effects of Teaching, Research and Knowledge Transfer

We examine whether all three roles of universities (education, research and development, and collaboration with industry for knowledge transfer) are essential for a country's innovation relative to other countries and its peers. The study employs OLS and path analysis to determine the significant indicators affecting the global innovation score of 131 countries, with details for each quartile of countries (by income). The study used expenses on education, government funding of secondary education, tertiary enrolment, graduates in science and technology, number of researchers, expenditures on R&D, university ranking, and university–industry collaborations as the eight explanatory variables, proxies for the three roles. At a global level, the findings reveal that a country's innovation rank is based on all these three roles but only six of the explanatory variables. An income quartile-wise analysis indicates that innovation scores may not include the three functions. The negative impact of primary and secondary education is significant only for upper-middle-income countries. Knowledge transfer influences innovation scores mainly in very high-income countries. Within low-middle-income countries, primarily tertiary enrolment (education) affects the innovation score. Therefore, the study recommends that policymakers who seek to improve their country's innovation scores should look at what their peer group countries are doing.