How culture affects innovation when applied in different countries

Ana Vilar García

In previous blog posts we have talked about the many different types of innovation there are. But apart from the differences regarding how it affects the company and its processes, innovation in companies can also differ depending on the culture where it takes place.

Cultural differences in countries and companies can shape the way innovation looks, and this is why we have elaborated on the subject with a particular focus on corporate innovation: How does culture influence innovation?

What are the most innovative countries in the world?

One of the most obvious cultural differences is the country where innovation takes place. According to the World Intellectual Property Organization (WIPO), with the collaboration of Statista, these are the most innovative countries in the world in 2021. This ranking is based on criteria such as human capital, institutions, technology, creative output, and market and business sophistication, among others.

  1. Switzerland: 65.5
  2. Sweden: 63.1
  3. United States: 61.3
  4. United Kingdom: 59.8
  5. South Korea: 59.3
  6. The Netherlands: 58.6
  7. Finland: 58.4
  8. Singapore: 57.8

Another great criteria for innovation is the country’s startups and entrepreneurial system. Measuring the amount of startup launching in each country, with particular focus on startup success rate can also determine how innovative a determined country is. 

Taking into account this criteria, a study launched by StartupBlink revealed these are the top startup ecosystems in 2021. The criteria used to establish this ranking not only takes into account the number of startups, but also their quality and their business environment.

  1. United States
  2. United Kingdom
  3. Israel
  4. Canada
  5. Germany 
  6. Sweden
  7. China
  8. Switzerland
  9. Australia
  10. Singapore

How does corporate innovation look in different stages

Startups are an important part of a country’s innovation ensemble. And depending on how far the country is in the innovation race, startups and innovations respond to different needs. 

Digital transformation

The very first phase of innovation nowadays is going through digital transformation. Depending on the sectors, digitalization is not at all an obvious or easy step. 

In this regard, the ‘Digitalization Indicator’ developed by Innovation Indicator reveals the digital race is led by Finland, Sweden, Denmark, Norway, United States, United Kingdom, Australia, the Netherlands, Switzerland and Israel. As you can see, many of these countries coincide with the top startup ecosystems, where more and better startups are created.

If we compare the Spanish innovation ecosystem with the one in the United States, it is normal that most of the innovation efforts carried out by Spanish corporations is still digitalization. Actually, as we have found out in our podcast on corporate innovation, many large corporations elaborate innovation programs based on analogous programs coming from the US, most of them focusing on the digital transformation.

Open innovation: Collaboration between startups and large corporations

Once digitalization is overcome, open innovation programs arise. It is common that a country’s business ecosystem starts exploring digital transformation first, and then proceeds to collaborate with the entrepreneurial world. This process can also allow digital transformation, but it also contributes to finding brand new ideas or starting new business models from scratch.

When it comes to corporate innovation, open innovation is one the most beneficial models there are. Thanks to open innovation, startups can be launched and developed and their technology can be used in large corporations thanks to their resources. The synergies between these two types of companies has proven to be a powerful way to boost innovation.

Cultural norms and innovation

When we talk about innovation, differences among countries not only rely on their economic level, the business and scientific environment or their startup and entrepreneurial ecosystem. The culture itself can also shape the way people innovate.

Innovation departments are formed by people, and people and the way they work differ from country to country. Cultural norms influence the way people interact and also how they work

Following a simplistic classification, cultures can be divided into tight or loose, individualistic or collectivist. As you can imagine, these traits have an impact on how innovation is carried out, but how? Measuring these differences is certainly difficult. Studies have shown that Western countries tend to be more creative, but more individualistic; while Eastern countries are less creative, but are more prone to collectivism. Even though these characteristics are important for innovation, they are too intangible and can’t be considered to differentiate innovation models based on culture. 

In any case, culture does affect the way people and companies innovate, along with many other factors, such as economic development, the role of institutions towards science, or the business maturity. Will we see differences on how innovation looks in the top innovative countries? How will further innovation phases look in the future in these countries? Stay tuned and keep an eye on our blog and podcast to hear the latest trends and processes regarding corporate innovation.

At Corporate Lab, we're experts in innovation. Corporate Lab is a venture studio specialized in creating new startups for large corporations.If you run a company and want to include corporate innovation in your roadmap, send us a message. We can detect new business opportunities and build new businesses to complement your existing ones.

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