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Scientific American Worldview Scorecard Correlates with International Investment

June 17, 2013
Biotechnology innovation requires investment, and the Scientific American Worldview Scorecard can predict where investment goes. A recent analysis indicates that the ranking of countries in this Scorecard correlates with global investment. As a result, the Worldview Scorecard provides a valuable tool for any country interested in increasing its appeal to biotechnology investors.

In short, the Worldview Scorecard uses a wide collection of data – compiled and analyzed by Yali Friedman – that generates a metric that rates a country’s innovation potential in biotechnology. The 2013 Scorecard, which rolled out at this year’s annual BIO International Convention in Chicago, ranked 54 counties on absolute and relative parameters, ranging from intellectual property protection and the revenue generated by public biotechnology companies to the rule of law and life science PhD graduates per capita. The algorithm behind the Scorecard provides opportunities for large and small countries to compete on this metric. In the end, a country’s score arises from components that focus on both its broad development of an environment that fosters innovation as well as much more specific components that measure a country’s current capabilities to spawn innovation in biotechnology.

WorldviewGraphThe 2013 Venture Capital and Private Equity Country Attractiveness (VCPECA) index shows a strong connection with the recent Scientific American Worldview Scorecard. The VCPECA is produced by Alexander Groh of the Emlyon Business School in Écully, France, and Heinrich Liechtenstein and Karsten Lieser, both from the IESE Business School in Barcelona, Spain. The authors describe this index as a “comprehensive research project on how to measure the attractiveness of a country for investors in Venture Capital (VC) and Private Equity (PE) limited partnerships.”

The 2013 VCPECA index includes all of the countries in the Scientific American Worldview Scorecard, except Puerto Rico and Qatar. Consequently, it is possible to compare a country’s score on the VCPECA index with its final result in the Worldview Scorecard. The analysis shown here – a scatter plot of scores on the VCPECA index versus scores on the Worldview index – reveals a strong correlation between the two measurements. In fact, linear regression of the data reveals a correlation coefficient of 0.77.

Although the VCPECA index considers VC and PE investment overall and the Worldview Scorecard focuses on a country’s innovation potential in biotechnology, the two still show a relatively strong correlation. Consequently, this analysis indicates that the Scientific American Worldview Scorecard provides a strong indicator of where investment goes. Presumably, the correlation between investment and the Scorecard would grow even closer if it could be compared to a biotechnology-focused investment index. Nonetheless, these results deliver a clear take-home message: A country that wants to attract more investment should improve its capabilities in the components used in the Scientific American Worldview Scorecard. This metric provides a clear checklist that could take a country from a biotech wanna-be to an international competitor.

Mike May is a freelance writer and editor who specializes in science and technology, runs the BestInBiotech blog and is also the editorial director of Scientific American

Watch Mike May interview Dr. Andrew Powell, CEO, Asia Bio Business at the BIO International Convention.