When Numbers Define Innovation - A comparative field study comparing Global Innovation Index rankings with firm-level innovation realities in Japanese and Swedish manufacturing firms

Sammanfattning

This thesis examines the relationship between national-level innovation measurement andfirm-level innovation practices. It does so by comparing the innovation realities ofmanufacturing firms in Japan and Sweden with their respective countries' Global InnovationIndex (GII) scores. Although both countries are recognised as advanced industrial economieswith strong national innovation systems, their scores differ in the GII, where Swedenconsistently ranks among the world’s leading innovation economies while Japan ranks lower.The study investigates whether macro-level innovation indicators such as the GII accuratelyreflect innovation performance within firms. Drawing on innovation theory, the NationalInnovation Systems framework, and literature on innovation capacity and organisationalcapabilities, the thesis adopts a qualitative comparative field research design. Empirical datawas collected through semi-structured interviews with manufacturing firms in Sweden andJapan. The data was then analysed in relation to selected GII pillars: human capital andresearch, infrastructure, business sophistication, and knowledge and technology outputs.The findings indicate that the GII captures several important structural conditions that supportinnovation, including education, research investment, and collaborative networks. However,the study also demonstrates that macro-level indicators fail to fully account for howinnovation actually occurs at the organisational level. In particular, they do not sufficientlycapture organisational processes, managerial practices, and firm-specific capabilities thatinfluence innovation performance in practice. Among the interviewed firms, the Swedishfirms were characterised by collaborative cultures, flatter hierarchies, and decentraliseddecision-making, whereas the Japanese firms emphasised long-term planning, continuousimprovement, and process-oriented innovation practices. Despite these differences, firms inboth countries demonstrated strong innovation capabilities that were not always reflected innational rankings. The findings suggest that innovation performance cannot be fullyunderstood through aggregated national indicators alone. This is because certain aspects ofinnovation are difficult to reduce to a single number. Instead, innovation emerges through theinteraction between national innovation systems and firm-level organisational capabilities.The study contributes to innovation research by conceptualising the micro-macro gap ininnovation analysis and highlighting the limitations of relying solely on quantitativebenchmarking frameworks such as the GII when evaluating innovation performance.