Andres Oppenheimer

Andres Oppenheimer: Latin America beats China, India in creativity

Interesting: a new world ranking shows that many Latin American countries are way ahead of China and India in creativity, and suggests that — if they improve their education and technology standards — they could be among the world’s most competitive economies.

The 2015 Global Creativity Ranking, put out by the University of Toronto’s Martin Prosperity Institute, combines separate rankings of what it calls the three T’s of economic development: talent (college-educated populations), technology (registered patents and investments in research and development) and tolerance (acceptance of ethnic minorities and gay and lesbian populations).

While Latin American countries are significantly behind Asian nations in education and technology, many of them are rank high in tolerance, or open-mindedness. Unlike most other creativity rankings, this one considers tolerance as important as education or technology for countries’ economic development.

The most creative country in the world this year was Australia, followed by the United States (2), New Zealand (3), Canada (4), and Denmark and Finland (tied in 5th place), according to the new ranking. Further down the list are Singapore (9), Switzerland (16), Spain (19) and Japan(24).

But shortly thereafter are Uruguay (26), Argentina (27), Brazil (29), Nicaragua (32), Chile (34), Costa Rica (36), Cuba (41), Ecuador (44), Jamaica (50), Panama (56) and Venezuela (60). By comparison, China ranks 62 and India 99 in the 139-country list.

Curious about Latin America’s relatively good standing, I called one of its leading authors, University of Toronto professor Richard Florida. He is the author of The Creative Class, a book in which he argues that places with high concentrations of creative people are increasingly attracting technology firms, and not the other way around.

Florida told me that the reason why many Latin American countries - with some notable exceptions, such as Mexico, which ranks 73 — scored much better than China and India may have to do with the fact that they are more urbanized. Their urban populations and rapidly growing middle classes help make them more open-minded toward minority groups and people who think differently, he said.

Asked why tolerance is such a big factor in his creativity index, Florida said that it’s no coincidence that the world’s most innovative countries, such as Australia or the United States, are also among the most tolerant with minorities or gays. Conversely, most Middle Eastern countries that persecute minorities or gays do much worse in creativity and innovation, he noted.

“A growing body of research finds that openness to diversity spurs economic development, while homogeneity stunts economic growth,” the global creativity index’ study says. “Places that are open to new ideas also tend to attract creative people from around the globe that provide an edge in generating innovations and startup companies.”

Thanks to their openness to diversity, cities such as Sao Paulo and Buenos Aires have become world-class centers of music, films, fashion designs, video-games and other creative activities. But this alone won’t help Latin American countries to significantly speed up their economic development, Florida said.

“It’s not that a tolerant economy will automatically become a competitive economy,” Florida told me. “Rather, as we see happening in Silicon Valley, tolerance in combination with technology and a good education system will make you competitive.”

My opinion: The 2015 Global Creativity Index is a welcome addition to global innovation rankings, although it may overrate tolerance as a development factor by considering it just as important as education and technology standards.

When it comes to economic progress, tolerance is important, but only if it goes hand in hand with quality education and investment in innovation.

The new index lists poverty-ridden Nicaragua (32) almost tied with highly industrialized South Korea, thanks to Nicaragua’s much higher score in tolerance. But the fact is that, while the two countries were once similarly poor, Nicaragua today has a per capita income of $4,500, while South Korea’s is $33,500. Unlike Nicaragua, South Korea invested heavily in high-quality education.

While Nicaragua registered only 1 international patent last year and is in last places in world education rankings, South Korea registered 18,000 international patents last year, and ranks at the top of global education indexes.

Still, it is true that Latin America has a competitive advantage in open-mindedness over China, India, South Korea and other emerging economies, which could potentially be a big boon for its economy. If Latin America improved its dismal education and technology standards, its average per capita income could soon catch up and surpass those of Asia’s emerging powers.