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Cultural Drivers of Innovation


Innovation has been defined as the successful development of creative ideas. For innovation to happen, creative ideas that have economic value need to be recognized, validated, and implemented. There are many methods to quantify a nation’s capacity for innovation: self-employment rates, royalty and license fees, patents and trademarks, per capita income, and absorption rates for technological products.

The Global Innovation Index finds metrics, measurements and approaches to parametrise innovation. The GII integrates information from international trade, culture and financial organizations. GII includes a variety of measures of innovation (eighty different indicators) rather than a single measure (e.g. — the number of patents and trademarks) thus capturing a more complete picture of societal innovation. Innovation-related inputs are political, regulatory and business Institutions, Human resources, Technological Infrastructure, Market and business sophistication, worker knowledge, innovation linkages, and knowledge absorption.

Hofstede’s Dimensions of Culture

Culture is often perceived as a too complex and hard-to-define attribute. Culture has been defined as a system of shared meanings, beliefs, and values that have resulted from a group’s successful response to problems in the environment and a set of basic and shared beliefs and values among the people. “What differentiates one culture from another are its institutions and its ways of dealing with the variety of universal problems” and include unique approaches to work behaviour, conceptualization of management and leadership, and openness to changes in the status quo. A country’s culture determines the way its people respond to opportunities, risks and rewards.

Geert Hofstede proposed a “national culture model” in 1983, based on a large database of responses collated at IBM in 1967 and 1973 from employees of more than 70 countries. The respondents were from 40 countries initially but this extended to 50 countries later.

Hofstede (1) initially identified four dimensions of national culture that were largely independent: power distance (large to small), uncertainty avoidance (strong to weak), individualism versus collectivism, and masculinity versus femininity. Later, two other dimensions were added: indulgence versus restraint and short versus long-term orientation. The six cultural dimensions represent independent attributes which distinguish countries from one another (2).

Culture Models

Power distance is the measure of how much society adheres to formal power and status differences among its members and represents how a society deals with inequalities among individuals.

The higher the power distance, there is acceptance of a hierarchical order in which every member has a pre-determined place. Decisions are centralized and characterized by the use of formal rules and individuals have less possibility of participating in decision-making processes.

Hofstede suggested that lower power distance societies exhibit a greater tendency to innovate. Communication and information exchange is more common and people tend to balance the distribution of power and question inequalities in power sharing. Innovators may more easily manage relations across functional and hierarchical boundaries and are more apt to challenge assumptions, procedures, and authority figures. They may build independent networks of support, be more likely to minimize the importance of a superior’s acquiescence and go outside the immediate hierarchy for support. The lower the power distance higher the trust between hierarchies, which creates a liberated environment characterised by higher creativity where ideas are generated. Countries that have decentralised structures and lower power distance tend to generate more innovation (4).

Individualism reflects a weakly-knit social structure, where individuals are concerned with only themselves and their close kins. Individualistic societies place a higher value on personal goals. Such cultures boost innovation because citizens are freer to generate and execute ideas and are less concerned about group opinion. Creativity stems from individuals, and may even express ideas challenging prevalent group norms.

In contrast, collectivism prefers a more integrated social structure, where individuals are dependent more on their relatives or peers. Collective societies place a higher value on group goals and individuals tend to place their interests subordinate to the group interests. There is a reluctance to promote new ideas that challenge society and jeopardize relationships.

Masculinity versus femininity is the third dimension. Masculinity favours achievement, heroism, assertiveness and material rewards for success, making societies more competitive (1). Masculine cultures show less gender egalitarianism. They stimulate competition where material rewards are sought, making people less innovative.

Feminine cultures give more stress to relationships and exhibit greater gender egalitarianism. The focus is on people and cooperation, creating environments that may facilitate innovation. Employees are empowered, form the alliances necessary for innovation to occur, and use a more robust measure of innovation that captures innovation inputs as well as outputs. Society is more error-tolerant and people become more innovative. Collaborative environments have a higher innovation potential.

The fourth dimension, uncertainty avoidance, is a measure of how much a society is uncomfortable with the uncertainty of the future and indicates the willingness to assume risk. Hofstede suggested that societies with low uncertainty avoidance are more likely to believe that practice is more important than principles and encourage innovation and entrepreneurship.

In high uncertainty avoidance cultures, innovators may be less likely to violate organizational procedures or societal norms, even when doing so would further their project or new venture. Cultures scoring high on Uncertainty Avoidance tend to frame rules to minimize ambiguity. They develop rigid codes of belief and behaviour that are intolerant of new ideas.

A fifth dimension was added to Hofstede’s framework in 1991: Long-term/short-term orientation. The Long-term/Short-term Orientation dimension represents a range of Confucian-based principles and reflects the difference between a dynamic, future-oriented society (positive Confucian dynamism — longer-term perspective) versus a more static, tradition-oriented one (negative Confucian dynamism — shorter-term perspective).

In societies with a longer-term perspective, dominant values are likely to be perseverance, hard work, shame, and thrift. Higher the degree of Long-term Orientation, there was increased adoption of innovations. They encourage economic advancement and make efforts to advance education as a tool for improving the future. The culture is directed towards planning, encourages experimentation, and has higher error tolerance.

Short-term societies tend to have values rooted in the past, including the concepts of “face” and reciprocation, concerns for traditions and fulfilling social obligations. Societies with a short-term inclination prefer maintaining time-honoured customs and traditions while responding to social change with caution and are less innovative.

In 2010, a sixth dimension called Indulgence versus Restraint was included. Indulgent societies are more prone to the gratification of basic human drives associated with enjoying life and pleasure and may encourage innovation as a tool to continually satisfy such drives. People are more optimistic. Restrained societies suppress gratification of needs by applying strict social norms.

Conclusions

Studies on the cultural drivers of innovation confirm that national culture has a positive association with national innovation potential. Innovation performance is not only determined by the sufficiency of basic technological and financial infrastructures but also influenced by personality characteristics reflective of the society. It is generally agreed that national innovative capacity is not influenced by the national income. High incomes need not guarantee a higher innovation capacity. Human Development Index and national innovative capacity seem to be positively correlated.

1. Hofstede, G. (2011). Dimensionalizing cultures: The Hofstede model in context. Online Readings in2. Psychology and Culture, 2(1), 1–26. Retrieved from: [https://doi.org/10.9707/2307–0919.1014](https://doi.org/10.9707/2307-0919.1014)

2. Aline Espig, Igor Tairan Mazzini, Clarice Zimmermann, Luciano Castro de Carvalho, National culture and innovation: a multidimensional analysis, Innovation & Management Review [https://www.emerald.com/insight/content/doi/10.1108/INMR-09–2020–0121/full/html

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