NIC Economic growth: National intellectual capital NIC as economic driver

National Intellectual Capital NIC as Economic Driver

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Short background and introduction

SAIKA and ELSS NIC models
National intellectual capital NIC
ELSS reseach and development team:
Leif Edvinsson - Carol Lin
Pirjo Ståhle - Sten Ståhle
NIC structured database 2012
National intellectual capital NIC indicators
Denoting NIC indicator classes
National human capital NHC
National market capital NMC
National process capital NPC
National renewal capital NRC
National financial capital
National total factor productivity
Data sources 2012
Countries in database
Advanced database 2012
Notes on database
Last updates

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NIC Main: NIC 2001 - 2011 NIC Main: NIC 2001 - 2011

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Background and introduction

SAIKA and ELSS / Short background

The main framework for measuring the impact of national intellectual capital (NIC) on GDP formation and GDP annual growth was developed within SAIKA project ( Intellectual Capital as a Driver of National Economy) in Finland Futures Research Centre at University of Turku, and funded by the Finnish Funding Agency for Technology and Innovation (TEKES) during 2010-2011.
The head of the project was Professor Pirjo Ståhle and the head researcher was Chief analyst Sten Ståhle.

Pirjo Ståhle

Professor at Aalto university, Helsinki, Finland and Professor at Futures Research Centre at University of Turku, Finland. Professor Pirjo Ståhle is often mentioned as a pioneer of Knowledge Management and Intellectual Capital in Finland: She was the country's first-ever Chief Knowledge Officer (Sonera 1998-2001), first Professor of Knowledge Management (Lappeenranta University of Technology 2001-2007), and her book on Knowledge Management (together with M. Grönroos) was the first Finnish book on this subject. Professor Ståhle is a board member of the New Club of Paris, an international forum dedicated to knowledge society issues.

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Sten Ståhle

Chief analyst at Business Information Analysis and Consulting, BIMAC, Helsinki, Finland. Sten Ståhle is a prominent researcher studying and modeling the impact of intellectual capital on economic performance and competitiveness. Main focus areas are the measuring of intellectual capital efficiency and determining the underlying inter dependencies of various intellectal capital components. Since mid 90�s he has been coworker in several publications (e.g. Towards measures of national intellectual capital: an analysis of the CHS model, 2012, Value Added Intellectual Coefficient (VAIC): A critical analysis, 2011, National Intellectual Capital as an Economic Driver: Perspectives on Identification and Measurement, 2008, Intellectual Capital and National Competitiveness: Conceptual and Methodological Challenges, 2006) and several projects (e.g. Educational Intelligence System EIS, 2006). Currently he is continuing working within the SAIKA project studying and modeling impacts of national intellectual capital on economic growth.

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NIC drivers/indexes / Short background

NIC indexes are modified from the work by Leif Edvinsson and Carol Lin.
Visit www.nic40.org for more information about the work (2011). National Intellectual Capital: A Comparison of 40 Countries

Leif Edvinsson

Professor of Intellectual Capital, University of Lund, Sweden. Leif Edvinsson is a leading expert on Intellectual Capital, IC. He was the worlds first corporate director of Intellectual Capital at Skandia in Stockholm, Sweden. He has been a key contributor to the theory of IC and oversaw the creation of the world�s first corporate Intellectual Capital Annual Report."

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Carol, Yeh-Yun Lin

Distinguished professor and researcher in Intellectual Capital, IC, Department of Business Administration at National Chengchi University, Taipei, Taiwan & Taiwan Intellectual Capital Research Center (TICRC).

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Shortly about NIC drivers/indexes

The database focuses on (analysing) impact of NIC and demographic structures on social change and economic growth.

Database 2011/12, covering 2001 - 2011, 48 countries (see countries below) and consisting of 2+48 main variables (see data list) is structured into nine (9) distinct data sets:

Economic and geographic region(s) to which country belong (2)
Region by developmental stage(s) of country (2)
National intellectual capital NIC composite index values (1+4)
NIC impact on GDP formation as share of GDP (2+1+4+48)
NIC impact on GDP growth as share, fraction of GDP % growth (2+1+4+48)
Economic performace measures and basic tangible economic drivers affecting economic performance (4+4+20)
Natural resources and excess finacial comparative advantages (RCA) affecting economic performance (4+1)
Infrastructural and economic structures which affect economic performance (3+4)
Demographics affecting NIC impact in GDP formation and growth (5)

Note: Database 2011/12 is continually updated (last update) and subject to changes. Full list of data (data list).

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Data sources 2012

NIC indexes are modified from the work by Edvinsson and Lin (2011) National Intellectual Capital: A Comparison of 40 Countries
Here used NIC indexes (and underlying basic indicators) are in additon 1) z- or sigmoid normalized and 2) capitalized for 2001 - 2011
NIC indexes are also 3) aggregated by demographic (metropol, clustering, industrialization and dependency ratio) infrastrucures and productivity impact (correlation to country specific TFP)
Used Economic and demographic data:

Data from various public databases, eg. EUROSTAT, UN, IMF, WB, OECD, WTO and ILO
IMD online data
WEF and other alike general competitiveness reports public data, e.g. INNODRIVE
Latest data from national statistical (governmental) centres
Data for 2011 should be viewed with care, as data is yet often based on estimates

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Countries in database 2011/12

Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, China Mainland, Colombia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Romania, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, USA and Venezuela.

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Data and variables in database 2011/12

1. Countries 1 - 48.

2. General list of data and variables in data base.

2.0. Year and Dummy

YEAR
Year 2001 to 2011
LINE 01 (Dummy for NO SIZE OF BUBBLE, can not be selected / chosen)

2.1. Economic and Geographic regions

1a,b Economic region, EREGION
1c,d Geographic region, GREGION

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2.2. Developmental stage

2a Developmental stage as 1) Developed, 2) Transitional and 3) Developing, ESTAGES3
2b Developmental stage as 1) Highly developed, 2) Developed, 3) Transitional, 4) Further developing and 5) Developing, ESTAGES5

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All data 2.3. - 9. cover years 2001 - 2011. Monetary values are PPP adjusted and in US$.

2.3.0.1.1-48. National intellectual capital NIC basic index values 2.3.0.2.1-12. National financial capital NFC basic index values

3a Overall National intellectual capital index values, NIC, NICg (growth %)
3b National human capital index values, HC, HCp (as % of NIC) and HCg (growth %)
3c National market capital index values, MC, MCp (as % of NIC) and MCg (growth %)
3d National process capital indexvalue, PC, PCp (as % of NIC) and PCg (growth %)
3e National renewal capital, RC, RCp (as % of NIC) and RCg (growth %)

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2.4. Impact of NIC on GDP as share of GDP formation (%)

4a Impact of Global markets development and access to general TFP enhancers, MTFP and MTFPp (as % of GDP)
4b Impact of Domestic markets development and access to embedded TFP, DTFPp (as % of GDP)
4c Total impact of national intellectual capital on GDP, NICIp and NICIg (growth %)
4d Impact of national human capital on GDP, HCIp (as % of GDP) and HCIg (growth %)
4e Impact of national market capital on GDP, MCIp (as % of GDP) and MCIg (growth %)
4f Impact of national process capital on GDP, PCIp (as % of GDP) and PCIg (growth %)
4g Impact of national renewal capital on GDP, RCIp (as % of GDP) and RCIg (growth %)

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2.5. Impact of NIC on GDP (annual) growth as share (fraction) of total GDP growth

5a Share in GDP growth of Global markets development and access to general TFP enhancers, MTFPg
5b Share in GDP growth of Domestic markets development and access to embedded TFP, DTFPg
5c Share in GDP growth of overall national intellectual capital, NICG and NICGg (growth %)
5d Share in GDP growth of national human capital, HCG and HCGg (growth %)
5e Share in GDP growth of national market capital , MCG and MCGg (growth %)
5f Share in GDP growth of national process capital , PCG and PCGg (growth %)
5g Share in GDP growth of national renewal capital, RCG and RCGg (growth %)

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2.6. Economic performance and basic tangible economic drivers

6a Gross Domestic Production, GDP(PPP)
6b Gross fixed capital formation, CAP, CAPp (as % of GDP), CAPg (growth %) or CAPa (a=adjusted by natural etc. enhancers)
6c Gross governmental debt, DEBT, DEBTp (as % of GDP), DEBTg (growth %) or DEBTa (adjusted)
6d Total FTE workforce, EMP, EMPp (as % of POP) or EMPg (growth %)
6e GDP/EMP or GDP/EMPg (growth %)
6f GDP/CAP or GDP/CAPg (growth %)
6g CAP/EMP or CAP/EMPg (growth %)
6h DEBT/CAP or DEBT/CAPg (growth %)

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2.7. Natural recources and excess competitive financial advantages RCA enhancing GDP and GDP growth

7a Minerals, oil and fuels, export balance as % of GDP, OILb, and import + export as % of 2xGDP, OILt
7b Iron, steel and chemicals, export balance as % of GDP, IRONb, and import + export as % of 2xGDP, IRONt
7c Financial services, export balance as % of GDP, FINANCEb, and import + export as % of 2xGDP, FINANCEt
7d Labour cost, LABOURW and LABOURWg (growth %) 7e OTHERS (country specific, notes provided when used)

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2.8. Infrastructural and economic structures which - via aggregation - affect economic performance adjustments

Data 8a - 8c may be expressed as share of population POP, employment EMP or GDP formation.
Data 8d - 8g may be expressed as share of employment EMP or GDP formation.

8a Inhabitants living in metropol areas as % of population, METROPOPp and METROPOPg (growth %)
8b Inhabitants living in urban areas (exl. metropols) as % of population, URBANPOPp and URBANPOPg (growth %)
8c Inhabitants living in rural areas as % of population, RURALPOPp and RURALPOPg (growth %)
8d Employment in public sector, PUBEMP, PUBEMPp (as % of EMP) or PUBEMPg (growth %)
8e Employment in private service sector, PRIVSERVEMP, PRIVSERVEMPp (as % of EMP) or PRIVSERVEMPg (growth %)
8f Employment in industry sector, INDEMP, INDEMPp (as % of EMP) or INDEMPg (growth %)
8g Employment in agriculture sector, AGRIEMP, AGRIEMPp (as % of EMP) or AGRIEMPg (growth %)

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2.9. Demographics

9a Population, POP, POPg (growth %), POP15 (population in cohort <15), POP15p (population in cohort <15 as % of POP) and POP15pg (gowth %). Cohort >65 (or other) alike (e.g. effective entry-age in labor and effective entry-age in retirement).
9b Dependency ratio (%), DEPENDENCYp and DEPENDENCYg (growth %)
9c GDP/POP and GDP/POPg (growth %)
9d CAP/POP and CAP/POPg (growth %)
9e DEBT/POP and DEBT/POPg (growth %)

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NOTE1: The "nominal", "p" and "g" optionality significantly increases data items.
NOTE2: This list does not contain the specific NIC indicators for Financial capital, HC, MC, PC and RC.

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NIC National intellectual capital NIC indicators and variables

About detoting NIC classes
National human capital NHC
National market capital NMC
National process capital NPC
National renewal capital NRC
National financial capital
National total factor productivity

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Denoting different NIC classes

Each indicator/driver is denoted by a prefix n, c, d or e.
Indicator prefix n:

n : Normalized indicator value. E.g. nNIC.
Maximum MAX value 2001 - 2011 and all countries = 10.
Minimum min value 2001 - 2011 and all countries= 2.
Median MED value 2001 -2011 and all countries = 5.
Outliers processed using Sigmoid (or Sigmoid like) normalization.

Indicator prefix c:

c : Capitalized indicator value. E.g. cNIC
Capitalization for HC: Previous years has greater impact, e.g. effects of HC accumulates over time.
Capitalization for MC: Present year has greatest impact, e.g. effects of MC depricate over time.
Capitalization for PC: Past 5 years has greates impact, e.g. balancing around 5 years: older than 5 years depricate and newer than 5 years ago accumulate with maximum weight at 5 years ago.
Capitalization for RC: Past 3 years has greates impact, e.g. balancing around 3 years: older than 3 years depricate and newer than 3 years ago accumulate with maximum weight at 3 years ago.
Due to capitalization MAX/min/MED may differ from 10/2/5.

Indicator prefix d:

d : Capitalized indicator value when demograpichs is acknowledged. E.g. dNIC.
Metropolization and clustering. Both enhance NIC.
Domestic market size. Enhances NIC.
private and public service GDP contribution ratio. Private enhances NIC more than public.
Industrial and agricultural GDP contribution ratio. Industrial enhances NIC more than agricultural.
Due to capitalization and aknowledged demographics MAX/min/MED may differ from 10/2/5.

Indicator prefix e:

e : Drivers accumulated, over time impact in GDP formation as percentage (%) of GDP. E.g. eNIC.
In general : 0% < eNIC = eNHC + eNMC + eNPC + eNRC < 100%.
For single driver xx, i.e. eNRC1 "(availability of) Business R&D spending" : 0% < eNRCxx < eNRC < eNIC < 100%.

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NIC National human capital NHC indicators

NHC1. Skilled labor*
NHC2. Employee training*
NHC3. Secondary education up enrollment
NHC4. Pupil-teacher ratio
NHC5. Public expenditure on education
NHC6. 15-64 years old population
NHC7. Qualified engineers*
NHC8. Students PISA performance
NHC9. Human Development Index
NHC10. Gender equality
NHC11. Years of education
NHC12. R&D researchers

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NIC National market capital NMC indicators

NMC1. Corporate tax encouragement*
NMC2. Cross border venture*
NMC3. Openness of culture*
NMC4. Transparency of government policies*
NMC5. Image of your country*
NMC6. Capital availability*
NMC7. Trade to GDP ratio (exports + imports)
NMC8. Current account balance %GDP
NMC9. Investment flows %GDP
NMC10. Country credit rating
NMC11. Investment risk
NMC12. Globalization index

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NIC National process capital NPC indicators

NPC1. Business competition environment*
NPC2. Government efficiency*
NPC3. Computer per capita + Mobile subscribers
NPC4. Internet subscribers + Broadband subscribers
NPC5. Convenience of establishing new firms + start up days*
NPC6. Goods & services distribution efficiency*
NPC7. Overall productivity
NPC8. Unemployment % + Youth unemployment %
NPC9. Consumer price inflation
NPC10. Health & environment
NPC11. Corruption
NPC12. Freedom of speech

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NIC National renewal capital NRC indicators

NRC1. Business R&D spending
NRC2. Basic research*
NRC3. R&D spending/GDP
NRC4. R&D US$ per capita
NRC5. IP right protection*
NRC6. Utility Patents/ R&D expenditure
NRC7. Cooperation between corporations and university*
NRC8. Scientific articles
NRC9. Patents per capita (USTPO+EPO)
NRC10. Entrepreneurship*
NRC11. Development & application of technology*
NRC12. Venture capital*

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NIC National financial capital NFC variables

NFC1. GDP per capita at PPP
NFC2. Government surplus/deficit % of GDP
NFC3. Real government debt % growth rate
NFC4. Foreign Debt % of GDP (government and business)
NFC5. US$ currency exchange rate (or weighted US$ & Euro)
NFC6. Long term interest rate
NFC7. Effective country govt long term debt interest rate
NFC8. Gross fixed capital formation per capita
NFC9. Stock market capital formation as % of GDP
NFC10. FDI inwards % of GDP
NFC11. FDI outwards % of GDP
NFC12. Value of special natural and financial resources /services (export - import as % of GDP)

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National total factor productivity NTFP variables

NTFP1. GDP at PPP (nominal)
NTFP2. Labor force L (nominal)
NTFP3. 1. Gross fixed capital formation K (nominal)
NTFP3. 2. Gross (intangible) investment capital formation N (nominal)
NTFP4. Working hours per year (nominal)
NTFP5. Total wages / compensations (nominal)
NTFP6. Compensation per hour w (nominal)
NTFP7. National debt (nominal)
NTFP8. FDI inwards (nominal)
NTFP9. FDI outwards (nominal)
NTFP10. 1-3. Sectoral breakdown % of GDP (part of EMS estimates)
NTFP11. 1-3. Population demographic structure (Urban-Rural)
NTFP12. Energy consumption TOE (part of EMS estimates)
NTFP13. Energy intensity as MTOE/GDP (part of EMS estimates)
NTFP14. Key Natural Resources (nominal)
NTFP15. Key Financial services (nominal, part of EMS estimates)

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Last UpDates

Data: Oct 2012
Site: Oct 2012

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Data in world map NIC 2001 - 2011

Selector 1: NIC indexes and impact on GDP
Selector 2: Wealth and productivity in the world
Selector 3: Years 2001 - 2011

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Selector 1: NIC indexes and impact on GDP

1.1. National IC, NIC index values

Overall national IC, NIC
National human capital, NHC
National market capital, NMC
National process capital, NPC
National renewal capital, NRC

NOTE: Index values are 1) normalized, 2) capitalized and 3) economic and demographic country specifics are accounted for

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1.2. NIC percentage shares in GDP formation

Overall NIC share in GDP(PPP) formation
Human capital HC share in GDP(PPP) formation
Market capital MC share in GDP(PPP) formation
Process capital PC share in GDP(PPP) formation
Renewal capital RC share in GDP(PPP) formation
Global and domestic markets and TFP
Global markets and general TFP, MTFP
Domestic markets and country TFP, DTFP

NOTE: In calculations annual GDP is the sum of its components, e.g. we calculate

GDP = TFP + NIC
TFP = MTFP + DTFP contains direct TFP and effects of global and domestic markets M/D, capital K, investments N and labor L
NIC = NHC + NMC + NPC + NRC contain effects of human, market, process and renewal (innovation) capital, e.g. national IC

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1.3. NIC percentage fractions of GDP annual growth

GDP(PPP) real growth (%)
Overall NIC share/fraction in GDP annual growth
MTFP+DTFP share/fraction in GDP annual growth
MTFP share/fraction in GDP annual growth
DTFP share/fraction in GDP annual growth

NOTE: In calculations annual GDP (percentage) growth is the sum of its components, e.g. we calculate

GDP annual growth = MTFP growth + DTFP growth + NIC growth

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1. Used abbreviations:

GDP: Gross Domestic Product
PPP: Purching Power Parity (adjusted)
TFP: Total Factor Productivity
MTFP: Global markets and that part of TFP affecting the economy via global markets and globalization
DTFP: Domestic markets and that part of TFP affecting the economy via domestic markets and domestic (TFP) specifics

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Selector 2: Wealth and productivity

2.1. National wealth and productivity

Wealth: GDP(PPP) per capita
Productivity: GDP(PPP) per employer

NOTE: GDP per capita is a general measure for wealth and prosperity of a nation. Productivity on the other hand is measured by GDP per employer.

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Selector 3: Year 2001 - 2011

2.1. Year

Year 2001 - 2011

NOTE: Data is shown for selected year
NOTE: Data for 2011 should be viewed with some care as basic data in some cases are still based on estimates, e.g. national statistics for 2011 are still lagging behind

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NIC Main: NIC 2001 - 2011 map

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Open scrollbar by selecting right/arrow/down

Select NIC index/variable or year by moving cursor on index/variable or year
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NIC Main: Work with NIC 2001 - 2011 maps

NIC Main: Using NIC 2001 -2011 world maps

Working with Motion charts

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NIC Main: Using NIC 2001 -2011 world maps

Put cursor on country to see country details
To see Europe: Zoom UP: Left click below map
To zoom BACK: Left click below map

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Working with Motion charts
How to use the Data Explorer

Every bubble represent a country (put cursor on bubble to view details)

Country labels

To select or unselect country: Click bubble or ... select/unselect from checkbox window right/lower (valitse / select)
You can "grabb" and move the lable in the graph-window by left clicking, holding left mouse key down and move the lable where You want it (hany when label overlaps trails or nearby neighbours)

Running through data for 2001 - 2011

RUN the motion chart (powerd by Google Docs) by clicking the arrow left/down/corner (works just like a tape recorder or CD player)
To PAUSE: Click or "click and hold" the pause icon and drag it to where You want it to be on the horisontal axis (X-axis / Year)
Select specific YEAR: Place cursor anywhere on the RUN-slide and left-click with Your mouse
To PIN POINT country: Place cursor on bubble. At same time You see to which REGION the country belongs (the group is bolded / highlighted in right/upper window, scrollbar)
... or Select COUNTRY: Place cursor at (or mark selected countries in) checkbox window right/lower (valitse / select). At same time You see to which REGION the country belongs (the group is bolded / highlighted in right/upper window, scrollbar)
To see countries in SPECIFIC region or at developmental stage: Place cursor on SPECIFIC region in scrollbar (right / upper), the specified countries belonging to the region will blink in the graph window.

Using coloring options

Select COLORING OF BUBBLES: Select from scrollbar right/upper (vari / color) to set color by country (yksilolliset varit / unique colors), region or developmental stage
Use variable as HEATMAP for variable: Select variable from right/upper scrollbar (vari / color). Bubbles will be heathed by the variable of Your choice.

Bubble size

Select BUBBLE SIZE: Select variable determining bubble size from right/middle scrollbar (koko / size). To cancel bubble size effect, select NO SIZE

Country selection and tracking year-to-year changes

Select COUNTRY: Mark selected countries in checkbox window right/lower (valitse / select)
Set trackin ON/OFF: Check right/down checkbox (reitti / tracking)
To RESET SELECTIONS / UNSELECT: Click "poista kaikki valinnat" / "reset" just above checkbox window right/lower (valitse / select)

Select variables

Select horisontal (X-axis) variable: Open horisontal scrollbar by clicking arrow in text window (or window itself) and select Your variable for horisontal axis (X-axis)
Select vertical (Y-axis) variable: Open vertical scrollbar by clicking arrow in text window and select variable for vertical axis (Y-axis)
Change linear/logaritmic scaling of variables: Click on lin (or loki / log) and toggle to loki (log)

Analysing single variables time series and ranking / sorting by variable

You can select to study time series of single variables (variable in vertical Y-axis): Select the line graph icon (tag up/right/right in graph window)
You can also easily rank / sort (countries) by a specified variable (active variable in vertical Y-axis): Select the bar chart icon (tag up/right/middle in graph window) and select year for which You want to rank / sort countries by dragging the PAUSE icon to desired year (horisontally)

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