SWITZERLAND IS ONCE AGAIN THE MOST INNOVATIVE COUNTRY IN THE WORLD Featured

01 October 2022

Switzerland, the United States, Sweden, the United Kingdom, and the Netherlands are the world’s most-innovative economies, according to WIPO’s 2022 Global Innovation Index (GII), with China on the threshold of the top 10. Other emerging economies are also showing consistently strong performance, including India and Türkiye, both of which enter the top 40 for the first time.

The report shows that research and development (R&D) and other investments that drive worldwide innovative activity continued to boom in 2021 despite the COVID-19 pandemic, but challenges are emerging in translating innovation investments into impact.

The GII finds that productivity growth - normally spurred by increased innovation - has in fact stagnated. It also finds that current technological progress and adoption show signs of slowing growth despite the recent flourishing of R&D expenditure and venture capital investments. However, with more careful and attentive nurturing of innovation ecosystems, a new era of innovation-driven growth led by the Digital Age and Deep Science innovation waves could take off.

"This year’s GII finds that innovation is at a crossroads as we emerge from the pandemic. While innovation investments surged in 2020 and 2021, the outlook for 2022 is clouded not just by global uncertainties but continued underperformance in innovation-driven productivity. This is why we need to pay more attention to not just investing in innovation, but how it translates into economic and social impact. Quality and value will become as critical to success as quantity and scale."

-WIPO Director General Daren Tang

Among the GII’s key findings

  • The top global corporate R&D spenders increased their R&D expenditure by almost 10 percent to over USD 900 billion in 2021, higher than in 2019 before the pandemic. This increase was primarily driven by four industries: ICT hardware and electrical equipment; Software and ICT services; pharmaceuticals and biotechnology; and construction and industrial metals.
  • Investments in global R&D in 2020 grew at a rate of 3.3 percent, but slowed from the historically high 6.1 percent R&D growth rate recorded in 2019. Government budget allocations for the top R&D spending economies showed strong growth in 2020. For 2021 government R&D budgets, the picture was more varied, with spending growing in the Republic of Korea and Germany, but falling in the US and Japan.
  • Venture capital (VC) deals exploded by 46 percent in 2021, recording levels comparable to the internet boom years of the late 1990s. Latin America and the Caribbean and Africa regions witnessing the strongest VC growth. The VC outlook for 2022 is more sober however; tightening monetary policies and the effect on risk capital will lead to a deceleration in VC.

In its annual ranking of the world’s economies on innovation capacity and output, the GII shows some key changes in the top 15 of the ranking, with the United States climbing to the 2nd position, the Netherlands reaching the 5th position, Singapore reaching 7th, Germany reaching 8th and China up one place to 11th and on the doorstep of the top 10.

Canada is back among the top 15 global innovators (15th). Türkiye (37th) and India (40th) enter the top 40 for the first time. Beyond these, Viet Nam (48), the Islamic Republic of Iran (53rd) and the Philippines (59th) are the middle-income economies with the fastest innovation performance growth to-date.

Global rankings

1. Switzerland (Number 1 in 2021)

11. China (12)

2. United States (3)

12. France (11)

3. Sweden (2)

13. Japan (13)

4. United Kingdom (4)

14. Hong Kong, China SAR (14)

5. Netherlands (6)

15. Canada (16)

6. Republic of Korea (5)

16. Israel (15)

7. Singapore (8)

17. Austria (18)

8. Germany (10)

18. Estonia (21)

9. Finland (7)

19. Luxembourg (23)

10. Denmark (9)

20. Iceland (17)

 

Several developing economies are performing above expectation on innovation relative to their level of economic development, including newcomers Indonesia, Uzbekistan and Pakistan. Eight innovation overperformers are from Sub-Saharan Africa, with Kenya, Rwanda and Mozambique in the lead. In Latin America and the Caribbean, Brazil, Peru and Jamaica are outperforming relative to development.

“With their rise in terms of innovation performance in the shadow of shocks to global supply chains, Türkiye and India are positively enriching the global innovation landscape, while Indonesia shows promising innovation potential, ” says GII Co-editor and Dean of the Saïd Business School at Oxford University, Soumitra Dutta. “Other regional champions like Chile and Brazil in Latin America, and South Africa and Botwana in Sub-Saharan Africa, have improved their relative innovation performance.”

gii-2022_leaders_en SWITZERLAND IS ONCE AGAIN THE MOST INNOVATIVE COUNTRY IN THE WORLD

 

Northern America

Northern America, composed of the United States and Canada. The United States climbs to the 2nd position, while Canada is back among the top 15 global innovators, moving up to 15th place.

The United States scores best in the world on 15 of the 81 GII 2022 innovation indicators, including global corporate R&D investors, venture capital investors, the quality of its universities, the quality and impact of its scientific publications, and the value of corporate Intangible asset intensity. Canada scores best in venture capital recipients, joint ventures and strategic alliance deals and computer software spending.

Europe

Europe –continues to host the largest number of innovation leaders – 15 in total – that rank among the top 25. Out of the 39 European economies covered, twelve move up the rankings this year: the Netherlands (5), Germany (8), Austria (17), Estonia (18), Luxembourg (19), Malta (21), Italy (28), Spain (29), Poland (38), Greece (44), the Republic of Moldova (56) and Bosnia and Herzegovina (70).

Switzerland remains the world’s leader in innovation for the 12th consecutive year. It leads globally in innovation outputs, and specifically in patents by origin, software spending, high-tech manufacturing and production and export complexity. Sweden (3) comes top in infrastructure and business sophistication worldwide, leading in indicators such as researchers, R&D expenditures and knowledge-intensive employment.

Germany reaches its highest ranking since 2009 after having entered the top 10 in 2016, leading globally on global corporate R&D investors. Estonia makes notable progress this year, breaching the top 20, and scoring a global leading performance for indicators venture capital deals, ICT services imports, new business creation and mobile app creation.

South East Asia, East Asia, and Oceania

Two South East Asia, East Asia, and Oceania (SEAO) region economies are among the top 10 global innovators - the Republic of Korea (6) and Singapore (7); and five others are in the top 25 - China (11), Japan (13), Hong Kong, China (14), New Zealand (24) and Australia (25). Singapore, China and New Zealand improved their rankings this year.

Within the region as a whole, Viet Nam (48), the Philippines (59), Indonesia (75), Cambodia (97) and the Lao People’s Democratic Republic (112) have made the greatest advances over the past decade. These economies lead in key innovation indicators, too. Viet Nam leads worldwide in high-tech imports, and the Philippines in high-tech exports.

Indonesia makes a leap this year, achieving its best position since 2012. It leads worldwide in entrepreneurship policies and culture, and has made notable improvements in Innovation linkages and in Intangible assets, performing well in indicators such as finance for startups and scale-ups, and corporate intangible asset intensity.

Central and Southern Asia

India (40) leads the region and reaches the top 40, after making it into the top 50 in 2020. The Islamic Republic of Iran (53) and Uzbekistan (82) follow.

India is the innovation leader in the lower middle-income group. It continues to lead the world in ICT services exports and holds top rankings in other indicators, including venture capital receipt value, finance for startups and scaleups, graduates in science and engineering, labor productivity growth and domestic industry diversification.

The Islamic Republic of Iran takes 3rd position among the lower middle-income group, and performs on innovation above expectations for its level of development for the second consecutive year. It leads worldwide in indicators such as trademark filings and graduates in science and engineering.

Uzbekistan climbs by 4 ranks; it overperforms on innovation relative to development for the first time in 2022.

Sri Lanka (85), Pakistan (87) and Bangladesh (102) jumped up the rankings this year. However, only Pakistan has steadily gained position over time.

Northern Africa and Western Asia

Israel (16), Cyprus (27), the United Arab Emirates (UAE) (31) lead this region on innovation.

Israel has been an innovation leader for the past 15 years. It leads the world in venture capital deals, females employed with advanced degrees, international patent applications filed by WIPO’s Patent Cooperation Treaty (PCT) per gross domestic product and ICT services exports as a proportion of total trade.

The UAE edges closer to the top 30, and continues to rank in the top 5 in the number of researchers in businesses and R&D financed by the private sector.

Türkiye (37) makes it to the top 40. It ranks 4th worldwide in intangible assets, showing notable strengths in industrial designs, trademark filings, and corporate intangible asset intensity.

An additional ten economies within the region move up the rankings, including notable improvers Saudi Arabia (51), Qatar (52), Kuwait (62), Morocco (67) and Bahrain (72).

Latin America and the Caribbean

Chile (50) - the only Latin American country in the top 50 – leads the Latin America and Caribbean region, followed by Brazil (54) – a newcomer to the top 3 for the region – and Mexico (58). Costa Rica (68) drop out of the regional top 3.

Chile ranks well in tertiary enrolment and new businesses. Brazil has made marked improvements in innovation outputs, notably in creative outputs such as intangible assets and online creativity, as well as in trademark filings and mobile app creation. Mexico leads in indicators such as creative goods exports, high-tech imports and exports.

Eight out of the 18 economies covered within the region rose in the rankings. Colombia (63), Peru (65), Argentina (69) and the Dominican Republic (90) all saw substantial rank increases this year. Peru is notable as it positions itself as a global leader this year in indicators such as availability of loans from microfinance institutions, graduates in science and engineering and utility models filings. Peru, Brazil and Jamaica (76) also performed on innovation above expectation for their level of development.

Continental Sub-Saharan Africa

South Africa (61) leads the region, followed by Botswana (86) and Kenya (88). Sixteen economies in the region moved up the GII rankings. Beyond Mauritius and Botswana, Ghana (95), Senegal (99), Zimbabwe (107), Ethiopia (117) and Angola (127) make noteworthy improvements.

South Africa tops in market capitalization, while Botswana performs well in indicators such as loans from microfinance institutions and intellectual property payments. Namibia (96) leads worldwide in expenditure on education and performs well above the regional average on human capital and research.

Sub-Saharan Africa is the region with the largest number of overperforming economies in innovation (8), with Kenya holding the record of outperformer for twelve consecutive years. Rwanda (105) and Mozambique (123) have consistently outperformed too.

Burundi (130) makes a return to the GII this year thanks to improved data availability, while Mauritania (129) joins the GII for the first time.

This article was originally published by: WIPO

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