Switzerland remains the world’s leader in innovation

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03.09.2020
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With Switzerland on the top, South Korea has taken over the tenth position in the annual Global Innovation Index ranking. Together with Singapore, it has become the second Asian economy joining the top 10 innovative economies for the first time. Considering the current situation, the GII 2020 delves into the question: Who will fund innovation?

The 13th edition of the Global Innovation Index (GII) 2020) was co-published by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO). The study is a detailed quantitative and benchmarking tool that helps global decision-makers better understand how to stimulate the innovative activity that drives economic and human development. The GII 2020 ranks 131 economies based on 80 indicators, ranging from intellectual property filing rates to mobile-application creation, education spending and scientific and technical publications. The GII 2020 is calculated as the average of two sub-indices; the Innovation Input Sub-Index focusing on elements of the national economy and the Innovation Output Sub-Index, which captures actual evidence of innovation results.

In its associated annual ranking of the world’s economies on innovation capacity and output, the GII shows year-on-year stability at the top but a gradual eastward shift in the locus of innovation as a group of Asian economies – notably China, India, the Philippines and Viet Nam – have advanced considerably in the innovation ranking over the years.

Switzerland stays at the top
Switzerland remains on the most innovative country worldwide for the 10th consecutive year for it has been a consistent producer of high-quality innovation outcomes, and it has improved in patents and venture capital deals. A solid human capital and research system, coupled with a sophisticated market with innovative firms, put Sweden in the second spot for the second consecutive year. The U.K and the Netherlands remained in the top 5. Moreover, for the first time a second Asian economy - the Republic of Korea – has joined the top 10 (Singapore is number 8).

A shifting innovation landscape
The geography of innovation continues to shift, the GII 2020 shows. Over the years, India, China, the Philippines, and Viet Nam are the economies with the most significant progress in their GII innovation ranking over time. All four are now in the top 50. Nonetheless, the top-performing economies in the GII are still almost exclusively from the high-income group, with China (14th) remaining the only middle-income economy in the GII top 30. Malaysia (33rd) follows. India (48th) and the Philippines (50th) make it to the top 50 for the first time. The Philippines achieves its best rank ever—in 2014, it ranked 100th. Heading the lower-middle-income group, Viet Nam ranks 42nd for the second consecutive year— from 71st in 2014. Indonesia (85th) joins the top 10 of this group. Tanzania tops the low-income group (88th).

The top 20 countries are:

  1. Switzerland (Number 1 in 2019)
  2. Sweden (2)
  3. United States of America (3)
  4. United Kingdom (5)
  5. Netherlands (4)
  6. Denmark (7)
  7. Finland (6)
  8. Singapore (8)
  9. Germany (9)
  10. Republic of Korea (11)
  11. Hong Kong (China) (13)
  12. France (16)
  13. Israel (10)
  14. China (14)
  15. Ireland (12)
  16. Japan (15)
  17. Canada (17)
  18. Luxembourg (18)
  19. Austria (21)
  20. Norway (19)

After the pandemic, who will fund innovation?
The COVID-19 crisis hit the innovation landscape at a time when innovation was flourishing. In 2018, research and development (R&D) spending grew by 5.2%, i.e., significantly faster than global gross domestic product (GDP) growth, after rebounding strongly from the financial crisis of 2008-2009. Venture capital (VC) and the use of intellectual property (IP) were at an all-time high.

In the context of the GII 2020 theme Who Will Finance Innovation?, one of the GII findings is that the money to fund innovative ventures is drying up. VC deals are in sharp decline across North America, Asia, and Europe. The impact of this shortage in innovation finance will be uneven, with the negative effects felt more heavily by early-stage VCs, by R&D-intensive start-ups, and in countries that are not typically VC hotspots.

Despite the adverse effects the pandemic is having on global economies, the crisis has already catalysed innovation in many new and traditional sectors, such as health, education, tourism and retail.

(Press release / RAN)

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