The development of humankind has always been spurred by changes in technology, and due to advancements of state-of-the-art technologies (like AI, Big Data, IoT, blockchain, 3D printing, gene editing, etc.), it is becoming more and more rapid. According to data presented at this year’s UNCTAD (United Nations Conference on Trade and Development), all of the frontier technologies at the moment present a market worth 350 billion dollars, with a potential to grow by 2025 to a staggering 3,2 trillion dollars.
In the past two years, due to the Covid 19 pandemic, and the need of firms around the globe to adjust to the changed working conditions, innovations in the field of digitalization have also accelerated. Many of the leading countries in the world saw an opportunity in the abrupt reduction of human activity. They all put additional effort into tackling some of the most important economic and societal issues, such as taking additional steps towards carbon neutrality.
The World Intellectual Property Organization, in collaboration with the Portland Institute and other corporate partners, annually measures innovation performance based on innovation inputs (R&D spending, infrastructure, and regulatory environment for example), innovation outputs (intellectual property, etc.), and creates the Global Innovation Index. They have done this since 2007 and this year they emphasized that the pandemic had a complex impact on innovation.
On one hand, financial resources haven’t diminished, and innovation had strong public support in the fields of health and medicine. Private funding remained dynamic, and startups, mostly in the fields of med-tech and teleworking tools, have benefited the most from that trend. Zoom is a prime example of this phenomenon. On the other hand, governments around the globe were also quick to inject a massive amount of money into the industries that were hit the most, as well as priority sectors.
Of course, since these developments are uneven around the world, some countries come out as global innovation leaders.
Let’s take a look at the top 10 most innovative countries according to the Global Innovation Index:
Switzerland was once again elected the number one innovative country in the world. This is the 11th time in a row they came out on top of the top 10 most innovative countries, and the reasons for that are many. Due to its relative lack of natural resources, Switzerland is for a long time focused on research and development. Over time it has invested in and funded a lot of world-renowned universities.
Those universities in turn attract multinational companies that seek highly qualified employees. One additional example is patent applications. With 966 patent applications per million inhabitants in 2020, Switzerland is ranked third worldwide and is well above the EU average of 146 applications per million inhabitants.
Sweden has a long history of innovation, and its startup scene has gained a lot of international attention in the last few years. There are several factors why it was placed second on the list.
Like most countries on the list, Sweden also emphasizes education. In 1842 the country introduced compulsory education for kids aged 7-13, and it was a game-changing move. It is a vital component in Sweden’s journey from a poor agricultural nation to an innovation leader.
This country is investing, as a rule, more than 3 percent of the country’s growth domestic product (GDP) in R&D (research and development). One other important thing is its infrastructure policies offering access to technology and the internet.
3. United States of America
From healthcare to finance, education, navigating space, from Hollywood to the Pentagon, ever since it was founded, the U.S.A. has been maximizing innovations. You don’t have to look far to find examples of American innovations. With its developed infrastructure, universities that are by far the best in the world, and policies that make it easier for entrepreneurs, small businesses, and startups to attract funding and investments, it stayed in the third spot of the Global Innovation Index for another year.
4. United Kingdom
The UK is internationally recognized for its leadership in research and its scientific institutions. While the UK’s expenditure on innovation has been lower than some of its competitors (France, U.S.A. Japan, and so on), the government has committed to boosting investment in R&D to 2.4% of GDP by 2027 and to increasing public funding for R&D to 22 billion pounds per year by 2024–25.
Also, between 2007 and 2019 the UK received venture capital investments of a total of 20.4 billion dollars, above other European nations. By the end of 2020, as it is stated in UK Innovation Report done by Cambridge, the United Kingdom had 25 unicorns (a startup valued at over $1billion), and its startup scene ecosystem is vibrant as ever.
5. Republic of Korea
There are several reasons for South Korea’s ranking. Above all, the index recognized Korea’s steady investment in the future in the face of difficult situations both inside and outside the country. It also pointed to the subsequent creation and proliferation of intangible assets.
Among the seven areas of assessment comprising five inputs and two outputs, Korea ranked first in human capital and research, which evaluates investment in the future. South Korea’s rank rose from 10th last year to 5th this year in the two output categories, which measure innovation-related activities and achievements including the rising number of intellectual property applications both in Korea and abroad even amid the pandemic.
Korea’s cultural and creative services exports marked the biggest jump last year.
6. The Netherlands
The Netherlands is one of the frontrunners in innovation in Europe. The Netherlands’ innovation culture has been long-standing, as they are the inventors of Wi-Fi, Bluetooth, and even the stock market.
The Dutch foster a forward-thinking culture that is open to experimentation and cross-disciplinary ideas. This open-minded attitude helps Dutch innovators break the mold time and again. The government also stimulates innovation, by providing a space for private and research sectors to cooperate. This nation is home to 13 unicorns, ranking fourth in Europe for financial investors to support new ideas.
Finland excels in technology and high-tech solutions, and Finnish innovations such as Linux and text messaging have shaped the world. What enables the innovation process in Finland is a great institutional framework, excellent human capital, and research capabilities, developed infrastructure, and exceptional market and business sophistication.
Singapore is succeeding in creating a conducive environment to attract innovative international start-ups to its shores. Meanwhile, companies in traditional industries in Singapore are adopting new technologies amid the digitalization trend. Singapore’s location at the crossroads of three of the world’s economic growth engines—China, India, and Southeast Asia, is one of the key factors for its placement on the list.
Over the past few decades, the country has established itself as a hub for innovation and research and development (R&D), offering companies around the world a robust platform to grow their businesses in the region and beyond.
Danish companies know that innovations and solutions are the best way to build wealth in a small country with few natural resources. Denmark’s educational system that brings up children to challenge authorities and to focus on team building and creative approaches is one of its greatest assets in creating innovative solutions. Denmark also has an exceptional tradition of public-private collaboration when it comes to research and development.
The speed at which Germany adopts new ideas, methods, and products put Germany in 10th place on the list of the world’s top 10 most innovative countries. In addition to its innovative capacities, Germany’s economic stability is outstandingly good and is a major factor in developing innovations.
Data from Eurostat shows that Germany already spends 3.17% of its GDP on research and innovation compared to the 2.19% EU average, making it a global leader in the field and one of the EU’s three countries that already meet the 3% target.
Spending on innovation in this country doubled from 2005 to 2019, from 9 billion euros to 18,8 billion.
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