Top rankings: Switzerland, Netherlands, Sweden, UK, Singapore and US
China broke into the world’s top 20 most-innovative economies as Switzerland retained its number-one spot in the Global Innovation Index (GII) ranking published annually by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO) and GII Knowledge Partners. *
Rounding out the GII 2018 top ten: The Netherlands, Sweden, the United Kingdom, Singapore, United States of America, Finland, Denmark, Germany and Ireland.
Now in its 11th edition, the GII is a detailed quantitative tool that helps global decision makers better understand how to stimulate the innovative activity that drives economic and human development. The GII ranks 126 economies based on 80 indicators, ranging from intellectual property filing rates to mobile-application creation, education spending and scientific and technical publications. (See Table #1)
China’s number 17 ranking this year represents a breakthrough for an economy witnessing rapid transformation guided by government policy prioritizing research and development-intensive ingenuity.
While the United States fell back to number six in the GII 2018, it is an innovation powerhouse that has produced many of the world’s leading hi-tech firms and life-changing innovations.
“China’s rapid rise reflects a strategic direction set from the top leadership to developing world-class capacity in innovation and to moving the structural basis of the economy to more knowledge-intensive industries that rely on innovation to maintain competitive advantage,” says WIPO Director General Francis Gurry. “It heralds the arrival of multipolar innovation.”
2018 Global Innovation Rankings:
Innovation Achievers Growing
A group of middle and lower-income economies perform significantly better on innovation than their level of development would predict. Twenty economies comprise these ‘innovation achievers’ in 2018, three more than in 2017. The sub-Saharan Africa region boasts six innovation achievers, including Kenya, Rwanda and South Africa, while five economies hail from Eastern Europe.
Indonesia, Malaysia, Thailand, and Viet Nam continue to move up the rankings, steering closer to regional powerhouses like China, Japan, Singapore, and Republic of Korea.
“Over time, a number of emerging economies stand out for being real movers and shakers in the innovation landscape,” says Soumitra Dutta, Former Dean and Professor of Management at Cornell University. “Aside from China, which is already in the top 25, the middle-income economy closest to this top group is Malaysia. Other interesting cases are India, Iran, Mexico, Thailand and Viet Nam which consistently climb in the rankings.”
GII 2018 Theme: “Energizing the World with Innovation”
The theme of the 2018 GII edition is “Energizing the World with Innovation,” looking at the need for expanded innovative work in climate-friendly green technology amid rising energy demands worldwide.
Projections indicate that by 2040 the world will require up to 30% more energy than it needs today and conventional approaches to expanding the energy supply are unsustainable in the face of climate change.
“Innovation is clearly necessary to address the energy/environment equation, but let us keep in mind that such innovation cannot be only technological. New social, economic and business models are required, including through efforts to promote smart cities, mobility solutions based on shared vehicles – and a global citizenry with better information on the impacts of various energy policies.” says Bruno Lanvin, INSEAD Executive Director for Global Indices.
“Ultimately, we must ensure that the solutions to our energy challenges are suited to local needs, do not entail additional disruptions, and reduce inequalities.”
Among GII findings on the state of clean-energy innovation: New technological advancements are needed across the entire energy value chain and public policy will play a central role in guiding the transition to cleaner energy.
“For the energy sector, innovation is critical to companies’ strategy,” says Barry Jaruzelski, Principal at Strategy&, PwC’s strategy consulting business, which is one of the GII Knowledge Partners. “Energy executives are well aware of the shifting ground they face, how well companies innovate using new types of energy and distribution technologies will determine their ability to survive the transformation. This market will be evolving for decades to come. As our research shows, as renewables become more viable, the power industry has the potential of being a bonanza for innovation.”
Northern America holds two of the top 20 economies in this year’s GII.
The U.S. ranks 6th overall this year, down two spots from 2017 – a change that is partly related to model changes. In absolute terms, the U.S. remains the top contributor in key innovation inputs and outputs, including in investment in research and development, and it comes second after China in the volume of researchers, patents and scientific and technical publications. For the third year in a row, the U.S. outpaces the United Kingdom in the quality of its universities, with top scores for Massachusetts Institute of Technology (MIT), Stanford, and Harvard University.
Canada keeps the 18th position overall, with advantages in ease of starting a business and venture capital deals.
Eleven of the top 20 innovating economies come from Europe, including the top three: Switzerland (1st), the Netherlands (2nd), and Sweden (3rd).
Switzerland earns the top position in the GII for the eighth consecutive year. It ranked first in various patent and IP-related indicators, as well as second in high- and medium-high-tech manufacturing production. It is among global leaders in R&D spending and quality of local universities.
The Netherlands gets the second best innovation ranking globally. It has a strong, interlinked business sector that collaborates well with universities. Its business sector is internationalized via IP licensing exports.
Sweden is the third best ranking worldwide. It maintains its 1st position for patent applications by origin filed via WIPO’s Patent Cooperation Treaty (PCT). It boosts its performance in online creativity.
South East Asia, East Asia, and Oceania
This year all economies in the South East Asia, East Asia, and Oceania region are ranked within the top 100 in the GII. In this region, Singapore (5), Republic of Korea (12) and Japan (13) are the highest ranked.
Singapore keeps its first place in the following indicators: government effectiveness, regulatory quality and foreign direct investment outflows. Singapore is top performer as well in political stability and safety, market capitalization, foreign direct investment inflows, high- and medium-high tech manufacturing and high-tech net exports.
Japan ranks 1st in a number of indicators: gross domestic expenditure on R&D financed by business, patent families in two or more offices, and intellectual property receipts.
Republic of Korea maintains its top rankings in patents applications by origin and various indicators measuring R&D efforts (gross domestic expenditure on R&D, R&D financed and performed by business, and research talent in business enterprise). It also keeps its 1st spot in industrial designs by origin and high-tech net exports. It is also ranks 8th in mobile app creation, the newly introduced indicator.
Central and Southern Asia
India maintains its top place in the Central and Southern Asia region, moving up three spots-from 60th in the GII 2017 to 57th this year. The Islamic Republic of Iran remains second in the region. Kazakhstan is third.
Among lower-middle-income economies, India moves up to the 5th position in the GII rankings. It has also outperformed on innovation relative to its GDP per capita for eight years in a row. India ranks well in a number of important indicators: productivity growth, exports of information and communication technology and services.
“Given its size and innovation development, India has the potential to make a true difference to the global innovation landscape in the years to come. The Indian Government and CII are working closely with the GII team to further improve the Indian innovation performance,” says Chandrajit Banerjee, Director General, Confederation of Indian Industry, another GII Knowledge Partner.
The Islamic Republic of Iran earns top ranks this year in these indicators: productivity growth and graduates in science and engineering. Other areas of comparative strength include capital investments, patents, scientific and technical publications, trademarks and technical manufacturing.
Kazakhstan retains its 3rd spot in the region this year and shows a relatively strong performance in these indicators: the ratio of pupils-to-teachers, gross capital formation and foreign direct investment inflows.
Northern Africa and Western Asia
Israel (11) and Cyprus (29) achieve the top two spots in the region for the sixth consecutive year. The United Arab Emirates is 3rd.
Israel leads in these indicators: number of researchers, R&D expenditures, venture capital deals, R&D funded by business enterprises, research talent in business enterprise, exports of information and communications technology services and Wikipedia edits.
Cyprus is strong in credit access, knowledge diffusion, and online creativity. Other areas of strength: foreign direct investment inflows and outflows, information and technology service imports and exports. Cyprus is the world leader in mobile application creation.
United Arab Emirates has top performance in the number of incoming tertiary students, cluster development, R&D financed by business, research talent, as well as in education, general infrastructure and innovation linkages.
Latin America and the Caribbean
Chile ranks 47th in the GII this year, the top spot for the region with strengths in regulatory quality, enrolment in tertiary education, access to credit, firms offering formal training, new business creation and foreign direct investment inflows and outflows.
Costa Rica ranks 2nd in the region. It stands out in expenditure on education, access to credit, output per worker, intellectual property payment, information and communications service exports and printing and other media as a percentage of all manufacturing.
Mexico, 3rd in the region, shows top 10 rankings in ease of getting credit, technical manufacturing, both technical net imports and exports and creative goods exports.
Brazil, the region’s largest economy, is ranked 64 in this year’s GII, up five positions. Areas of comparative strengths: R&D expenditures, high-tech net imports and exports, quality of scientific publications and universities, especially the University of São Paulo, the University of Campinas and the Federal University of Rio de Janeiro.
“The Global Innovation Index is very important to building and perfecting Brazil’s innovation policies, once it points out our improvements opportunities and also our strengths. It is also a vital instrument to the definition of new policies. With the new upcoming industrial revolution, innovation gains a new weight in the development and competitiveness of nations and Brazil should head towards that path,” says Robson Andrade, president of CNI.
“Small businesses are a fundamental economic and social force for the development of our country, and innovating is strategic in the search for more competitiveness in the Brazilian economy, ” says Heloisa Menezes, technical director in the exercise of the presidency of Sebrae. CNI and Sebrae are also GII Knowledge Partners.
South Africa takes the top spot among all economies in the region, followed by Mauritius and Kenya.
For several GII editions, a number of Sub-Saharan African economies perform relatively well on innovation when comparing performance to level of economic development.
South Africa takes the 58th position this year. It shows strengths in its sophisticated market and business sector. Other strong indicators: access to credit, market capitalization, university and industry research collaborations, cluster development and intellectual property payments.
South Africa is improving in the quality of its science papers and its universities, especially for the University of Cape Town, the University of Witwatersrand and Stellenbosch University.
Mauritius is 2nd in the region, with strong political, business and credit environments. Other particular strengths: political stability and safety, government funding of secondary students, efficiency of energy use and trade.
Kenya achieves high levels of innovation relative to its level of development, a continuous performance since 2011. Strengths for Kenya are access to credit (especially microfinance loans), innovation linkages and exports of creative services, such as R&D financed by abroad, workforce efficiency and printing and other media.
News source: World Intellectual Property Organization. The content is edited for length and style purposes.
Figure legend: This Knowridge.com image is credited to GII 2018.