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Tuesday 20th March 2018

Laggards and Leaders: Who are the World’s Most Innovative Countries?

Business

Ben Mueller - 7Dnews London

Tue, 17 Sep 2019 08:46 GMT

This year’s Global Innovation Index offers some surprising and other less surprising insights into the global innovation landscape. While most of the top science and technology clusters remain concentrated in a few countries, a small number of others have been catching up, helping to maintain a stable growth rate in investment in innovation despite a global economic slowdown. 

For several years now, INSEAD, Cornell University and the World Intellectual Property Organisation have compiled an annual Global Innovation Index (GII), which ranks and breaks down the innovation performance of 129 countries in the world. This year’s GII shows once again that, with the notable exception of China, beyond the world’s high-income countries, the world map remains fairly empty when it comes to hosting centres of innovation. 

With respectively 26, 18 and 10 science and technology clusters, the US, China and Germany lead the field in hosting, followed by France, the UK and Canada. At the same time, the top four clusters are all located in Asia with the Tokyo-Yokohama cluster coming in at the top, followed by the clusters in the Shenzhen-Hong Kong cross-border region, Seoul and Beijing.  

Greater Investment in Innovation Despite Economic Slowdown 

One of the 2019 GII’s more surprising findings is that overall investment in innovation has been increasing in recent years despite the worldwide economic slowdown. Globally, research and development (R&D) expenditure has outpaced the global economy while intellectual property registrations reached record highs in both 2017 and 2018. 

Jean Langlois, a lecturer in innovation and economics at the French Sciences Po, told 7Dnews that the “continuing acceleration of innovation is to some extent due to the cumulative nature of technological change.” In other words, one particular technology or scientific discovery can spawn the development of a host of other technologies. Langlois furthermore argued that Moore’s Law, named after the legendary Intel co-founder, still applies, as “we continue to witness exponential growth in the processing power of microchips, which has been key for cost reductions and capacity increases in the digital domain.”  

Concentration of Innovation Clusters 

In terms of the geography of innovation, most technological change has historically occurred in clusters, although the reasons behind this phenomenon are still not fully understood, according to Langlois. A common explanation is that clustering facilitates cooperation among firms, allowing them to detect new technological possibilities more rapidly. Another explanation is that clusters improve firms’ access to knowledge and information. 

The GII 2019 report provides further evidence for this clustering phenomenon and, moreover, observes that “innovation inputs and outputs are still highly concentrated.” The majority of clusters are located in high-income economies in Europe and North America. The African continent, on the other hand, does not have a single top-ranked cluster. 

The report nonetheless finds a shift in activity from high-income to middle-income economies; yet this shift can mainly be attributed to China and to a lesser extent to India, Brazil and Russia. In general, middle-income countries have been facing “an impermeable innovation glass ceiling,” according to the report’s authors. India is a particularly troubling example in this respect because it has a tremendous amount of what the report classifies as innovation “noise” that only in rare instances has matured to coherent innovation clusters.  

Varying Returns on Investment in Innovation

The GII also uncovers vast disparities between countries’ ability to generate a return from their investments in innovation. In this respect, Switzerland has led the rankings for the ninth consecutive year, followed by Sweden, the US and the Netherlands who have all generated much greater innovation outputs compared to their levels of input. 

Low performers in this metric among high-income countries are Singapore, the UAE, Brunei Darussalam, and Trinidad and Tobago which reaped much less from their investments in innovation. This means, for example, that the Czech Republic, a middle-income country, generates the same level of innovation output as Singapore despite much lower levels of input. 

Medical Technology now Most Patented Field 

Medical technology is now the most frequent patenting field, dethroning pharmaceuticals. The report’s authors consider this an important development because health innovation might help “overcome the innovation productivity decline of the pharmaceutical industry in the past decades.” Another promising development is the convergence of digital and biological technologies with innovation now evolving around “big data, the internet of things and artificial intelligence.” This, in turn, results in “huge power shifts within and away from the health sector.”

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