For the first time in six years, South Korea has been knocked off the top spot as the world’s most innovative economy. With high scores in manufacturing value-added, high-tech density and patent activity metrics, Germany has been named the most innovative nation in this year’s Innovation Index.
In the annual index released by Bloomberg, the European country just about pipped the previous leader to the post. However, South Korea still stands at the forefront of exports of communications and cars, and 5G. Singapore places third in the overall ranking for its leading tertiary efficiency.
Now in its eighth year, the Innovation Index assesses more than 200 economies. Analysts narrowed down the list to 60, scoring nations from 0-100 across seven weighted metrics:
- R&D Intensity: Annual research and development spending, as a % of an economy’s GDP.
- Patent Activity: The number of annual patent and grant filings, and the three-year average growth, as a share of the world’s total patent growth.
- Tertiary Efficiency: The total enrollment in higher education, the share of labour force with advanced education levels, and the share of STEM graduates and in the labour force.
- Manufacturing Value-added: Manufacturing output levels contributing to exports as a % of GDP, and per capita.
- Productivity: GDP and GNI in the working-age population, and the three-year improvement.
- High-tech Density: The volume of domestic, high-tech public companies as a share of the world’s total companies.
- Researcher Concentration: Professionals (including postgraduate PhD students) engaged in R&D across the population.
Main movers and shakers
While the top 10 players have shuffled positions over the past five years, the most innovative economies have remained relatively consistent. The United States (which dropped to 9th overall) ranks first for both patent activity and high-tech density, with the “Big Five” tech giants all headquartered here.
Big movers include Slovenia, which gained 10 spots to No.21, and Chile, having made particular strides in tertiary education. Algeria (with a strong debut at No.49), Egypt, Kazakhstan and Macao entered the Innovation Index for the first time.
This year’s index also identified China as having the potential to upend the future leaderboard. The country’s steady rise (from 21st in 2017 to 15th today) could be due to its high scores in patent activity, from AI and blockchain to autonomous driving and regenerative medicine.
The innovation levels of a country can dictate its long-term success in changing times. The Innovation Index concluded that many countries are continuously striving to maintain their competitiveness within the global economy, while constant innovation can provide a better life for their population, both present and future.
Find the full Innovation Index here.