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). 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.
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," said WIPO Director General Francis Gurry. "It heralds the arrival of multipolar innovation".
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, " said 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."
New findings and updates for the GII
Among other notable GII inclusions this year :
- An updated survey of "top science and technology clusters" around the world, adding scientific publishing to international patent applications to highlight areas of particularly intensive innovative activity. The areas around Tokyo-Yokohama and Shenzhen-Hong Kong lead the list, while the U.S. boasts the greatest number of hotspots with 26;
- A new "IPC Green Inventory" that shows a worrying waning growth rate in environmentally friendly energy-related patenting, with green patent publishing rates peaking in 2012;
- An expanded look at economies that innovate efficiently - translating investments in education, research and R&D expenditures into high-quality innovation outputs. Leaders are Switzerland, Luxembourg, China, the Netherlands, Ukraine, the Republic of Moldova, Malta, Hungary, Germany, and Sweden;
- A new indicator, mobile-application "app" creation, with Cyprus, Finland and Lithuania as the global leaders in the development of mobile apps relative to GDP.
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." said 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. 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," said Barry Jaruzelski, Principal at Strategy&, PwC's strategy consulting business, which is one of the GII Knowledge Partners.
