Global Innovation Index 2023: Switzerland, Sweden and the U.S. lead the Global Innovation Ranking; Innovation Robust but Startup Funding Increasingly Uncertain
Switzerland, Sweden, the United States, the United Kingdom and Singapore are the world’s most innovative economies in 2023, according to WIPO’s Global Innovation Index (GII), as a group of middle-income economies have emerged over the past decade as the fastest climbers of the ranking.
The GII 2023 uses 80 indicators to track global innovation trends in 130-plus economies, guiding policy makers and business leaders in stimulating human ingenuity. This year, the report’s findings are unveiled against a background of slow economic recovery from the COVID-19 pandemic, high interest rates and geopolitical conflict.
The 2023 edition identifies an increasingly uncertain outlook for the venture capital (VC) that helps transform human ingenuity into new products and services, with the global value of VC funding marking a significant plunge last year.
In the annual ranking, China – the only middle-income economy in the GII top 30 – ranks 12thfollowed by Japan in the 13th position. Israel (14th) is back among the GII top 15, gaining two steps. Finland (6th) is on an upward trend along with Denmark (9th), Sweden (2nd) and the Baltic economies (Estonia 16th, Lithuania 34th and Latvia 37th).
In the past 10 years, Indonesia (61st) joins China, Türkiye (39th), India (40th), Viet Nam (46th), the Philippines (56th), and the Islamic Republic of Iran (62nd) in the group of middle-income economies to have climbed the GII rankings fastest. In the last four years, and since the pandemic started, Mauritius (57th), Indonesia, Saudi Arabia, Brazil and Pakistan have risen the most in rank (in order of rank progression).
A total of 21 economies outperformed on innovation as expected relative to their level of development, the majority located in Sub-Saharan Africa and South East Asia, East Asia, and Oceania. India, the Republic of Moldova and Viet Nam are each innovation overperformers for 13 years in a row. Indonesia, Pakistan and Uzbekistan maintain their overperformer status for a second year and Brazil for a third consecutive year.
A group of emerging economies are consistently climbing the GII ranks, showing how a focus on the innovation ecosystem can make a difference. Globally, despite a downturn in venture capital funding, the GII 2023 should reassure us that innovative activity currently continues to run strong but that innovative activity should continue to shift from quantity to quality.
With the GII, policymakers across the world continue to have a rich and trusted source of data and information to craft pro-innovation policies to unleash the innovative potential of their people.
A special excerpt from the GII shows that the world’s five biggest science and technology (S&T) clusters are now located in East Asia, with China emerging as the country with the greatest number of clusters as Tokyo-Yokohama leads as the biggest S&T cluster.
Among the GII’s key findings:
- Scientific publications, research and development (R&D), the number of venture capital (VC) deals (but not their value) and patents continued to increase to higher than ever levels. However, growth rates were lower than the exceptional increases seen in 2021.
- In 2022, spending by corporations representing the largest investors in R&D reached USD 1.1 trillion in 2022 – a historic high. They increased their R&D spend by around 7.4 percent in 2022, down from 15 percent growth in 2021.
- Mirroring the recent surge of artificial intelligence, the ICT hardware sectors saw graphic card and chipmakers in the lead with the most notable R&D growth in 2022. Other sectors which cut back R&D spending during the pandemic, such as automobiles and travel and leisure, invested strongly again in 2022.
- According to preliminary data, global government R&D budgets are estimated to have increased in real terms in 2022. Significant increases took place in Japan and the Republic of Korea, and smaller ones in Germany, making up for cuts in other economies.
- Reflecting a deteriorating climate for risk finance, the total value of VC investments declined sharply by close to 40 percent in 2022, albeit from unusually high levels in 2021. Africa was the only region not to see a decline in 2022.
- The VC outlook for 2023 and 2024 is uncertain, with high interest rates likely to continue to impact the financing of innovation.
- Indicators in the fields of information technology, health and energy continue to show progress – the Digital Age and Deep Science innovation waves outlined in GII 2022 are well underway.
- Overall, technology adoption is developing positively even though penetration for some technologies, such as electric vehicles and cancer treatment, remains low.
- Switzerland (Number 1 in 2022)
- Sweden (3)
- United States of America (2)
- United Kingdom (4)
- Singapore (7)
- Finland (9)
- Netherlands (5)
- Germany (8)
- Denmark (10)
- Republic of Korea (6)
- France (12)
- China (11)
- Japan (13)
- Israel (16)
- Canada (15)
- Estonia (18)
- Hong Kong, China (14)
- Austria (17)
- Norway (22)
- Iceland (20)
GII Co-Editors on Innovation
- “We are witnessing exponential progress in digital technologies and many fields of deep science. This is providing a boost to innovation across sectors and holds the hope of providing solutions to some of our world’s complex problems in climate, food, health and related challenges.”— GII Co-editor and Dean of the Saïd Business School at Oxford University Soumitra Dutta
- “While many governments still struggle with the massive amounts of public debt accumulated during COVID, the business sector has continued to increase its levels of innovation. However, this trend may hide growing disparities, as some sectors have attracted significant funding (typically artificial intelligence) while gaps have started to appear in the financing chain, especially venture capital for small and new businesses. Against the background of growing trade tensions and lower levels of international cooperation, such trends could hamper the ability of innovative firms to fully contribute to the resumption of sustainable growth.”— INSEAD Distinguished Fellow and GII Co-Editor Bruno Lanvin
Global leaders in innovation in 2023 – Regional Breakdown
The United States (3rd) scores the best in the world in 13 of the 80 GII 2023 innovation indicators. It holds the number one spot globally in various critical indicators, including global corporate R&D investors, VC received, university quality, combined valuation of unicorn companies and the value of corporate intangible asset intensity.
Canada (15th) remains firmly positioned among the top 15 global innovators. The country leads in indicators including VC recipients (at first place), impact of its scientific publications (H-Index, 4) and software spending (5).
Europe hosts the greatest number of innovation leaders among the top 25 – 16 in total, one more than in 2022. Out of 39 European economies covered, 19 move up the rankings this year (seven more than last year), namely Sweden (2nd), Finland (6th), Denmark (9th), France (11th), Estonia (16th), Norway (19th), Ireland (22nd), Belgium (23rd), Italy (26th), Portugal (30th), Lithuania (34th), Latvia(37th), Greece (42nd), Slovakia (45th), Romania (47th), Serbia (53rd), North Macedonia (54th), Ukraine(55th) and Albania (83rd).
Among economies improving their performance, France excels in intangible assets (at third place), global brands (4), industrial designs (8) and global corporate R&D investors (9). Belgium performs well in R&D expenditure (6), researchers (8) and university-industry R&D collaboration (9).
Serbia approaches the top 50 with a strong performance in foreign direct investment (FDI) inflows (11) and labor productivity growth (14).
South East Asia, East Asia, and Oceania
Six South East Asia, East Asia and Oceania (SEAO) economies are world innovation leaders, namely Singapore (5th), the Republic of Korea (10th), China (12th), Japan (13th), Hong Kong, China (17th) and Australia (24th).
Eight economies within the SEAO region improve their rankings this year, with Indonesia (61st, up from 75th) making the greatest advance. Indonesia excels in ICT-related indicators and ranks among the top 10 globally for university-industry R&D collaboration (5), state of cluster development (5), entrepreneurship policies and culture (5) and finance for startups and scaleups (8). Indonesia has made marked improvements in innovation outputs, notably in knowledge creation and online creativity.
Mongolia (68th), Brunei Darussalam (87th) and the Lao People’s Democratic Republic (110th) also move up the rankings.
Central and Southern Asia
In Central and Southern Asia, India (40th) is the best-ranked innovation economy in this region. The Islamic Republic of Iran (62nd), Kazakhstan (81st, and a newcomer in the regional top three), and Uzbekistan (82nd) get close to the top 80.
India maintains its 40th position overall and takes the helm in the lower middle-income group. It holds the record for overperforming on innovation for the 13th consecutive year. India holds top rankings in key indicators including ICT services exports (at place 5), VC received (6), graduates in science and engineering (11) and global corporate R&D investors (13).
The Islamic Republic of Iran secures the 2nd position within the region. It claims the top spot globally in trademarks (at first place), performs well in intangible assets (13), and is in the top 15 worldwide in graduates in science and engineering (3), market capitalization (5) and industrial designs (11).
Kazakhstan emerges as a newcomer in the regional top three and is one of only two economies that go up the rankings in the region, together with Nepal (108th). Pakistan and Uzbekistan overperform on innovation for the second consecutive year, while Pakistan also positions itself among the economies that have shown the most significant ascent in the GII over the past four years.
Northern Africa and Western Asia
Israel (14th), Cyprus (28th), the United Arab Emirates (32nd) and Türkiye lead in the innovation rankings for this region.
Israel gained two ranks. It leads the world in nine innovation indicators, including R&D expenditure, university-industry R&D collaboration, the cumulative value of its unicorn companies, WIPO Patent Cooperation Treaty (PCT) patent applications and ICT services exports.
The United Arab Emirates stabilizes close to the top 30 and ranks in the top five for its entrepreneurship policies and culture, policies for doing business, the number of researchers in businesses, and R&D financed by the private sector. Türkiye remains firmly placed among the group of middle-income economies within the GII top 65, and has climbed fastest in the ranks over the last decade. It ranks in the top five for its industry diversification, and excels notably in intangible assets, industrial designs and trademark filings.
Joining the top 50 ranks are Saudi Arabia (48th) and Qatar (50th). Saudi Arabia performs well in ICT access (7), ICT use (10) and policies for doing business (16). Additionally, it excels in global corporate R&D investors (16) and global brand value (18).
The economies of Bahrain (67th), Oman (69th), Jordan (71st) and Egypt (86th) also experience significant improvements in their innovation rankings. Bahrain and Oman both enter the top 70, while Oman secures a spot among the top 10 worldwide in graduates in science and engineering (2) and government funding per pupil (9).
Georgia (65th) and Armenia (72nd) also make notable improvements.
Latin America and the Caribbean
In Latin America and the Caribbean, Brazil breaks into the top 50 economies in 2023. Following a steady ascent in recent years, it surpasses Chile (52nd) for the first time, securing its position as the most innovative economy in the region. Mexico (58th) follows, holding the third regional position.
Brazil climbs up five ranks this year, firmly establishing itself among the group of economies that have shown the most remarkable improvement in the GII over the past four years. Brazil excels in indicators including government’s online service (at place 14) and e-participation (11), both in the top 15 worldwide; the valuation of its 16 unicorn companies (22), representing 1.9 percent of its GDP in 2023; and intangible assets (31), ranking well worldwide for its trademarks (13), and its global brands value (39).
Jamaica (78th) also overperforms on innovation for its level of development.
In addition to Brazil, Uruguay (63rd) and El Salvador (95th) are the only other countries in the region that have improved their positions this year. Uruguay takes the lead in the top 10 for policies for doing business (4), ICT services imports (5), exports (7), and operational stability for businesses (10). El Salvador stands out with notable rankings in firms offering formal training (15) and trademarks (20).
In Sub-Saharan Africa, Mauritius (57th) leads the region, followed by South Africa (59th) making a stride by entering the top 60. Botswana (85th), Cabo Verde (91st) and Senegal (93rd) follow. Nine economies in the region improve their innovation rankings. South Africa, Senegal, Rwanda (103rd, and leading the low-income group), Nigeria (109th), Togo (114th) and Mauritania (127th) are among the economies that have shown notable progress.
Mauritius leads worldwide in amount of relative VC invested (at place 1) and secures a spot among the top five in VC received (5). South Africa leads the region in knowledge and technology outputs, thanks to its good performance in software spending (28), patents by origin (34), PCT patent applications (40) and valuation of its unicorn companies (37). Botswana leads in business sophistication and performs well in loans from microfinance institutions (12).
Senegal takes the lead for the valuation of its unicorns and it performs well in gross capital formation (8), loans from microfinance institutions (10), FDI inflows (13) and VC received (19).
Rwanda, Madagascar (107th), South Africa, Senegal and Burundi (130th) stand out for overperforming on innovation relative to their level of economic development, with Rwanda excelling for 11 years.
About the Global Innovation Index
The Global Innovation Index 2023 (GII), in its 16th edition this year, is published by WIPO in partnership with the Portulans Institute, which is supported by its Corporate and Academic Network partners. The GII Advisory Board provides important guidance.
Since its inception in 2007, the GII has shaped the innovation measurement agenda and become a cornerstone of economic policymaking, with an increasing number of governments systematically analyzing their annual GII results and designing policy responses to improve their performance.
Published annually, the core of the GII provides performance measures and ranks some 130-plus economies on their innovation ecosystems. The Index is built on a rich dataset – the collection of 80 indicators from international public and private sources – going beyond the traditional measures of innovation since the definition of innovation has broadened.
The GII 2023 is calculated as the average of two sub-indices. The Innovation Input Sub-Index gauges elements of the economy that enable and facilitate innovative activities and is grouped into five pillars: (1) Institutions, (2) Human capital and research, (3) Infrastructure, (4) Market sophistication, and (5) Business sophistication (see Framework). The Innovation Output Sub-Index captures the actual result of innovative activities within the economy and is divided in two pillars: (6) Knowledge and technology outputs and (7) Creative outputs.
For each economy, an innovation brief is available, in which that economy’s performance on all indicators is recorded. The briefs – now available in an interactive fashion online as well – highlights an economy’s relative innovation strengths and weaknesses.
The index is submitted to an independent statistical audit by the Competence Centre on Composite Indicators and Scoreboards (COIN) from the European Commission’s Joint Research Centre.
The World Intellectual Property Organization (WIPO) is the global forum for intellectual property policy, services, information and cooperation. A specialized agency of the United Nations, WIPO assists its 193 member states in developing a balanced international IP legal framework to meet society’s evolving needs. It provides business services for obtaining IP rights in multiple countries and resolving disputes. It delivers capacity-building programs to help developing countries benefit from using IP. And it provides free access to unique knowledge banks of IP information.
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