Nine months into 2020, and things have shaped up to be much different from what the world has planned for - and with it, came a global economic shutdown. This, as a result, has had a huge impact on how economies innovate to keep up with the evolving times - making way for strong potentials in mitigating the effects of the COVID-19 crisis.
In line with that, the 13th edition of the Global Innovation Index has highlighted six key findings on how the times are looking - from what leaders need to act on, to which economies harbour strong potential, and more.
Before that, let's take a look at how the economies fared on the Index this year, with a focus on Asia's results.
Top 20 Asian economies on the Global Innovation Index 2020
#1 Singapore (Global ranking: 8)
#2 Republic of Korea (Global ranking: 10)
#3 Hong Kong (Global ranking: 11)
#4 China (Global ranking: 14)
#5 Japan (Global ranking: 16)
#6 Malaysia (Global ranking: 33)
#7 Vietnam (Global ranking: 42)
#8 Thailand (Global ranking: 44)
#9 India (Global ranking: 48)
#10 The Philippines (Global ranking: 50)
#11 Brunei Darussalam (Global ranking: 71)
#12 Indonesia (Global ranking: 85)
#13 Uzbekistan (Global ranking: 93)
#14 Kyrgyzstan (Global ranking: 94)
#15 Nepal (Global ranking: 95)
#16 Sri Lanka (Global ranking: 101)
#17 Pakistan (Global ranking: 107)
#18 Tajikistan (Global ranking: 109)
#19 Cambodia (Global ranking: 110)
#20 Bangladesh (Global ranking: 116)
Top 10 global economies, per income group
#1 Switzerland (Global ranking: 1)
#2 Sweden (Global ranking: 2)
#3 The US (Global ranking: 3)
#4 The UK (Global ranking: 4)
#5 Netherlands (Global ranking: 5)
#6 Denmark (Global ranking: 6)
#7 Finland (Global ranking: 7)
#8 Singapore (Global ranking: 8)
#9 Germany (Global ranking: 9)
#10 Republic of Korea (Global ranking: 10)
Upper middle-income economies
#1 China (Global ranking: 14)
#2 Malaysia (Global ranking: 33rd)
#3 Bulgaria (Global ranking: 37)
#4 Thailand (Global ranking: 44)
#5 Romania (Global ranking: 46)
#6 Russian Federation (Global ranking: 47)
#7 Montenegro (Global ranking: 49)
#8 Turkey (Global ranking: 51)
#9 Mauritius (Global ranking: 52)
#10 Serbia (Global ranking: 53)
Lower middle-income economies
#1 Vietnam (Global ranking: 42)
#2 Ukraine (Global ranking: 45)
#3 India (Global ranking: 48)
#4 The Philippines (Global ranking: 50)
#5 Mongolia (Global ranking: 58)
#6 Republic of Moldova (Global ranking: 59)
#7 Tunisia (Global ranking: 65)
#8 Morocco (Global ranking: 75)
#9 Indonesia (Global ranking: 85)
#10 Kenya (Global ranking: 86)
#1 United Republic of Tanzania (Global ranking: 88)
#2 Rwanda (Global ranking: 91)
#3 Nepal (Global ranking: 95)
#4 Tajikistan (Global ranking: 109)
#5 Malawi (Global ranking: 111)
#6 Uganda (Global ranking: 114)
#7 Madagascar (Global ranking: 115)
#8 Burkina Faso (Global ranking: 118)
#9 Mali (Global ranking: 123)
#10 Mozambique (Global ranking: 124)
Summary: Six key findings of the Global Innovation Index 2020
#1 The COVID-19 crisis will impact innovation - leaders need to act as they move from containment to recovery
Fundamentally, the pandemic has not changed the fact that the potential for breakthrough technologies and innovation continues to abound.
- Many top R&D firms in the information technology sector, for example, hold vast cash reserves, and the push to digitalisation will fortify innovation.
- The pharmaceuticals and biotechnology sector, another top R&D spender, is likely to experience R&D growth boosted by the renewed focus on health R&D.
- Other key sectors, such as transport, will have to adapt faster as the quest for "clean energy" is receiving renewed interest. Further, the COVID-19 crisis might well catalyse innovation in many traditional sectors, such as tourism, education, and retail. It may also spark innovation in how work is organised at the firm- and at the individual level, and how production is (re)organised locally and globally.
Unleashing the above potential is now essential and requires government support as well as collaborative models and continued private sector investment in innovation.
#2 Innovation finance declines in the current crisis, but there is hope too
In contrast to 2009, when the Global Financial Crisis occurred, the good news is that the financial system is sound so far. The bad news is that money to fund innovative ventures is drying up, the report noted. Venture Capital (VC) deals are in sharp decline across North America, Asia, and Europe. There are few initial public offerings (IPOs) in sight, and the start-ups that survive may grow less attractive to - and profitable for - venture capitalists, as exit strategies such as IPOs are compromised in 2020.
The key VC hot spots - Singapore, Israel, China, Hong Kong (China), Luxembourg, the US, India, and the UK - will continue to be magnets for VC. They are likely to bounce back quickly, in part due to the thirst for return on capital worldwide. Chinese VC deals, which halved earlier this year, are already rebounding strongly. Importantly, the direction of VC and innovation seems to have been redirected towards health, online education, big data, e-commerce, and robotics.
#3 The global innovation landscape is shifting; Vietnam, India, the Philippines and China are consistently on the rise
This year, the geography of innovation is continuing to shift, the report highlighted. Over the years, China, Vietnam, India, and the Philippines are the economies with the most significant progress in their GII innovation ranking over time. All four are now in the top 50.
The top-performing economies in the GII are still almost exclusively from the high-income group. China is the only exception, ranking 14th for the second time in a row and remaining the only middle-income economy in the GII top 30.
At the same time, Malaysia (33rd) has emerged the second-most innovative middle-income economy; while India (48th) and the Philippines (50th) have entered the top 50 for the first time.
In fact, the Philippines has achieved its best rank ever - in 2014, it still ranked 100th; Vietnam ranks 42nd for the second consecutive year - it ranked 71st in 2014. In the lower middle-income group, Indonesia (85th) joins the top 10.
#4 Stellar innovation performance found in developing economies
Some top spots on selected innovation indicators are not held by high-income economies. For example, in Southeast Asia, Thailand takes first place in business R&D globally, and Malaysia is top in high-tech net exports globally.
Apart from that, India, Vietnam, Kenya, and Moldova hold the record of being innovation achievers for 10 consecutive years.
#5 Regional divides persist, yet some economies harbour significant innovation potential
Despite some innovation "catch-up", regional divides exist with respect to national innovation performance: Northern America and Europe lead the way, followed by Southeast Asia, East Asia and Oceania, and more distantly by Northern Africa and Western Asia, Latin America and the Caribbean, Central and Southern Asia, and Sub-Saharan Africa, respectively.
#6 Innovation is concentrated at the level of science and technology clusters in select high-income economies
Divides also exist as to the ranking of the global science and technology clusters.
The top 100 clusters are located in 26 economies, of which six - Brazil, China, India, Iran, Turkey, and the Russian Federation - are in middle-income economies. The US continues to host the largest number of clusters (25), followed by China (17), Germany (10), and Japan (5).
In 2020, Tokyo-Yokohama is the top-performing cluster again, followed by Shenzhen-Hong Kong-Guangzhou, Seoul, Beijing, and San Jose-San Francisco.
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