Innovation is key for a country to remain competitive on the global stage. A country’s innovation includes its government, fiscal policies, education policies, and innovation environment (innovation inputs) as well as its patents, technology, business performance, and economic growth (innovation outputs). Innovation is a major factor in determining which countries are the most technologically advanced countries in the world. Which countries are the most innovative? The annual Bloomberg Innovation Index analyzes 60 nations using dozens of criteria grouped into seven metrics: research and development, gross value added by manufacturing, productivity, high-tech company density, researcher concentration, tertiary efficiency, and patent activity. While the Bloomberg analysis is ostensibly focused upon the innovation of a nation's economy, the categories are so broad and comprehensive—and economies are so deeply entwined in most other aspects of life—that the analysis is often interpreted as a measure of not merely economic innovation, but innovation as a whole.
Top 10 Most Innovative Countries in the World - Bloomberg 2021
In the index's 2021 edition, South Korea regained the title of the nation with the most technologically advanced economy. South Korea’s best performing metric is patent activity, for which it ranked first in the world. South Korea ranked second for both research and development intensity and gross value added by manufacturing, fourth for high-tech company density, and third for researcher concentration. South Korea is home to companies such as Samsung, LG, and Hyundai.
Singapore ranked as 2021's second-most innovative country. Singapore's rise can be attributed to its rising productivity and manufacturing gains. Additionally, Singapore ranks third for gross value added by manufacturing, sixth for productivity, and fourth for patent activity. Singapore is also focused upon education, with 91.09% of eligible citizens either enrolled in or having completed some form of tertiary education in 2021.
Switzerland ranked as the third-most innovative country in the world in 2021. Switzerland ranked third for research and development, fourth for researcher concentration, and fifth for value added by manufacturing. Switzerland is among the countries with the highest spending on research and development in relation to GDP. The private sector accounts for more than two-thirds of Switzerland’s R&D expenditure.
Germany, which ranked #1 in 2020, fell to the fourth spot. Full of well-known tech companies and countless new tech start-ups, Germany ranked third for its density of high-tech companies. Germany also ranked sixth for gross value added by manufacturing, which primarily comes from its car-making industry, and 7th for R&D intensity. Germany is most known for its engineering, home to Volkswagen, Siemens, and more. Germany's government strongly supports research and development through both universities and organizations. Additionally, Germany is now a global leader in medicine, military technology, and infrastructure.
Ranking fifth overall,Sweden invested SEK 155.5 billion (US$154 billion) in R&D in 2017, which helps explain why the country achieved 2021 rankings of fourth for research and development intensity, sixth for high-tech density, and seventh for both tertiary efficiency and researcher concentration. Following Sweden is Denmark, which ranks second for researcher concentration and eighth for both R&D intensity and high-tech density. The majority of research is done in the higher education sector and expenses are mostly allocated towards health services R&D. Additionally, Denmark ranks third in the world for productivity.
Israel ranks first in the world for both R&D intensity and researcher concentration. Israel’s large pool of STEM talent, entrepreneurial talent, low costs of R&D talent have made it a competitive country in the global R&D market, with many U.S.-based clients. Israel even competes with Silicon Valley. Apple, IBM, AT&T, Samsung, GE, Paypal, Microsoft, and Motorola are only a few of the many tech giants that have an R&D presence in Israel. Finland is a jack of all trades, ranking between 10th and 17th in the world in all seven metrics. The country excels in technology and high-tech solutions. Finnish innovations include the Linux operating system and text messaging.
The Netherlands burst into the top 10 most innovative economies in 2021. But with rankings like seventh in the world in high-tech density, eighth in researcher concentration, and ninth in patent activity, it's easy to imagine the country hanging around in the top 10 for many years to come. The Netherlands is Europe's largest supplier of high-tech goods. Rounding out 2021's top 10 is Austria, which ranks sixth in the world for R&D intensity and ninth for both manufacturing value added and concentration of researchers. Austria's economy has numerous strengths, including its service, mechanical engineering, and organic farming sectors.
The United States is the eleventh-most innovative country in the world. Home to Google, Apple, Facebook, Twitter, Tesla, Amazon, Microsoft, Intel, and countless other the United States ranks first in the world for its concentration of high-tech companies. The United States also ranks first for patent activity, becoming the leader in the protection of intellectual property. Home to world-leading technology companies such as Google, Facebook, Apple, and Microsoft, the United States is a powerhouse in global technology. Silicon Valley inspired and produced an entire generation of software engineers and technology companies and is currently home to some of the world's biggest tech companies. The U.S. has made significant advances in space technology, pharmaceuticals, and telecommunications. The U.S. also has the largest and most technologically advanced military in the world. However, the United States' scores for higher education decreased in 2020/21, particularly in the government's policies toward international students and the way universities responded to the COVID-19 pandemic. As a result, the U.S. economy fell to eleventh place.