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).
Which countries are the most innovative? In the Bloomberg Innovation Index, dozens of countries were analyzed using seven metrics: research and development, gross value added by manufacturing, productivity, high-tech company density, researcher concentration, tertiary efficiency, and patent activity.
In the 2020 Bloomberg Innovation Index, Germany took over the number one spot, knocking South Korea to second. 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 third for patent activity and fourth for gross value added by manufacturing, which primarily comes from its car-making industry.
2. South Korea
South Korea is the second-most innovative country in the world, bumped from its first-place position by Germany. South Korea’s best performing metric is research and development intensity, which it ranked second for. South Korea also ranked third for gross value added by manufacturing, fourth for high-tech company density, and fifth for researcher concentration. South Korea is home to companies such as Samsung, LG, and Hyundai.
Singapore, which moved up three spots this year, is ranked as the third-most innovative country. Singapore ranked first for tertiary efficiency, with almost 85% gross enrollment in higher education as of 2017. Additionally, Singapore ranks second for gross value added by manufacturing, third for productivity, and fifth for patent activity.
Switzerland held its spot as the fourth-most innovative country in the world. Switzerland ranked third for both research and development and researcher concentration. Switzerland is among the countries with the highest spending on research and development concerning GDP. The private sector accounts for more than two-thirds of Switzerland’s R&D expenditure.
Sweden moved up two spots this year to be the fifth-most innovative country in the world. Sweden ranks fourth for research and development intensity and seventh for both high-tech company density and researcher concentration. In 2017, Sweden invested SEK 155.5 billion (US$154 billion) in R&D.
Israel ranks sixth overall for the most innovative country in the world but first for research and development intensity and second for researcher concentration. Israel’s large pool of STEM talent, entrepreneurial talent, low costs of R&D talent have made it a competitive country for the United States to outsource R&D too. 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 the seventh-most innovative country in the world, falling four places this year from third last year. Finland ranks ninth for productivity and researcher concentration. The country excels in technology and high-tech solutions. Finnish innovations include the Linux operating system and text messaging.
Denmark, moving up three spots from last year, is the eighth-most innovative country in the world. Demark ranks first for researcher concentration and seventh for research and development. The majority of research is done in the higher education sector and expenses are mostly allocated towards health services R&D. Additionally, Denmark ranks sixth in the world for productivity and eighth for its concentration of high-tech companies.
9. United States
The United States is the ninth-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.
France kept its place at the tenth-most innovative country in the world. France, which its known for art, culture, literature, and cuisine, ranks second for its high-tech company density. The country is home to over 95 B2B tech companies such as Dassault Systèmes, Mention, and AgoraPulse. Additionally, France ranks eighth for patent activity.