SINGAPORE – Singapore has risen two places to fifth place in the Global Innovation Index (GII), leading the Southeast Asia, East Asia and Oceania (SEAO) region.
Switzerland retained the crown for the thirteenth consecutive year in the ranking published by the World Intellectual Property Organization (WIPO). Sweden moved up one place to second place and the United States moved down one place to third. The United Kingdom came in fourth place.
The GII is a global ranking of the most innovative economies in the world. This year, the index used 80 indicators to track innovation trends in 132 economies.
The United States, Singapore and Israel led the most indicators. Singapore continued to top 11 out of 80 indicators, including government effectiveness, access to information and communications technologies (ICT) and venture capital (VC).
The report noted that five other SEAO economies (South Korea, China, Japan, Hong Kong and Australia) topped key innovation indicators, such as labor productivity growth in the case of China, and production complexity and exports in the case of Japan.
Globally, business spending on research and development reached an all-time high of US$1.1 trillion (S$1.51 trillion) in 2022, driven mainly by ICT companies.
“While many governments are still struggling with the huge amounts of public debt accumulated during Covid, the business sector has continued to increase its levels of innovation,” said Bruno Lanvin, distinguished fellow at Insead and co-editor of the GII.
However, this trend can mask growing disparities, he added. Some sectors – particularly in the field of artificial intelligence – have attracted significant funding, while elsewhere gaps are emerging, especially for small businesses and startups.
“In a context of rising trade tensions and lower levels of international cooperation, such trends could hamper the ability of innovative companies to contribute fully to the resumption of sustainable growth,” he said.
“Despite a drop in venture capital funding, GII 2023 should reassure us that innovative activity currently remains strong, but that innovative activity should continue to move from quantity to quality,” said Daren Tang, CEO of WIPO.
This year’s Global Innovation Index also added a new indicator on the combined valuation of a country’s unicorns: private startups valued at more than $1 billion.
In terms of the cumulative value of unicorns after taking into account gross domestic product, five economies (Estonia, Israel, Lithuania, Senegal and the United States) ranked first. Singapore ranked eighth.
Although venture capital funding in 2022 was down 40 percent year over year, the $380 billion invested was the highest in a decade, excluding the 2021 boom.
But the global venture capital outlook is becoming more uncertain, Tang said, and high interest rates are likely to continue impacting innovation financing in 2023 and 2024.