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Bloomberg Innovation Index 2021 –South Korea Reclaims Top Position

Bloomberg L.P. is a financial, software, data, and media company with its headquarters located in New York City. Every year, the company publishes the Bloomberg Innovation Index, which is a global ranking of the 60 most innovative countries. To compile the rankings, Bloomberg uses data from institutions such as the World Bank, the World Intellectual Property Organization, the United States Patent and Trademark Office, the OECD and UNESCO. For the full 2021 rankings, please visit the website of Bloomberg L.P.

The metrics used for this year’s list comprised six criteria includ-ing: research and development expenditure as a percentage of GDP; productivity; patent activity; concentration of researchers, including postgraduate PhD students, engaged in R&D per one million people; concentration of high-tech companies; and tertiary education efficiency (the total enrolment in education and the share of the labour force with a higher level of education).

The 2021 rankings have made one thing clear - the Covid-19 pandemic has spurned the develop-ment of innovative ideas and designs, from measures taken by governments to contain the pan-demic, to establishing an advanced digital infrastructure, as well as the fast production of vac-cines against the disease. Good examples of this development are, for example, high-tech com-panies such as Zoom Video Communications Inc. or the vaccine-maker Pfizer Inc., which has en-abled an adequate and relatively quick response to this challenging situation.

It therefore comes as no surprise that many countries which occupy top places in the rankings, such as Korea, Germany and Israel, have been leading in the fight against the pandemic, employ-ing efficient solutions such as contact-tracing or speedy vaccination of the population, once vac-cines become available. It is important to note in this respect that one of the most important parameters of successful innovative ideas, services or products is how readily they are accepted and implemented by societies around the globe.

The first three spots in the rankings were claimed by South Korea, Singapore and Switzerland. Places 4 and 5 were awarded to Germany and Sweden. South Korea’s return to the top spot is mainly due to an increase in patent activity, where it ranks top, alongside a strong performance in R&D and manufacturing. Globally, South Korea has a middle position between technically more advanced nations and China, which is quickly gaining ground in the technology sector. Singapore scores high in manufacturing and its globally competitive universities have helped it claim the top spot of the tertiary education gauge. Universities in Singapore, among other things, play an important role in designing and establishing innovative renewable energy systems. A good ex-ample of this is the National University of Singapore hosting the NUS Flagship Green Energy Programme, as well as Singapore’s first net-zero energy building. Switzerland, which is at the forefront of financial and biological technology, ranks near the top in both of the research cate-gories of the index. Germany, meanwhile, has relinquished its top position from last year, mainly due to a lack of skilled workers and a strategy for next-generation technology. It is now placed 4th in the rankings.

The two biggest economies, the U.S. and China, which are responsible for much of the world’s innovation, both witnessed a decline in this year’s rankings. They now occupy places 11 and 16, respectively. The US scored badly in higher education. Among the main reasons for this were the Trump administration’s visa policies, which complicated enrolment for foreign students, and later the onset of the pandemic. Another factor for the overall poorer result of the US might be that, as many innovative ideas tend to come from small companies nowadays, it takes more time for these ideas to be converted into marketable products. The Chinese economy, on the other hand, has improved on its rivals with a faster recovery from the coronavirus decline, but its drop in the index might point to longer-term issues such as the erosion of value-added manufacturing. Re-gional competitors like Vietnam and Bangladesh have performed better regarding this parameter.
Among the countries which have performed very well in this year’s index were India, which se-cured a place in the top 50 for the first time since 2016, and Uruguay, which qualified for the first time. However, Argentina and Algeria have dropped the greatest number of positions compared to last year (-6 and -10 places, respectively).
All in all, in the top 10 seven spots are occupied by European countries, while the remaining three are claimed by two Asian countries (South Korea and Singapore) and one Middle Eastern nation (Israel). Positions 11 to 20 also show a high presence of European countries (6 spots), as well two Asian nations and Australia.