These are the world’s most innovative countries. The US isn’t even in the top 5.

January 27, 2020
7 minutes read

Germany has been named the most innovative country in the world, according to Bloomberg’s latest Innovation Index.

It only just beat South Korea, which has ranked first for six years.

The US only came in ninth, while Singapore jumped from sixth place last year to third in 2020.

Germany’s top score comes as a surprise given its economy has been struggling in recent months.

Germany has broken South Korea’s six-year reign as the “the most innovative nation in the world,” according to the latest Bloomberg Innovation Index. The US ranked ninth, while China came in 15th.

A total of 60 nations are included in the index, which is compiled using criteria including research and development spending, manufacturing capability, and concentration of high-tech public companies.

Innovation was a hot topic this week at the World Economic Forum in Davos, Switzerland, as the political, academic, and business elite discussed technological solutions to the current climate crisis.

Germany secured first place because of its positive ratings in patent activity, high-tech density, and value-added manufacturing. South Korea, on the other hand, recorded a slump in productivity, pushing it down to second place.

The result is somewhat surprising, as Germany’s economy has been struggling. In 2019, it grew at its slowest pace in six years due to trade conflicts, a crisis in the automotive industry, and Brexit.

Meanwhile, Singapore rose from sixth place to third overall, and three Nordic countries made it into the top 10.

Japan’s innovation ranking dropped by three spots since last year (it is now in 12th place), and the US, which held first place when the Bloomberg Index first debuted in 2013, is now only the ninth most innovative country in the world. The second-largest economy, China, rose one spot to 15th.

Here are the top 10 most innovative countries 2020, according to the latest Bloomberg Index. 10. France

France is one of the few countries on this list that didn’t change its ranking.

It was marked well for investment in corporate research and development and its telecommunications infrastructure, but its education system didn’t stack up to the competition. 9. United States

When Bloomberg’s index first debuted in 2013, the US took the top spot. Since then it has dropped considerably in the rankings, but it can at least claim world-beating performances in two categories: high-tech density and patent activity.

Half of the exchange-traded companies with the highest research and development expenditures in their most recent fiscal years were American-led, including Amazon and Microsoft. 8. Denmark

Denmark is one of three Nordic countries in the top 10 of Bloomberg’s innovation index.

It consistently ranks high in the Global Innovation Index too, which found that the nation has made huge steps in human capital and research, infrastructure, and business sophistication. 7. Finland

Finland has dropped from third place last year to seventh place in 2020.

While it is one of the steadiest performers of the index and scores good points in all categories, it never reaches the top three in any. 6. Israel

Israel slipped by one ranking from last year.

While it lagged behind in measures of manufacturing, productivity, and efficiency, it still placed first in R&D intensity. 5. Sweden

Sweden, the runner-up in 2018, fell to seventh place.

It scores consistently well in the manufacturing category, and has seen improvement in its technology sector with Spotify taking on the biggest of the US tech giants. 4. Switzerland

Switzerland consistently finds itself in the top 20 most innovative countries in the world. It is always one of the top contenders in the Global Innovation Index too.

Home to pharmaceutical giants Novartis and Hoffmann-La Roche, it is not surprising that the country has a high ranking for value-added manufacturing. 3. Singapore

Singapore has seen considerable gains, rising from sixth place last year to third place in 2020. Its ascent was aided by improvements in productivity and value-added manufacturing. 2. South Korea

South Korea only missed out on first place by a very small margin. The country relies heavily on its tech-oriented companies such as Samsung Electronics, Hyundai Motors, and LG Electronics.

“We don’t have any other natural resources – we only have our brains to turn to,” Chang Suk-Gown, a business management professor at Seoul’s Hanyang University, told Bloomberg.

“The expression that’s often bandied about in South Korea is the ‘super gap.’ It’s about widening whatever lead South Korea has – or else China will catch up.” 1. Germany

Mechanical engineering and automotive industries, in particular, are responsible for a large part of Germany’s success in this year’s ranking, the chief economist at Hamburg Commercial Bank, Cyrus de la Rubia, told Business Insider.

But while the country has scored high in many categories, de la Rubia sees room for improvement. “As positive as the ranking may sound, we cannot ignore the fact that Germany is far behind other countries in terms of education,” said de la Rubia. “Education is the cornerstone for future top positions – both in early childhood and in the university sector.”

In addition to the automotive industry, de la Rubia emphasizes the importance of mechanical engineering in Germany. “The mechanical engineering sector is home to numerous companies that are leading this field – especially in medical technology and optical devices. The products of these companies are often unique selling points and difficult to copy,” he said.

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Faruq Hunter

Faruq Hunter is the founder of the Freedom Nation, an aspiring international network of smart eco-villages, sustainable farms, homesteads and Fab Labs that serve as self-sustaining communities for pioneering makers and innovators trying to fix the world's greatest problems. For more than two decades, he has travelled and worked in over 80 countries, servicing both the public and private sectors

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