Tightening monetary policy could impact future investment.
The World Intellectual Property Office (WIPO) has released its 15th Global Innovation Index (GII), which indicates that Switzerland, the US, Sweden, the UK, and the Netherlands are the world’s top five most innovative economies. The WIPO 2022 Global Innovation Index: What is the future of innovation driven growth report has the Republic of Korea, Singapore, Germany, Finland and Denmark completing the top ten. China came in at number 11.
The GII indicates that while innovation investments rose strongly in 2020 and 2021, the outlook for 2022 is clouded due to global uncertainty and continued underperformance in innovation-driven productivity.
‘This is why we need to pay more attention to not just investing in innovation, but how it translates into economic and social impact. Quality and value will become as critical to success as quantity and scale,’ the report asserts.
Press Conference: WIPO Global Innovation Index 2022
Key findings from the Global Innovation Index (GII) include that the top global corporate R&D spenders increased their R&D expenditure by almost 10% to more than $900 billion in 2021. Several sectors contributed to this increase including pharmaceuticals, biotechnology, and industrial metals.
Indeed, the WIPO’s report shows that the key indicators of global science and innovation investments; these being scientific publications, R&D expenditures, international patent filings and venture capital deals, remained strong during 2020 and 2021. However, the outlook for 2022 is one of possible challenges, with the report highlighting tightening monetary policies and the impact on money available to invest, leading to a decline in investment activity.
In the area of venture capital, growth was strong during 2021, increasing by 46%. This level of investment, the WIPO report says, is comparable to the internet boom years of the late 1990s. Latin America, the Caribbean, and Africa saw the largest growth in Venture Capital activity. The report also indicated that relative to their size, several developing economies including Brazil, Peru and Jamaica, along with newcomers Indonesia, Uzbekistan and Pakistan, are performing above expectation on innovation.
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