"Our crude oil is innovative ideas from bright minds," says Swiss representative as country tops WIPO's Global Innovation Index 11th year running

Switzerland tops the World Intellectual Property Organisation’s Global Innovation Index 2021 (GII) for the eleventh year running, with Sweden, the USA, the United Kingdom, and the Republic of Korea making up the top five, in that order.

The GII is an annual ranking of the world’s economies on innovation capacity and output. While direct comparisons with previous GIIs are difficult, as the methodology evolves every year, WIPO Director General Daren Tang took the opportunity of the GII 2021 launch to ask Switzerland’s representative, Federal Councillor Karin Keller-Sutter, why the country has dominated the index for so long.

Her response? The size of Switzerland’s domestic market means it has to trade with other countries; but it has no natural resources, so it has to rely on innovation - “our crude oil is innovative ideas from bright minds.”

This, of course, echoes Mark Getty’s famous comment, quoted in an Economist interview in 2000, that “Intellectual Property is the oil of the 21st century.” Hopefully, though, IP can help solve the environmental crisis, not contribute to it…

The whole point of the GII is to provide a series of benchmarks and highlight best practices in innovation policy, and the countries on the list are committed to using it to improve how they encourage innovation in their jurisdictions.

That even applies to Switzerland: Ms Keller-Sutter admitted that her country still had things to learn, and that the GII 2021 would help.

This year’s edition, the 14th since the index’s launch in 2007, is obviously overshadowed by the global COVID pandemic. A new feature in the GII 2021, the Global Innovation Tracker, analyses innovation by industry, and, DG Daren Tang says, reveals a mixed picture over the past year:

"This year’s Global Innovation Index shows us that in spite of the massive impact of the COVID-19 pandemic on lives and livelihoods, many sectors have shown remarkable resilience – especially those that have embraced digitalization, technology and innovation. As the world looks to rebuild from the pandemic, we know that innovation is integral to overcoming the common challenges that we face and to constructing a better future. The Global Innovation Index is a unique tool to guide policy-makers and businesses in charting plans to ensure that we emerge stronger from the pandemic.”

The Global Innovation Tracker shows that software, internet and communications technologies, hardware and electrical equipment industry and pharmaceuticals and biotechnology invested more in innovation and R&D, while sectors heavily hit by the pandemic and attempts to contain it, such as transport and travel, cut spending.

The GII shows that only a few economies, mostly high income countries, consistently dominate the rankings. However, selected middle income economies, including China, Turkey, Viet Nam, India, the Philippines, are catching up and will change the innovation landscape, WIPO says.

Other findings include:

• Investments in innovation reached an all-time high before the pandemic with R&D growing at an exceptional rate of 8.5% in 2019.

• Government budget allocations for the top R&D spending economies for which data is available showed continued growth in 2020. The top global corporate R&D spenders increased their R&D expenditures by around 10% in 2020, with 60% of these R&D-intensive firms reporting an increase.

• The number VC deals grew by 5.8% in 2020, exceeding the average growth rate of the past 10 years. Strong growth in the Asia Pacific region more than compensated for declines in North America and Europe. Africa and Latin America and the Caribbean also registered double-digit increases. First quarter figures for 2021 suggest even more vibrant VC activity in 2021.

• The publication of scientific articles worldwide grew by 7.6% in 2020.

The GII 2021 does not include any measures covering how different countries are approaching policies around the use of IP and intangible assets for financial purposes. However, WIPO has publicly committed itself to driving the discussions on this key topic forward in the immediate future.

DG Daren Tang delivered a keynote address at the launch of the Global Innovation Policy Center IP Index 2021 in Washington, DC, in March 2021. In it, he outlined three key objectives for the organisation: the first two were to improve its services, with the help of feedback from the global community, and to promote the value of IP not just with policy makers and politicians, but also ordinary people and in particular younger people.

The third objective, which he admitted this was longer term than the other two, but “no less strategic in importance, is our collective efforts to address the rise of intangible assets. These assets, not just registrable IP but also trade secrets, data, know how, etc, have emerged in industrialised economies as a dominant asset class in domestic economies and in time to come will also dominate the global economy.”

He concluded: “WIPO therefore intends to work with other stakeholders, including UN agencies and other international organisations, IP offices and government agencies, think tanks and NGOs, to address this issue.”

If WIPO succeeds in this objective, then future GII reports may include policies surrounding IP as collateral, as well as other IP-finance related measurements, as part of the scoring system to determine national rankings.

The GII 2021 is published by WIPO, in partnership with the Portulans Institute and corporate partners: The Brazilian National Confederation of Industry (CNI), Confederation of Indian Industry (CII), Ecopetrol (Colombia) and the Turkish Exporters Assembly (TIM).

The full report can be downloaded from WIPO.