The World’s 10 Most Innovative Economies
In the 21st century, innovation has become the heart and soul of economic policy. Developed and developing nations alike are in the race to leave industrialization behind, adapting instead to technology-focused, entrepreneurial societies.
Customized cancer treatment, faux meat products, and the smart home technologies are frequently positioned as ‘the next big thing’. But which countries are consistently innovating the most?
Today’s graphic comes from the seventh annual Bloomberg Innovation Index and highlights the 10 most innovative economies, and the seven metrics used to rank 2019’s top contenders.
Bloomberg calculated each country’s innovation score using seven equally-weighted metrics.
- R&D Spending
All research and development funding invested in an economy each year.
- Patent Activity
Number of domestic patents filed, total patent grants, patents per population, filings per GDP, and total grants awarded measured against the global total.
- Tertiary Efficiency
Total enrollment at post-secondary institutions, graduation levels, and number of science and engineering graduates.
- Manufacturing Value-added
Manufacturing output levels that contribute to exports and domestic economic growth.
Overall productivity levels of the working-age population.
- High-tech Density
Number of domestic high-tech public companies, measured against the number of domestic public companies and the global total of public high-tech companies.
- Researcher Concentration
Number of professionals currently engaged in research and development roles.
More than 200 countries were initially considered for Bloomberg’s Innovation Index. Any country reporting in less than six categories was automatically eliminated, leaving 95 countries remaining. Bloomberg publishes the results for the top 60 most innovative economies each year.
Notable Countries in the Top 60
The U.S. rejoined the top 10 after dropping to 11th in 2018 for low scores in education. Israel moved up five spots to 5th place, while Romania made the largest overall gain, jumping six spots to rank in the top 30.
|2019 Rank||Economy||Total Score||Change in Ranking|
|#1||🇰🇷 South Korea||87.38||0|
|#8||🇺🇸 United States||83.21||3|
Brazil rejoined the list at number 45, after not being included on the 2018 list. The United Arab Emirates made the list for the first time, marking the highest debut ever at number 46.
Tunisia and Ukraine were the two countries with the largest losses, which both fell out of the top 50 this year. To date, South Africa is the only Sub-Saharan nation to be ranked in the index.
Newcomers to the Innovation Index in 2019 are some of the largest emerging economies, such as India, Mexico, Vietnam, and Saudi Arabia.
Impact of Global Innovation
Innovation is complex─many factors play a role in the ideation, development, and commercialization of any new technology. And while innovation success can fuel economic growth, it is generally more accessible in high-income economies, where R&D funding is readily available.
“The battle for control of the global economy in the 21st century will be won and lost over control of innovative technologies.”
—Tom Orlik, Bloomberg Economics
The focus of an economy that prioritizes innovation, however, is not simply allocating resources for a group of people─it’s discovering new methods, models, and products that create a better quality of life for society.
Ranked: The 50 Most Innovative Companies
Companies need to adapt quickly to changing markets in order to thrive. Here’s a look at the top 50 most innovative companies in 2020.
Ranked: the Top 50 Most Innovative Companies in 2020
Corporate longevity is on the decline. In the 1960s, a typical S&P 500 company was estimated to last more than 60 years—these days, the average lifespan is just 18 years.
In today’s fast-paced world, companies need to stay relevant in order to survive. Because of this, it’s become increasingly more important for businesses to prioritize innovation.
This chart looks at the top 50 most innovative companies in 2020, based on a survey by Boston Consulting Group (BCG). The companies have been ranked based on four variables:
- Global “Mindshare”: The number of votes from all innovation executives.
- Industry Peer Review: The number of votes from executives in a company’s industry.
- Industry Disruption: A diversity index to measure votes across industries.
- Value Creation: Total share return.
Breakdown of the Leaderboard
BCG has been ranking the most innovative companies since 2005. Here’s a look at the top 50 most innovative companies in 2020:
|Rank||Company||Industry||HQ||Change from 2019|
|11||Tesla||Transportation & Energy||U.S.||-2|
|18||LG Electronics||Consumer Goods||South Korea||-|
|23||Philips||Pharmaceuticals & Medtech||Netherlands||6|
|26||Johnson & Johnson||Pharmaceuticals & Medtech||U.S.||-12|
|32||Volkswagen||Transportation & Energy||Germany||6|
|33||Bosch||Transportation & Energy||Germany||new|
|34||Airbus||Transportation & Energy||Netherlands||return|
|38||Bayer||Pharmaceuticals & Medtech||Germany||-14|
|39||Procter & Gamble||Consumer Goods||U.S.||return|
|40||Royal Dutch Shell||Transportation & Energy||Netherlands||-10|
|41||Toyota||Transportation & Energy||Japan||-4|
|46||FCA||Transportation & Energy||U.K.||new|
|47||Novartis||Pharmaceuticals & Medtech||Switzerland||new|
|49||Volvo||Transportation & Energy||Sweden||new|
When you think about innovative companies, Walmart might not be top of mind. However, the retail giant has moved up to the 13th spot on the list, an increase of 29 places since 2019.
Walmart has put significant efforts into its e-commerce and omnichannel offerings. For instance, the company launched NextDay Delivery in 2020, and now offers one-day delivery to a majority of the U.S. population. The company also has a stake in the Chinese e-commerce platform JD.com, which has grown from 5% to 12%.
Costco makes it to 30th place this year, and the company is known for its effective use of data. Thanks to the company’s members-only model, it has been able to compile a ton of information on its customers. It uses this data not only for marketing purposes, but to help streamline processes like recall notices. Costco also uses data monitoring sensors in its warehouses to save money on water usage and to spot any potential leaks before they happen.
Another company worth touching on is Huawei—the Chinese tech company has taken the 6th spot, a 42 rank increase since 2019. This rise in the ranks is likely due to the company’s significant $19 billion investment in research and development (R&D) in 2019. These types of investments seem to be paying off, as Huawei sold more smartphones in 2019 than Apple.
Innovation Leaders Come in All Sizes
While people may picture startups when they think of innovation and adaptability, big firms aren’t lagging far behind when it comes to innovation output.
In this context, firms with new product sales above their industry median are considered “innovation leaders.” Although 52% of small firms are considered innovation leaders, 43% of large firms still find themselves in the same boat.
In fact, because larger firms generally have more access to resources and manpower than smaller firms, they often have an advantage when it comes to research and development and the creation of innovation-focused programs.
Investing in innovation shows a far greater payoff down the line—firms that invested 1.4x more in innovation input saw 4x the amount of new products sales.
Innovation as a Lifestyle
Unless you’re in a startup that’s hoping to get acquired by a larger firm, innovation can’t be a one-hit-wonder. Yet, despite its importance, innovation over the long term is hard to maintain.
There have only been 8 companies that have appeared on the list every year. Here’s a look at the companies that have consistently made the cut since 2005:
These companies are serial innovators, and have managed to create innovation systems to perpetually foster creativity and agility. It’s an intentional, laborious process—but when done right, the payoff can be huge.
The Future of Remote Work, According to Startups
In an in-depth survey, startup founders and their teams revealed work-from-home experiences and their plans for a post-pandemic future.
No matter where in the world you log in from—Silicon Valley, London, and beyond—COVID-19 has triggered a mass exodus from traditional office life. Now that the lucky among us have settled into remote work, many are left wondering if this massive, inadvertent work-from-home experiment will change work for good.
In the following charts, we feature data from a comprehensive survey conducted by UK-based startup network Founders Forum, in which hundreds of founders and their teams revealed their experiences of remote work and their plans for a post-pandemic future.
While the future remains a blank page, it’s clear that hundreds of startups have no plans to hit backspace on remote work.
Based primarily in the UK, almost half of the survey participants were founders, and nearly a quarter were managers below the C-suite.
Prior to pandemic-related lockdowns, 94% of those surveyed had worked from an external office. Despite their brick-and-mortar setup, more than 90% were able to accomplish the majority of their work remotely.
Gen X and Millennials made up most of the survey contingent, with nearly 80% of respondents with ages between 26-50, and 40% in the 31-40 age bracket.
From improved work-life balance and productivity levels to reduced formal teamwork, these entrepreneurs flagged some bold truths about what’s working and what’s not.
Founders With A Remote Vision
If history has taught us anything, it’s that world events have the potential to cause permanent mass change, like 9/11’s lasting impact on airport security.
Although most survey respondents had plans to be back in the office within six months, those startups are rethinking their remote work policies as a direct result of COVID-19.
How might that play out in a post-pandemic world?
Based on the startup responses, a realistic post-pandemic work scenario could involve 3 to 5 days of remote work a week, with a couple dedicated in-office days for the entire team.
Upwards of 92% of respondents said they wanted the option to work from home in some capacity.
It’s important to stay open to learning and experimenting with new ways of working. The current pandemic has only accelerated this process. We’ll see the other side of this crisis, and I’m confident it will be brighter.
— Evgeny Shadchnev, CEO, Makers Academy
Productivity Scales at Home
Working from home hasn’t slowed down these startups—in fact, it may have improved overall productivity in many cases.
More than half of the respondents were more productive from home, and 55% also reported working longer hours.
Blurred lines, however, raised some concerns.
From chores and rowdy children to extended hours, working from home often makes it difficult to compartmentalize. As a result, employers and employees may have to draw firmer lines between work and home in their remote policies, especially in the long term.
Although the benefits appear to outweigh the concerns, these issues pose important questions about our increasingly remote future.
Teams Reveal Some Intel
To uncover some work-from-home easter eggs (“Better for exercise. MUCH more pleasant environment”), we grouped nearly 400 open-ended questions according to sentiment and revealed some interesting patterns.
From serendipitous encounters and beers with colleagues to more formal teamwork, an overwhelming number of the respondents missed the camaraderie of team interactions.
It was clear startups did not miss the hours spent commuting every day. During the pandemic, those hours have been replaced by family time, work, or other activities like cooking healthy meals and working out.
Remote working has been great for getting us through lockdown—but truly creative work needs the magic of face to face interaction, not endless Zoom calls. Without the serendipity and chemistry of real-world encounters, the world will be a far less creative place.
— Rohan Silva, CEO, Second Home
The Future Looks Remote
This pandemic has delivered a new normal that’s simultaneously challenging and revealing. For now, it looks like a new way of working is being coded into our collective software.
What becomes of the beloved open-office plan in a pandemic-prepped world remains to be seen, but if these startups are any indication, work-life may have changed for good.
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