Ranked: The Most Innovative Economies in the World
Innovation was again a front-of-mind theme in Davos at the World Economic Forum’s annual assembly of political and business leaders in 2020.
The global conversation centered around the ability of countries to innovate in the face of changing times. An economy’s response to megatrends, such as tech breakthroughs and the risks of climate change, can dictate its long-term success.
Today’s chart identifies the world’s top 20 most innovative economies, based on the annual index created by Bloomberg. We also delve into how the top 10 spots have evolved over time.
How Are Innovative Economies Measured?
Each year, the index assesses over 200 economies across seven weighted metrics.
- R&D Intensity
Annual research and development spending, as a % of an economy’s gross domestic product (GDP).
- Patent Activity
The number of annual patent and grant filings, and the 3-year average growth of filings abroad and filings growth, as a share of the world’s total patent growth.
- Tertiary Efficiency
The total enrollment in higher education, the share of labor force with advanced education levels, and the share of STEM graduates and in the labor force.
- Manufacturing Value-added
Manufacturing output levels—contributing to exports—as a % of GDP, and per capita.
GDP and gross national income (GNI) in the working age population, and the 3-year improvement.
- High-tech Density
The volume of domestic, high-tech public companies as a share of the world’s total companies. Examples of high-tech companies include: aerospace and defense, biotech, internet services, and renewable energy.
- Researcher Concentration
Professionals (including postgraduate PhD students) engaged in R&D across the population.
Based on available data of these measures, only 105 countries made the final cut for this year’s edition of the index—below are the 60 most innovative economies scored out of 100 points, and the highlights from that list.
The 10 Most Innovative Economies
For the first time in years, Germany clinched the top spot for the most innovative economy, ending South Korea’s winning streak. The European nation scores in the top five for its manufacturing value-added, high-tech density, and patent activity metrics.
However, even winners have some room for improvement. As the global economy sways ever more in the direction of services over manufacturing, Germany could improve its rate of higher education to achieve an even better score on the index.
Ranking third overall, Singapore leads the charge for tertiary efficiency, with almost 85% gross enrollment in higher education as of 2017. In contrast, Germany’s enrollment stood at around 70% in the same year.
Which other countries sit in the top 10?
|Rank||Country||Score||YoY Rank Change||Best-performing Metric|
|#1||🇩🇪 Germany||88.21||+1||High-tech density, Patent activity (tied)|
|#2||🇰🇷 South Korea||88.16||-1||R&D intensity|
|#3||🇸🇬 Singapore||87.01||+3||Tertiary efficiency (Ranked #1)|
|#4||🇨🇭 Switzerland||85.67||0||R&D intensity, Researcher concentration (tied)|
|#5||🇸🇪 Sweden||85.50||+2||R&D intensity|
|#6||🇮🇱 Israel||85.03||-1||R&D intensity (Ranked #1)|
|#7||🇫🇮 Finland||84.00||-4||Productivity, Researcher concentration (tied)|
|#8||🇩🇰 Denmark||83.22||+3||Researcher concentration (Ranked #1)|
|#9||🇺🇸 United States||83.17||-1||High-tech density, Patent activity
(Tied, Ranked #1 for both)
|#10||🇫🇷 France||82.75||0||High-tech density|
A global hub for innovation, South Korea is still not to be ignored. With one of the most complex economies around, it leads in exports of communications technology and cars. It’s also at the forefront of 5G, being the first country to roll it out—so it’s no surprise that South Korea spends big on research, relative to its GDP.
R&D spending determines life or death for South Korean companies… It’s about widening whatever lead South Korea has—or else China will catch up.
—Chang Suk-Gwon, University professor in Seoul
The United States ranks in first place for both patent activity, and high-tech density—with the highest share of domestic high-tech public companies in the world. With the “Big Five” tech giants all headquartered here, it’s easy to see their impact on a global scale.
Over the past five years, the top 10 players in this index have shuffled around, but remained quite consistent. But one particular economy may well upend the future leaderboard.
The Most Innovative Economies (#11-20)
In 2020, the #11-#20 ranked innovative countries show an interesting mix.
|Rank||Country||Score||YoY Ranking Change||Best-performing metric|
|#11||🇦🇹 Austria||82.40||+1||R&D intensity|
|#12||🇯🇵 Japan||82.31||-3||R&D intensity, Manufacturing value-added (tied)|
|#13||🇳🇱 Netherlands||81.28||+2||High-tech density|
|#14||🇧🇪 Belgium||79.93||-1||R&D intensity, Productivity (tied)|
|#15||🇨🇳 China||78.80||+1||Patent activity (Ranked #2)|
|#16||🇮🇪 Ireland||78.65||-2||Manufacturing value-added, Productivity
(Tied, Ranked #1 for both)
|#18||🇬🇧 United Kingdom||76.03||0||Tertiary efficiency|
|#19||🇮🇹 Italy||75.76||+2||High-tech density|
China’s steady rise (up from 21st place in 2017) could be because it scores second worldwide for patent activity. This comes from the aggressive 6,000 patents filed since 2015 by the nation’s own tech giants. The patents cover breakthrough technologies from AI and blockchain, to autonomous driving and even regenerative medicine.
Ireland comes in first place on both manufacturing value-added and productivity metrics. In fact, for every hour worked, employed Irish people add $99.50 to national GDP.
The Full List
Below is the full list of all 60 innovative economies highlighted in the 2020 index.
|Rank||Country||Score||YoY Ranking Change|
Highlights from the rest of the list include:
- Slovenia improved the most by 10 places (to the #21 spot) thanks to its stronger patent activity.
- New Zealand slid by 10 places to the 29th spot, falling for the third consecutive year.
- Last but not least, four countries or jurisdictions made their debut onto the index in 2020: Algeria, Egypt, Kazakhstan, and Macao.
It’s clear that many countries are continuously pushing the envelope in order to maintain their competitiveness within the global economy—and constant innovation can provide a better life for their present and future populations.
Bitcoin is Near All-Time Highs and the Mainstream Doesn’t Care…Yet
As bitcoin charges towards all-time highs, search interest is relatively low. How much attention has bitcoin’s recent rally gotten?
Bitcoin Near All-Time Highs vs. Search Interest
Just about every financial asset saw a huge drop in March, but few have had the spectacular recovery that bitcoin has had since then.
Up more than 300% from the March lows, bitcoin is within $1,000 of its all-time high ($19,891) established three years ago. While 2017’s run-up saw a huge surge in Google searches, interest this time around is less than a quarter of what it was back then.
This graphic overlays bitcoin’s price changes against Google search interest for “bitcoin” between 2017-Nov 2020, showing the muted relative search interest for its recent rally. Despite Google search interest being low, it is turning upwards, potentially hinting at a rise to cap off 2020.
Nobody’s Searching? Maybe Bitcoin is Already Mainstream
Bitcoin’s mainstream attention in 2017 was exceptional, and was likely the first time many people had even heard about the digital asset.
After doing all of their Google research back then, it’s possible that the general population is now well aware of the cryptocurrency and doesn’t need to search up the basics again. Add to this that bitcoin is now easily purchasable through popular services like Robinhood and Paypal, and you have fewer people who need Google to figure out the intricacies of bitcoin wallets and transactions.
While people might not be searching for information on bitcoin, the media has certainly picked up on its movement over the past year. Mainstream coverage regarding the cryptocurrency is currently at a relative all-time high for the past 12 months.
Even if current mainstream coverage isn’t far from previous peaks, it’s still likely that people are seeing an increase in bitcoin content in their news feeds following the recent surge.
This rally is also attracting increased talk on social media sites like Twitter. That said, while there has been a rise in the volume of bitcoin-related tweets in November 2020, numbers are still quite low compared to the amount of tweets in 2017.
Daily tweet volume reached above 60,000 recently, but is still far from the +100,000 daily tweets that were being sent at the top of 2017’s bull run.
Where in the World is Google Search Interest for Bitcoin?
Even if worldwide search interest isn’t as high as it was in 2017, there is one country where bitcoin is being googled more now: Nigeria.
Since 2015, the Nigerian Naira has lost more than 50% of its value against the U.S. dollar. This, coupled with the country’s high share of unbanked citizens means that alternative currencies and payment methods have steadily risen in popularity and utility.
FinTech startups like Chipper Cash are providing Nigeria and other African nations with no-fee P2P payment services, along with the ability to trade bitcoin. The service is also beta testing the buying and selling of fractional shares of popular U.S. stocks.
Started up in 2018, Chipper Cash’s monthly payment values are now over $100 million, and the company has attracted investment from top VC funds like Bezos Expeditions as they provide a valuable service in an emerging market.
If Bitcoin is Mainstream, Where Does It Go From Here?
While bitcoin is proving itself to be a useful medium of exchange around the world, it’s still primarily a speculative asset. As 2020 saw massive increases in money supply across the board, bitcoin reacted best compared to other speculative assets, with its ascent to $19,000 almost completely uninterrupted since the $10,000 price area.
Time will tell if 2017 is set to repeat itself, or if bitcoin is getting ready to set new all-time highs going into 2021.
50 Years of Gaming History, by Revenue Stream (1970-2020)
Visualizing 50 years of gaming history, from the first wave of arcades and home consoles to a tsunami of mobile gaming.
50 Years of Gaming History, by Revenue Stream (1970-2020)
View a more detailed version of the above by clicking here
Every year it feels like the gaming industry sees the same stories—record sales, unfathomable market reach, and questions of how much higher the market can go.
We’re already far past the point of gaming being the biggest earning media sector, with an estimated $165 billion revenue generated in 2020.
But as our graphic above helps illustrate, it’s important to break down shifting growth within the market. Research from Pelham Smithers shows that while the tidal wave of gaming has only continued to swell, the driving factors have shifted over the course of gaming history.
1970–1983: The Pre-Crash Era
At first, there was Atari.
Early prototypes of video games were developed in labs in the 1960s, but it was Atari’s release of Pong in 1972 that helped to kickstart the industry.
The arcade table-tennis game was a sensation, drawing in consumers eager to play and companies that started to produce their own knock-off versions. Likewise, it was Atari that sold a home console version of Pong in 1975, and eventually its own Atari 2600 home console in 1977, which would become the first console to sell more than a million units.
In short order, the arcade market began to plateau. After dwindling due to a glut of Pong clones, the release of Space Invaders in 1978 reinvigorated the market.
Arcade machines started to be installed everywhere, and new franchises like Pac-Man and Donkey Kong drove further growth. By 1982, arcades were already generating more money than both the pop music industry and the box office.
1985–2000: The Tech Advancement Race
Unfortunately, the gaming industry grew too quickly to maintain.
Eager to capitalize on a growing home console market, Atari licensed extremely high budget ports of Pac-Man and a game adaptation of E.T. the Extra Terrestrial. They were rushed to market, released in poor quality, and cost the company millions in returns and more in brand damage.
As other companies also looked to capitalize on the market, many other poor attempts at games and consoles caused a downturn across the industry. At the same time, personal computers were becoming the new flavor of gaming, especially with the release of the Commodore 64 in 1982.
It was a sign of what was to define this era of gaming history: a technological race. In the coming years, Nintendo would release the Nintendo Entertainment System (NES) home console in 1985 (released in Japan as the Famicom), prioritizing high quality games and consistent marketing to recapture the wary market.
On the backs of games like Duck Hunt, Excitebike, and the introduction of Mario in Super Mario Bros, the massive success of the NES revived the console market.
Estimated Total Console Sales by Manufacturer (1970-2020)
|Manufacturer||Home Console sales||Handheld Console Sales||Total Sales|
|Nintendo||318 M||430 M||754 M|
|Sony||445 M||90 M||535 M|
|Microsoft||149 M||-||149 M|
|Sega||64-67 M||14 M||81 M|
|Atari||31 M||1 M||32 M|
|Hudson Soft/NEC||10 M||-||10 M|
|Bandai||-||3.5 M||3.5 M|
Nintendo looked to continue its dominance in the field, with the release of the Game Boy handheld and the Super Nintendo Entertainment System. At the same time, other competitors stepped in to beat them at their own game.
In 1988, arcade company Sega entered the fray with the Sega Mega Drive console (released as the Genesis in North America) and then later the Game Gear handheld, putting its marketing emphasis on processing power.
Electronics maker Sony released the PlayStation in 1994, which used CD-ROMs instead of cartridges to enhance storage capacity for individual games. It became the first console in history to sell more than 100 million units, and the focus on software formats would carry on with the PlayStation 2 (DVDs) and PlayStation 3 (Blu-rays).
Even Microsoft recognized the importance of gaming on PCs and developed the DirectX API to assist in game programming. That “X” branding would make its way to the company’s entry into the console market, the Xbox.
2001–Present: The Online Boom
It was the rise of the internet and mobile, however, that grew the gaming industry from tens of billions to hundreds of billions in revenue.
A primer was the viability of subscription and freemium services. In 2001, Microsoft launched the Xbox Live online gaming platform for a monthly subscription fee, giving players access to multiplayer matchmaking and voice chat services, quickly becoming a must-have for consumers.
Meanwhile on PCs, Blizzard was tapping into the Massive Multiplayer Online (MMO) subscription market with the 2004 release of World of Warcraft, which saw a peak of more than 14 million monthly paying subscribers.
All the while, companies saw a future in mobile gaming that they were struggling to tap into. Nintendo continued to hold onto the handheld market with updated Game Boy consoles, and Nokia and BlackBerry tried their hands at integrating game apps into their phones.
But it was Apple’s iPhone that solidified the transition of gaming to a mobile platform. The company’s release of the App Store for its smartphones (followed closely by Google’s own store for Android devices) paved the way for app developers to create free, paid, and pay-per-feature games catered to a mass market.
Now, everyone has their eyes on that growing $85 billion mobile slice of the gaming market, and game companies are starting to heavily consolidate.
Major Gaming Acquisitions Since 2014
|Date||Acquirer||Target and Sector||Deal Value (US$)|
|Apr. 2014||Oculus - VR||$3 Billion|
|Aug. 2014||Amazon||Twitch - Streaming||$970 Million|
|Nov. 2014||Microsoft||Mojang - Games||$2.5 Billion|
|Feb. 2016||Activision Blizzard||King - Games||$5.9 Billion|
|Jun. 2016||Tencent||Supercell - Games||$8.6 Billion|
|Feb. 2020||Embracer Group||Saber Interactive - Games||$525 Million|
|Sep. 2020||Microsoft||ZeniMax Media - Games||$7.5 Billion|
|Nov. 2020||Take-Two Interactive||Codemasters - Games||$994 Million|
Console makers like Microsoft and Sony are launching cloud-based subscription services even while they continue to develop new consoles. Meanwhile, Amazon and Google are launching their own services that work on multiple devices, mobile included.
After seeing the success that games like Pokémon Go had on smartphones—reaching more than $1 billion in yearly revenue—and Grand Theft Auto V’s record breaking haul of $1 billion in just three days, companies are targeting as much of the market as they can.
And with the proliferation of smartphones, social media games, and streaming services, they’re on the right track. There are more than 2.7 billion gamers worldwide in 2020, and how they choose to spend their money will continue to shape gaming history as we know it.
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