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SOUTH KOREA returned to first place in the latest Bloomberg Innovation Index, while the US came out of a top 10 presented by a group of European countries. Korea regained the crown from Germany, who fell to fourth place. The Asian nation has led the index for seven of the nine years it has been published. Singapore and Switzerland each moved up one spot to second and third.
The Bloomberg index analyzes dozens of criteria using seven equally weighted metrics, including research and development spending, manufacturing capacity, and the concentration of high-tech public companies.
The 2021 rankings reflect a world in which the fight against COVID-19 has brought innovation to the fore, from government efforts to contain the pandemic to digital infrastructure that has enabled economies to overcome it and the race to develop vaccines that can kill it. . “In the year of COVID and in the face of the urgency of climate change, the importance of the fundamentals of innovation only increases,” said Catherine Mann, global chief economist at Citigroup, Inc. “Innovation is often measured by new ideas. , new products and new services, ”he said, but it is their“ diffusion and adoption ”that is the true metric of success.
Much of the Bloomberg data comes from before the virus crisis. Still, it is notable that many countries at the top of the index, such as Korea, Germany and Israel, have been world leaders in some areas of the fight against the pandemic, be it contact tracing or rapid vaccination. American names such as Zoom Video Communications, Inc. or the vaccine manufacturer Pfizer, Inc. are among last year’s innovation emblems, reflecting the highest ranking in the United States for the density of high-tech companies.
The pandemic has also highlighted a different kind of breakthrough, one that has more to do with politics and organization than technology or research, according to Nobel Prize-winning economist Paul Romer. “We must recognize that the metrics available miss important dimensions of innovation,” said Romer, a professor at New York University’s Stern School of Business. “Officials in Wuhan demonstrated for the first time that it is feasible to test 10 million city residents in a couple of weeks. This was a very important public health innovation. “
‘HAVE A FUTURE’
Korea’s return to first place is primarily due to an increase in patent activity, where it ranks first, along with strong R&D and manufacturing performance.
There is almost complete agreement in South Korea that “R&D is essential for a future,” said Lee Kyung-mook, a professor of business management at Seoul National University. “It is sandwiched between more developed nations, which still outperform them in technology, and China, which is catching up quickly by relying on lower labor costs.”
Second-ranked Singapore, which has been allocating budget funds to help workers and businesses transition to a digital economy, also scores high in manufacturing, with its globally competitive universities putting it at the top. of the tertiary education indicator. Switzerland, a leader in fintech and biological technology, ranks first in the index’s two research categories.
Germany’s loss of the crown follows a warning two years ago from Juergen Michels, chief economist at Bayerische Landesbank, who said the country lacked skilled workers and a proper strategy for next-generation technology.
As the two largest economies, the United States and China account for much of the world’s innovation, and they are also locked in a battle over key policy areas such as intellectual property rights. The gap between them has decreased steadily over the life of the index. This year, both saw their rankings drop.
The United States, which topped Bloomberg’s first innovation index in 2013, fell two places to 11th. In a report last year, the National Science Board found that “where the United States was once the undisputed leader in science and engineering, we are now playing a less dominant role.”
The country scores poorly in higher education, even though American universities are world famous. That poor performance was likely compounded by hurdles for foreign students, who are generally prominent in science and technology classes, first due to the Trump administration’s visa policies and then the pandemic.
New President Joe Biden made a promise to revitalize American manufacturing with a $ 300 billion investment in R&D and cutting-edge technologies, a policy he called “Innovate America.”
Sung Won Sohn, an economist at Loyola Marymount University in Los Angeles, says the United States is still at the forefront, but today its innovations tend to come from smaller companies and take longer to reach the consumer. “There are a lot of new ideas from a lot of start-ups,” he said. “It will take time for ideas to translate into marketable products.”
China, which fell one place to 16th In the 2021 index, it is locked in a battle with the US over key aspects of innovation policy. – Bloomberg
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