Singapore rises to fifth place in Global Innovation Index 2023

SINGAPORE has moved up two spots to fifth place in the Global Innovation Index (GII), leading the South-east Asia, East Asia and Oceania (SEAO) region.

Switzerland retained the crown for the 13th year in a row in the ranking published by the World Intellectual Property Organisation (Wipo). Sweden moved up a spot to second place, and the US down a spot to third. The UK took fourth place.

The GII is a global ranking of the world’s most innovative economies. This year, the index used 80 indicators to track innovation trends in 132 economies.

The US, Singapore and Israel topped the highest number of indicators. Singapore continued to top 11 out of 80 indicators, including government effectiveness, information and communications technology (ICT) access, and venture capital (VC).

The report noted that five other SEAO economies – South Korea, China, Japan, Hong Kong and Australia – topped key innovation indicators, such as labour productivity growth in the case of China, and production and export complexity in the case of Japan.

Globally, corporate research and development expenditure reached a historic high of US$1.1 trillion in 2022, primarily driven by ICT companies.

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“While many governments still struggle with the massive amounts of public debt accumulated during Covid, the business sector has continued to increase its levels of innovation,” said Bruno Lanvin, an Insead distinguished fellow and co-editor of the GII.

However, this trend may mask growing disparities, he added. Some sectors – notably in the artificial intelligence field – have attracted significant funding, while gaps are showing up elsewhere, especially for small and new businesses.

“Against the background of growing trade tensions and lower levels of international cooperation, such trends could hamper the ability of innovative firms to fully contribute to the resumption of sustainable growth,” he said.

“Despite a downturn in VC funding, the GII 2023 should reassure us that innovative activity currently continues to run strong, but that innovative activity should continue to shift from quantity to quality,” said Daren Tang, Wipo director-general.

This year’s GII also added a new indicator on the combined valuation of a country’s unicorns – privately-held startups valued at over US$1 billion.

In terms of the cumulative value of unicorns after accounting for gross domestic product, five economies – Estonia, Israel, Lithuania, Senegal and the US – took joint first place. Singapore ranked eighth.

Although VC funding in 2022 was 40 per cent lower year on year, the US$380 billion invested was the highest in a decade, excluding 2021’s boom.

But the global VC outlook is becoming more uncertain, said Tang, with high interest rates likely to continue impacting the financing of innovation in 2023 and 2024.