Some people think that innovation only benefits businesses. However, this is not the case. The effects of innovation go beyond organizational growth. In fact, it affects countries around the world that nations are even ranked for their innovative efforts globally.
In this article, we will discuss the four reasons why innovation is important to a country, and then, we will go through the list of the world’s top ten innovative countries.
Why is innovation important to a country?
Innovation is defined as the realization and implementation of new products, processes, propositions, or business models that create added value for customers and/or an organization’s employees.
It is known to largely contribute to a company’s growth and revenue. But, if you look at it deeper, innovation does so much more. Because when implemented, this process can become a major tool of national progress due to its cumulative effects.
To demonstrate further, here are four distinct reasons why innovation is important to a country:
1. Innovation promotes economic growth
Innovation is a critical engine for national economic development as it aids in the research, creation, and emergence of new industries and technologies.
This creates more employment opportunities for people, which in turn accelerates a country’s gross domestic product (GDP) — and in effect, their economic growth.
Case in point, the United States. Statistics show that the creation of jobs in America alone delivers 43.5% of the country’s overall gross domestic product.
From a national perspective, this effect leads us to another impact of innovation: wages.
2. Innovation raises wages
Specifically, when GDP rises, companies are more likely to give better wages. Technological advancements that spring from innovation lower production costs and facilitate increased output.
Hence, when an establishment chooses to either invest in or engineer new systems that sharpen employee productivity, they become more capable of responding to customers’ demands.
In other words, their production of goods and services increases, which in effect boosts wages, productivity, and corporate profitability.
3. Innovation solves national problems
Innovation can make a difference in addressing urgent developmental challenges such as providing access to drinking water, eradicating neglected diseases, and reducing hunger.
In fact, in this list of the top ten most innovative solutions across the globe, we have a water filter slash drinkable book, a scientific breakthrough of matching medicines and genomes through an open-source DNA database, and the incredible creation of edible utensils.
4. Innovation improves one’s quality of life
Innovation plays a vital role in the development of various items that significantly enhance our way of living.
These items include:
- Vaccines and antibiotics that help in battling life-threatening diseases like covid, polio, and many others
- Devices and applications that allow people from different places to brainstorm, communicate, and collaborate
- Home appliances that make household chores easier
- Solar panels that come in handy in case of a power outage
- Different modes of transportation via land, air, and water
How is the benefit of innovation measured?
From a national standpoint, the benefits of innovation are not only limited to the impacts that you can see or feel in real life. It can also be measured through the following methods:
- The number of government policies that support innovative efforts
- A country’s overall business performance
- Education policies on research and development
- Number of patents
- Innovation indices of different countries
- Data and statistics that support a particular innovation’s benefit to a certain country
- National records on different businesses and their contributions to national development
- Organizational information on the sales and distribution of different innovations made by companies in a specific location
- Researches and surveys on the feedback of citizens in a country-wide execution of various ideas and processes that come from innovative groups and enterprises
- Workers and job opportunities generated by different sectors and industries with the advent of new and innovative discoveries
What are the most innovative countries in the world?
Now that you know why innovation matters to a country and what methods you can use to measure its effects on a national scope, let’s find out which nations have made it to the Global Innovation Index’s list of the world’s most innovative countries.
This list will also include the companies whose innovative efforts have pushed their countries to shine the brightest in this aspect. Let’s begin.
1. South Korea
South Korea reclaimed its position as the country with the most technologically sophisticated economy in the index’s latest iteration. This country’s global innovation statistics include ranking:
- 1st in the number and rate of patent activity around the world
- 2nd in the volume of published and ongoing research and development projects
- 2nd in the total amount of gross value generated by the creation of different products
- 4th in the concentration of highly technological companies in a country
- 3rd for the density of researchers in place
Three of the companies that placed South Korea in the top spot include:
Both Samsung and LG are in electronics, while Hyundai Motors is in the automotive industry.
The world’s second most innovative country is Singapore. Despite being a tiny country, Singapore’s growth may be explained by its expanding industrial sector and improving productivity. In fact, Singapore ranks:
- 3rd in the total gross value produced by Singaporean products
- 6th in terms of business and economic productivity
- 4th for the number of patented projects produced
Additionally, Singaporeans value education. 91.09% of its citizens have either enrolled or finished tertiary education in 2021.
The three most innovative Singaporean brands include:
- H3 Dynamics, a provider of commercial drones
- Holmusk, a creator of a mobile app that effectively manages chronic diseases, and
- Tuple, a productive analytics business platform
On the third spot on this list is Switzerland— a country that has ranked:
- 3rd for research and development
- 4th in terms of researcher concentration
- 5th for value added by manufacturing
In terms of GDP, Switzerland is among the nations with the largest R&D expenditures. More than two-thirds of Switzerland’s R&D spending comes from the private sector.
Companies in Switzerland that have helped the country achieve this feat include:
ABB is a fortune 500 company in the electrical equipment industry, while Novartis and Roche and both healthcare organizations.
Germany was 2020’s number one most innovative country. However, this time, Germany dropped into the fourth place because Germany is now occupying the following spots:
- 3rd in the highest concentration of high-tech enterprises — a mix of both well-known corporations and a ton of brand-new start-ups
- 7th for R&D intensity
- 6th for gross value added through manufacturing
The three most innovative companies in Germany are:
- Siemens, a technological conglomerate operating in industrial manufacturing, infrastructure, transport, and healthcare
- Volkswagen, a motor vehicle manufacturer, and
- Vimcar, a fleet management platform
The government of Germany also actively encourages research and development in both private institutions and nonprofit organizations, making the country a current world leader in the fields of infrastructure, medical, and military technology.
Internationally, Sweden is named as the fifth most innovative country in the world. This is because it ranks:
- 5th in R&D spending
- 4th for R&D intensity
- 6th for the number of high-tech companies in the country
- 7th for tertiary efficiency and researcher concentration
Sweden’s top innovative organizations include:
- Ikea, a home goods and services giant
- Ericsson, a telecommunications company
- H&M, a clothing and accessories brand with 2,500 stores across the globe
Next to Sweden is Denmark. As the 6th most innovative country worldwide, Denmark comes:
- 2nd for researcher concentration
- 8th in R&D intensity, and
- 8th again, in high-tech density
Denmark’s educational institutions conduct the majority of research work, while most of the country’s funds are spent on the research and development of Sweden’s health services.
This country’s top innovative companies are:
- Good Monday, a provider of digital management systems and other office-related needs
- Nosco HQ, a software and consulting company
- RentSafe, a company that operates in the property discovery intelligence space
Israel may be in the 7th spot in terms of innovative efforts, but Israel is actually the country with the most number of researchers and R&D projects.
It is also a competitive nation in the global R&D arena, with many clients situated in the United States thanks to its enormous pool of expertise in terms of science, technology, engineering, and math.
Plus, Israel is so rich in people with entrepreneurial skills that the country can even compete with Silicon Valley.
The leading innovative firms in Israel include:
- Duality Technologies, an encryption, and analysis company
- Intuition Robotics, a manufacturer of robot companions for the elderly, and
- REE, an organization that specializes in car design housing
While Finland ranks 8th, it is still a prime leader in producing high-tech products and solutions. In fact, the country ranks:
- 7th among 51 of the world’s countries with the highest income economies, and
- 5th in the most powerful and high-earning economies in Europe
Included in Finland’s most innovative companies are:
- Neste, an engineering solutions company specializing in life science, feedstock processing, gas, oil refining, petrochemicals, and renewable & recyclable chemicals
- Outotec, a digital solutions provider, and
- UPM, a manufacturer of safe and sustainable products for everyday use
The Netherlands is a budding tech and innovation country. It ranks:
- 1st in Europe’s largest supplier of high-tech products
- 7th in countries with the most high-tech companies
- 8th in terms of researcher concentration
- 9th in patent activity
Some of the Netherland’s innovative organizations include:
- Blockport, a crypto and blockchain trading
- Ohpen, a fintech institution with cloud-based banking solutions
- Accept Mission, the leading provider of idea and management software for businesses and organizations that aim to increase their number and quality of innovation efforts
Austria completes the list for 2021, coming as:
- 9th in terms of the total added value of manufacturing products
- 9th country with the most R&D projects
The service, mechanical engineering, and organic farming industries are only a few of Austria’s many economic strengths. Some of the country’s most innovative businesses include:
- Affiris, a biotech company that develops vaccines
- Borealis AG, a provider of chemicals and plastics, and
- Infineon, a research-intensive organization
The Value of Investing In Innovation
The process of innovation is how new concepts provide economic and societal benefits. It plays a critical role in providing the productivity and economic advantages that both a company and a country can gain from.
Moreover, it provides a vital path for creating new tools and strategies that address pressing social issues and enhance a person’s quality of life.
Instill innovative values in your company today. Sign up for a 30-day trial in Accept Mission through this link or book a demo here today to learn more.