South Korea continues to thrive in the technology race, while US drifts away.
For the first time in six years, the US left the top 10 in the 2018 Bloomberg Innovation Index, falling to the 11th place from its previous 9th. On the other hand, South Korean and Sweden remained their No. 1 and No. 2 spots.
The countries acquired index scores using seven criteria, including spendings in research and development, the attention of technology companies.
The US rank dropped, mainly because of falling scores in a couple of categories, including post-secondary or tertiary, and education-efficiency, which covers the contribution of new science and the number of engineering graduates. The sum of highly valuable manufacturing also took a downward steep. Although there’s an improvement in the productivity score, it wasn’t enough to make up for what’s lost.
“I see no evidence to suggest that this trend will not continue,” Robert D. Atkinson, president of the Information Technology & Innovation Foundation in Washington, D.C., said.
“Other nations have responded with smart, well-funded innovation policies like better R&D tax incentives, more government funding for research, more funding for technology commercialization initiatives.”
Singapore, on the other hand, successfully landed to a higher, third place rank due to tertiary-efficiency category, leaving European economies behind like Germany, Switzerland and Finland.
According to Yeo Kiat Seng, professor and associate provost at the Singapore University of Technology and Design, when talking about science, technology, engineering and mathematics, “Singapore has always placed strong focus on educating her populace, especially in STEM disciplines.” Furthermore, the country has a “steadfast commitment to funding R&D and innovation,” added Yeo, who has 38 patents.
For five consecutive years, South Korea has been the gold-medalist of global-innovations. Samsung Electronics Co., has acquired more US patents in 2000 than any firms, except for International Business Machines Corp., which made them the most-valued tech company of the country. The ecosystem of Korea’s suppliers and partners consists mostly of semiconductors, digital media and smartphones. A very similar sight with Japan when the nation developed innovations around Sony Corp. and Toyota Motor Corp.
China continue to move upward, recently to two positions higher, landing the 19th place. The nation’s high amount of new technology, engineering graduates, and increasing patents by innovators like Huawei Technologies Co., all added to its strengths and index score.
“One common trait of the U.S., Korea and China is that people accept failure as part of the process,” according to Prinn Panitchpakdi, country head of CLSA Thailand, an Asian brokerage and investment group. “Innovation lags in countries where the culture emphasizes risk avoidance and where R&D is seen purely an expense, not an investment. That’s the mindset in Thailand.”
Countries in the lead
One of the top Asian countries, Japan, moved one slot upward to no. 6. France jumped from 9th to 11th place, enlisting with other European economies in the top tier. Israel was the only nation that has beaten South Korea in the R&D category, also reached the top 10 list.
Joining back the top 50 list were Iran and South Africa, which the last time they were included was in 2014. One of the biggest winners of this year was Turkey, which leaped four ranks to 33rd due to advancements in categories, tertiary efficiency, productivity, and two other.
On the other hand, the biggest losers, New Zealand and Ukraine fell four places lower because of the changes in productivities (New Zealand), and tertiary-efficiency (Ukraine).
Compared to last year, shifts in the list this year weren’t too dramatic. In 2017, we saw Russia fell 14-spots, while Ukraine received sanctions, and energy prices plunged.
This year’s ranking method began with 200 economies. All economies had 0-10 scale scoring in seven equal categories. Countries that didn’t pass the requirements for at least 6 categories were eliminated, cutting down the list to 80. The top 50 economies with their category scores is released by Bloomberg.