The global innovation environment is facing a challenging period characterised by significant uncertainty. Data collected for the 2023 World Intellectual Property Organisation (‘WIPO’) Global Innovation Index have shown that while government and top corporate research and development budgets have grown over the past year, venture capital innovation investments have declined, reflecting a worsening climate for risk finance.
Global investment in science and innovation has been impacted over the recent business cycle by widespread high inflation, armed conflict, and supply chain disruption. Despite these impacts on innovation investment, the world economy is projected to continue to grow overall next year, albeit at a slower growth rate, particularly in advanced economies. Significant technological progress in recent years, in particularly in the fields of IT, health, mobility and energy have created new growth opportunities. This includes the wave of innovation built on artificial intelligence, the increased efficiency of green supercomputing and innovations leading to the increasing affordability of renewable energy. While the adoption of new technology is growing, it remains the case that penetration often remains low, and a key challenge remains converting novel innovation into tangible benefits that flow to everyone, everywhere.
Drilling down into individual countries, WIPO has again ranked the UK as an innovation leader on the Global Innovation Index. The UK economy was ranked 4th amongst the 132 economies on its innovation capacities, highlighting its strengths in creative outputs and exports, its well-regarded university sector, and its environmental performance. The UK government has set out a vision of the country as a global hub for innovation, with its Innovation Strategy identifying boosting innovation in the private sector as a key driver of the UK’s future prosperity. Other countries identified by WIPO to watch include China, which following a rapid ascent over the past decade remains the sole middle-income economy within the top 30 of the Index; and Indonesia, which remains an innovation overperformer with strengths in finance for startups and its entrepreneurship policies and culture.
Looking further forward, the Future Laboratory has identified accelerative technologies, the impact of the climate crisis and resource scarcity, evolving population demographics and increasing social and political fragmentation as some of the key drivers transforming the world over the next decade. While global carbon dioxide emissions continue to grow, ambitious targets are emerging, backed by tangible action plans which will have significant impacts on innovative activities in the years to come.
Innovation remains a dynamic force, shaping industries across the globe. Staying on top of these developing trends and strategically integrating them into business models will be crucial for organisations seeking sustained growth and competitiveness.
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