Germany Breaks South Korea’s Six-Year Streak as Most Innovative Nation
LONDON (Bloomberg) - Germany took first place in the 2020 Bloomberg Innovation Index, breaking South Korea’s six-year winning streak, while the U.S. fell one notch to No. 9.
Singapore’s leap into the third-place ranking returns it to its post from two years ago.
The annual Bloomberg Innovation Index, in its eighth year, analyzes dozens of criteria using seven metrics, including research and development spending, manufacturing capability and concentration of high-tech public companies.
The ranking shed light on the ability of economies to innovate, a key theme at the annual World Economic Forum in Davos, Switzerland taking place Jan. 21-24.
In the Bloomberg Index, Germany scored three top-five rankings in value-added manufacturing, high-tech density, and patent activity. South Korea lost its crown in part due to a relative slump in productivity, falling to No. 29 from last year’s No. 18 ranking in that category.
"The manufacturing sector is still highly competitive and a source for innovation,” Carsten Brzeski, chief economist at ING Germany, said in an email. "Germany’s performance in such indicators is still strong and much better than the recent economic weakness would suggest.”
Still, Brzeski cited several reasons why Germany shouldn’t be complacent about its innovation standing. Its services innovation is much less impressive, and about a third of research and development spending is in the auto industry, meaning "disruption and longer weakness of this sector could weigh on Germany’s innovative strength,” he said.
Germany’s status as a manufacturing giant has been built on the car-making industry, but pollution concerns, trade conflicts and slowing economies have weighed on demand.
Lack of innovation around tertiary education in Germany is an "increasing worry,” Brzeski added, especially as the global economy shifts more toward services and away from manufacturing. "The German government would be well advised to use the ongoing fiscal surplus to invest and safeguard Germany’s role as innovator.”
South Korea’s narrow loss is hardly a reason to anticipate a crumbling in its innovative prowess. R&D spending "determines life or death for South Korean companies,” with tech-oriented heavyweights like Samsung Electronics Co., LG Electronics Inc., and Hyundai Motor Co. leading the economy, said Chang Suk-Gwon, a business management professor at Seoul’s Hanyang University.
Singapore’s leap into the third-place ranking returns it to its post from two years ago.
The annual Bloomberg Innovation Index, in its eighth year, analyzes dozens of criteria using seven metrics, including research and development spending, manufacturing capability and concentration of high-tech public companies.
The ranking shed light on the ability of economies to innovate, a key theme at the annual World Economic Forum in Davos, Switzerland taking place Jan. 21-24.
In the Bloomberg Index, Germany scored three top-five rankings in value-added manufacturing, high-tech density, and patent activity. South Korea lost its crown in part due to a relative slump in productivity, falling to No. 29 from last year’s No. 18 ranking in that category.
"The manufacturing sector is still highly competitive and a source for innovation,” Carsten Brzeski, chief economist at ING Germany, said in an email. "Germany’s performance in such indicators is still strong and much better than the recent economic weakness would suggest.”
Still, Brzeski cited several reasons why Germany shouldn’t be complacent about its innovation standing. Its services innovation is much less impressive, and about a third of research and development spending is in the auto industry, meaning "disruption and longer weakness of this sector could weigh on Germany’s innovative strength,” he said.
Germany’s status as a manufacturing giant has been built on the car-making industry, but pollution concerns, trade conflicts and slowing economies have weighed on demand.
Lack of innovation around tertiary education in Germany is an "increasing worry,” Brzeski added, especially as the global economy shifts more toward services and away from manufacturing. "The German government would be well advised to use the ongoing fiscal surplus to invest and safeguard Germany’s role as innovator.”
South Korea’s narrow loss is hardly a reason to anticipate a crumbling in its innovative prowess. R&D spending "determines life or death for South Korean companies,” with tech-oriented heavyweights like Samsung Electronics Co., LG Electronics Inc., and Hyundai Motor Co. leading the economy, said Chang Suk-Gwon, a business management professor at Seoul’s Hanyang University.