25 Most Innovative Economies in 2024: Why WIPO Rankings Are Inaccurate

Published on January 31, 2024 at 3:35 pm by Meerub Anjum in Business, Economy, Industries, Lists, News

In this article, we will look into the 25 most innovative economies in 2024. If you want to skip our detailed analysis, you can go directly to 5 Most Innovative Economies in 2024: Why WIPO Rankings Are Inaccurate.

Various researchers have defined innovation as an indicator of national competitiveness. While others linked it to the economic growth of a country. However, many factors contribute to a country’s innovation, including its research and development and ability to adopt technologies and produce market-competitive products and services.

Why WIPO Rankings Are Inaccurate

The Global Innovation Index is considered a significant tool for identifying the most innovative country, by utilizing a variety of indicators. While GII might be an established index to provide a holistic view of innovation in a country, some of its indicators, such as institutions and other governance and infrastructure indicators, do not have a direct impact on innovation, compared to prominent indicators such as R&D or innovative technology product exports. This is what makes the WIPO ranking inaccurate as it equally weights all the factors to compute a final innovation index, instead of prioritizing factors that directly impact the scientific and technological innovations in a country.

The GII ranks Switzerland as the most innovative country in the world. While Switzerland has made significant progress in science and technology in the past years, the United States is undoubtedly the most innovative economy in the world. As of 2023, the US boasts a GDP of $26.95 trillion and is a leader in science and technology. More than 75% of the most innovative companies in the world are based in the US. The country is home to some of the top universities and research institutes including MIT, Harvard, and Stanford University, among others. The United States also stands as a global leader in sectors including health, finance, and energy, among others. The US is tentatively the biggest research and development spender in the world. It spent a total of $789 billion in R&D in 2021, up $72 billion from 2020. On the other hand, Switzerland reported a total spending of only $35 billion in 2022. These factors combined, position the United States as the most innovative country in the world.

Companies Contributing to the Innovation in the US

Companies including Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG) are ruling the US market with their continued innovation and scientific breakthroughs.

Wall Street is bullish on Amazon.com, Inc. (NASDAQ:AMZN). On January 22, Benchmark analyst Daniel Kurnos raised his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $175 from $170 and reiterated a buy rating. Over the past 3 months, Amazon.com, Inc. (NASDAQ:AMZN) has received 37 buy ratings from analysts. The stock has an average price target of $187.40 and a high price target of $220. As of January 31, the stock has surged more than 50% over the past 12 months.

Here are some of the comments from Amazon.com, Inc.’s (NASDAQ:AMZN) Q3 2023 earnings call:

“During the quarter, we hosted Amazon Accelerate, our annual seller conference, where we launched a number of new innovations and product developments for our sellers, including Supply Chain by Amazon. We also continue to see durable growth in advertising which grew 25% year-over-year, excluding foreign exchange, primarily driven by sponsored products as we lean into machine learning to improve the relevancy of the ads we show our customers and enhance our measurement capabilities on behalf of advertisers. We have seen strong improvement in our profitability. North America operating income was $4.3 billion, an increase of $4.7 billion year-over-year, resulting in an operating margin of 4.9%, up 100 basis points quarter-over-quarter. Since North America operating margins bottomed out in Q1 of 2022, we have now seen 6 consecutive quarters of improvement, resulting in a cumulative improvement of over 700 basis points over these past 6 quarters.”

Meta Platforms, Inc. (NASDAQ:META) is a powerhouse of innovation with its top-notch AI-integrated tools. The company promotes the integration of AI in business processes and daily life to accelerate innovation. On September 27, 2023, the company announced several AI-assisted features across its devices and applications, including AI stickers and editing tools and a conversational AI assistant called Meta AI. Moreover, Meta Platforms, Inc. (NASDAQ:META) is set to launch AI characters and AI studios and creation tools in 2024.

On January 23, Alphabet Inc. (NASDAQ:GOOG) launched Chrome M121 along with experimental generative AI features. The new features will allow efficient browsing and personalized experience for users. The new generative AI features will be available in Chrome on Macs and Windows PCs soon, starting first in the US. The users can navigate to the experimental AI page by going to the settings option in their Chrome account.

With this context, let’s look at the 25 most innovative economies in 2024.

20 Most Competitive Economies In The World

Methodology

For our article, we defined an innovative country as one that invests highly in research and development and integrates digital technology into its economy. To rank the 25 most innovative economies in 2024, we employed three metrics including R&D Expenditure, High Technology Exports in US$, and Digital Adoption Index (DAI). High technology exports showcase a country’s ability to transform its R&D into commercial products and services competing globally. This provided us with a solid framework to identify and rank the most innovative economies in 2024.

Firstly, we sorted the countries based on R&D expenditure and collated a list of 40 countries. Then, we sourced DAI and high-technology exports data of the countries. Then, we assigned ranks to our countries based on each metric, with 1 representing the most innovative country. Finally, we assigned weights to each of our metrics as 40% to R&D Expenditure, 40% to High Technology Exports, and 20% to DAI and computed a weighted average of each country’s rank across these metrics to calculate their final score as ‘Insider Monkey Score’. Our list ranks the countries in descending order of the calculated score.

Our list does not include Israel due to the current geopolitical situation in the country. Israel’s war on Gaza has caused major economic losses in the country disrupting businesses, which makes it challenging to assess its innovation. Hence, we have only included countries that demonstrate resilience and adaptability to foster innovation amidst global political challenges.

By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

25 Most Innovative Economies in 2024

25. Thailand

R&D Expenditure (2021): 1.33%

High Technology Exports (2020): $45.8 billion

Digital Adoption Index (2016): 0.619

Insider Monkey Score: 7.9

Thailand ranks among the most innovative economies in 2024. The country spent 1.3% of its GDP on research and development in 2021. The country reported high technology exports of $45.8 billion in 2021.

24. Poland

R&D Expenditure (2021): 1.44%

High Technology Exports (2021): $23.8 billion

Digital Adoption Index (2016): 0.690

Insider Monkey Score: 7.8

Poland is placed 24th on our list. The country reported a DAI of 0.690 in 2016, according to the World Bank. In 2021, the country spent 1.44% of its GDP on R&D. The high technology exports of the country were $23.8 billion in 2021.

23. United Arab Emirates

R&D Expenditure (2021): 1.49%

High Technology Exports (2021): $2.9 billion

Digital Adoption Index (2016): 0.822

Insider Monkey Score: 7.6

Ranked 23rd on our list, the UAE reported a DAI of 0.822 in 2016. In 2021, the country spent 1.49% of its GDP on R&D. The high technology exports of the country were $2.9 billion in 2021.

22. Portugal

R&D Expenditure (2021): 1.68%

High Technology Exports (2021): $3.5 billion

Digital Adoption Index (2016): 0.785

Insider Monkey Score: 7.5

Portugal is placed 22nd on our list. The country reported a DAI of 0.785 in 2016, according to the World Bank. In 2021, the country spent 1.68% of its GDP on research and development. The high technology exports of the country were $3.5 billion in 2021.

21. Hungary

R&D Expenditure as a Percentage of GDP (2021): 1.64%

High Technology Exports (2021): $19.7 billion

Digital Adoption Index (2016): 0.690

Insider Monkey Score: 7.5

Hungary ranks among the most innovative economies in 2024. The country reported an R&D spending of 1.64% in 2021. The high technology exports of the country were reported to be $19.7 billion in 2021.

20. Spain

R&D Expenditure as a Percentage of GDP (2021): 1.43%

High Technology Exports (2021): $23.5 billion

Digital Adoption Index (2016): 0.754

Insider Monkey Score: 7.3

Spain is one of the most innovative countries in the world. It spent 1.43% of its GDP on research and development in 2021. The country reported high technology exports of $23.5 billion in 2021.

19. Estonia

R&D Expenditure as a Percentage of GDP (2021): 1.75%

High Technology Exports (2021): $2.68 billion

Digital Adoption Index (2016): 0.833

Insider Monkey Score: 7.1

Estonia is placed 19th on our list. The country reported a DAI of 0.833 in 2016. In 2021, the country spent 1.75% of its GDP on R&D. The high technology exports of the country were $2.68 billion in 2021.

18. Norway

R&D Expenditure as a Percentage of GDP (2021): 1.94%

High Technology Exports (2021): $4.75 billion

Digital Adoption Index (2016): 0.804

Insider Monkey Score: 6.8

Norway is one of the most innovative countries. It reported an R&D expenditure of 1.94% in 2021. The high technology exports of the country were reported to be $4.75 billion in 2021.

17. Canada

R&D Expenditure as a Percentage of GDP (2021): 1.69%

High Technology Exports (2021): $29.1 billion

Digital Adoption Index (2016): 0.691

Insider Monkey Score: 6.6

Canada is placed 17th on our list. The country reported a DAI of 0.691 in 2016. In 2021, it reported an R&D expenditure of 1.69%. The country reported high technology exports of $29.1 billion in 2021.

16. Italy

R&D Expenditure as a Percentage of GDP (2021): 1.45%

High Technology Exports (2021): $38.9 billion

Digital Adoption Index (2016): 0.765

Insider Monkey Score: 6.5

Italy is one of the most innovative countries in the world. It spent 1.45% of its GDP on research and development in 2021. The high technology exports of the country were reported to be $38.9 billion in 2021.

15. Czechia

R&D Expenditure as a Percentage of GDP (2021): 1.99%

High Technology Exports (2021): $41.3 billion

Digital Adoption Index (2016): 0.723

Insider Monkey Score: 5.6

Czechia ranks among the most innovative economies in 2024. The country spent 1.99% of its GDP on R&D in 2021. The high technology exports of the country were reported to be $41.3 billion in 2021.

14. Finland

R&D Expenditure as a Percentage of GDP (2021): 2.98%

High Technology Exports (2021): $5.49 billion

Digital Adoption Index (2016): 0.806

Insider Monkey Score: 5.4

Ranked 14th on our list, Finland reported a DAI of 0.806 in 2016. In 2021, the country spent 2.98% of its GDP on R&D. The high technology exports of the country were $5.49 billion in 2021.

13. Denmark

R&D Expenditure as a Percentage of GDP (2021): 2.81%

High Technology Exports (2021): $12.4 billion

Digital Adoption Index (2016): 0.791

Insider Monkey Score: 5.3

Denmark is placed 13th on our list. The country reported a DAI of 0.791 in 2016, according to the World Bank. In 2021, the country spent 2.81% of its GDP on R&D. The high technology exports of the country were $12.4 billion in 2021.

12. China

R&D Expenditure as a Percentage of GDP (2021): 2.43%

High Technology Exports (2021): $942 billion

Digital Adoption Index (2016): 0.586

Insider Monkey Score: 4.5

Ranked 12th on our list, China reported a DAI of 0.586 in 2016. In 2021, the country spent 2.43% of its GDP on R&D. The high technology exports of the country were $942 billion in 2021.

11. France

R&D Expenditure as a Percentage of GDP (2021): 2.29%

High Technology Exports (2021): $97.5 billion

Digital Adoption Index (2016): 0.753

Insider Monkey Score: 4.4

France is one of the most innovative countries in the world. It spent 2.29% of its GDP on research and development in 2021. The high technology exports of the country were reported to be $97.5 billion in 2021.

10. Sweden

R&D Expenditure as a Percentage of GDP (2021): 3.42%

High Technology Exports (2021): $19.0 billion

Digital Adoption Index (2016): 0.831

Insider Monkey Score: 3.9

Sweden is ranked among the most innovative economies in 2024. The country spent 3.42% of its GDP on research and development in 2021. The country reported high technology exports of $19 billion in 2021.

9. United Kingdom

R&D Expenditure as a Percentage of GDP (2021): 2.91%

High Technology Exports (2021): $66.7 billion

Digital Adoption Index (2016): 0.764

Insider Monkey Score: 3.8

Ranked 9th on our list, the UK reported a DAI of 0.764 in 2016. In 2021, the country spent 3.36% of its GDP on R&D. The high technology exports of the country were $38.2 billion in 2021.

8. Austria

R&D Expenditure as a Percentage of GDP (2021): 3.25%

High Technology Exports (2021): $31.3 billion

Digital Adoption Index (2016): 0.862

Insider Monkey Score: 3.6

Austria is placed 8th on our list. The country reported a DAI of 0.862 in 2016, according to the World Bank. In 2021, the country spent 3.25% of its GDP on research and development. The high technology exports of the country were $31.3 billion in 2021.

7. Switzerland

R&D Expenditure as a Percentage of GDP (2021): 3.36%

High Technology Exports (2021): $38.2 billion

Digital Adoption Index (2016): 0.822

Insider Monkey Score: 3.3

Ranked 7th on our list, Switzerland reported a DAI of 0.822 in 2016. In 2021, the country reported an R&D spending of 3.36%. The high technology exports of the country were $38.2 billion in 2021.

6. Netherlands

R&D Expenditure as a Percentage of GDP (2021): 2.30%

High Technology Exports (2021): $100.1 billion

Digital Adoption Index (2016): 0.838

Insider Monkey Score: 3.1

The Netherlands ranks 6th among the most innovative economies in 2024. The country spent 2.30% of its GDP on research and development in 2021. The high technology exports of the country were reported to be $100.1 billion in 2021.

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