European countries make up more than 50pc of the world’s 10 most innovative economies.
The Bloomberg Innovation Index for 2018 has been released, and it shows a strong outlook for a lot of European economies.
In terms of the first- and second-place titles, South Korea and Sweden have respectively held on to their spots, while Singapore made an entry at number three, up three places from 2017’s table.
The remainder of the top 10 includes Germany, Switzerland, Japan, Finland, Denmark, France and Israel.
The economies were evaluated under seven different criteria to come up with the definitive scores: R&D intensity, manufacturing value added, tertiary efficiency, the concentration of researchers, patent activity, high-tech density and productivity.
Ireland makes progress
Ireland made great strides this year, climbing three spots to number 13, getting ever closer to a coveted top 10 spot. The UK didn’t fare as well, remaining in 17th place as it was in 2017.
Some of Ireland’s highest-scoring areas were R&D intensity, tertiary efficiency (total enrolment in third-level education) and patent activity.
Justin Arnesen, director of R&D, tax and grants at business consulting group Ayming, said he was surprised the UK was able to retain its position at all. “Although there is plenty of encouraging talk coming from the government about creating a culture of innovation and increasing R&D expenditure, we aren’t seeing this in practice.
“HMRC [Her Majesty’s Revenue and Customs] are acting sluggishly when it comes to approving R&D tax credits. We know of applications in the market which have taken three or four years to gain approval; things need to be done quicker and businesses need more consistency.
“Why would large firms invest here when the likes of Singapore will welcome them with open arms?”
US slips out of top 10
For the first time in the six years of the index’s existence, the US is absent from the top 10 countries, falling to number 11 behind Israel and ahead of Austria.
Slumps in the tertiary efficiency and value-added manufacturing categories are to blame for the drop.
Robert D Atkinson, president of the Information Technology and Innovation Foundation in Washington DC, told Bloomberg that the trend could be likely to continue in the US. “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 commercialisation initiatives.”