Malaysia performs above average in global innovation index

The Global Innovation Index 2021, published annually by the World Intellectual Property Organization (Wipo), was released on 20 September.

This year, Wipo, a specialised UN agency, tracked innovation during the Covid pandemic.

Top 10 most innovative countries

1. Switzerland
2. Sweden
3. United States
4. United Kingdom
5. South Korea
6. Netherlands
7. Finland
8. Singapore
9. Denmark
10. Germany

Switzerland, in top spot, is perceived as one of the most innovative biotech hubs in the world. Local companies hold leading positions throughout many sectors and attract capital, partnerships and talents. The key to success is to design networks driven by renowned universities and highly specialised companies and start-ups.

Sweden retained second place in the index, just behind Switzerland but ahead of the US. The country has been among the top three most innovative countries in the world for more than a decade. 

Korea jumped from 10^th to fifth place, only one rung below the UK.

Finland and Denmark were the other Nordic countries in the top 10, ranked seventh and ninth respectively. Tiny Iceland was ranked 17th while Norway came in at 20th.

France (11th) and China (12th) continue to make progress, with both now just outside the top 10

The latest Global Innovation Index report ranked 132 countries based on 81 different indicators. It also looked at the effects of the pandemic on innovation.

Malaysia was placed 36^th – a drop of three places from 2020. But it still took third place among 34 upper middle-income group economies.

Malaysia also ranks 8th among the 17 economies in Southeast Asia, East Asia and Oceania. Compared with other economies in these three regions, Malaysia performed above average in all seven of the pillars of the index: institutions, human capital and research, infrastructure, market sophistication, business sophistication, knowledge and technology output, and creative output.

But Malaysia also had to confront the challenge of brain drain with some of its brightest citizens seeking more rewarding careers abroad. Many political, social and historical reasons are responsible for this brain drain. Obviously, losing talent to other countries translates into billions of dollars in losses, especially in economic growth and investment.

If this gap is closed, Malaysia could hasten its rise to the high-income category and score higher in the innovation rankings in coming years.

Among Asean countries, only Singapore in 8^th place was ahead of Malaysia. Singapore has been among the top 10 most innovative economies consistently for the past 14 years. Thailand came in at no. 43, Vietnam 44, Indonesia 87, Cambodia 109, Laos 117 and Myanmar 127.  

Singapore ranked first for innovation input and clinched top spot for two new indicators relating to capital raising and financing “venture capital investors” and “venture capital recipients”. It was ranked second in the Asia-Pacific, losing its top spot to South Korea after holding on to the ranking for seven consecutive years.

India moved up two spots to 46th, maintaining its steady rise over the last few years from 81st in 2015.

Measuring an economy’s inventive ability and productivity is important for planners and decision-makers in the public sector and business to come up with polices to spur innovative capability and enhance efficiency.

Every year, the Global Innovation Index considers global innovation trends and the innovation ecosystem of economies. It also highlights strong points and flaws in innovation, particularly gaps in the innovation system of measurement.

The index hopes to encapsulate a holistic representation of innovation, as it covers 80 pointers, including a country’s political environment, education level, infrastructure and the state of knowledge creation of each economy.

As innovation is a key driver of economic development, the index aims to provide an innovation ranking and analysis of the economies surveyed.

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