Sweden and South Korea tied for first place as the 2018 most innovative countries in the world according to Bloomberg's Innovation Index 2018. The World Economic Forum, on the other hand, ranks the U.S. second to Switzerland only, and Sweden remains in the top ten, while South Korea is strangely absent all together. What does this mean considering South Korea and the U.S. are the countries that top the list as having companies with the most patent filings in 2017?
Regarding South Korea, rumor has it that Samsung is what keeps South Korea in its glory, with this innovation mindset trickling down through the economy to other companies. Samsung is second only to IBM in awarded U.S. patents since the start of the 2000s. Sweden's forte appears to be in tech start ups rather than tech giants, gaining a reputation as Europe's tech start-up capital. In fact, Sweden is home to some of Europe's largest tech companies, and its capital is second only to Silicon Valley when it comes to the number of billion-dollar tech companies that it produces per capita.
The population in Sweden is estimated to be more than 9.9 million people, while the population in South Korea is estimated to be a little more than 51 million people. The U.S. has more than 326 million people but is not vying for pole position. Where is the disconnect?
Bloomberg cites lower U.S. rankings as being related to tertiary (higher college/university) education. The US is now ranked 43 out of 50 nations for “tertiary efficiency”. In fact, the World Forum ranked Oxford and Cambridge Universities in the United Kingdom as being the top two universities in the world as of September 2017. Another factor that Bloomberg says weighs heavily against the U.S. is its lack of value-added manufacturing while apparently South Korea and Singapore lead the pack.
The U.S. is still ranked in first place when it comes to density of tech companies and second in patent activity...second to South Korea. Even Israel is ranked both in Bloomberg's and the World Economic Forum's top ten, but Israel has about 4000 start ups, and raises venture capital per capita at two-and-a-half times the rate of the U.S. and 30 times that of Europe.
When it comes to being a world leader at innovation, it may simply be the case that you get out what you put in: according to OECD figures, Israel spends more money on research and development as a proportion of its economy than any other country – 4.3% of GDP against second-placed South Korea's 4.2%. Switzerland is in third place spending 3.4% of its GDP on R&D, while Sweden spends 3.3%. The US spends just 2.8%.
Perhaps by making higher education more accessible and financially possible, encouraging young Americans to strive for higher education, and implementing more accessible and widespread programs in innovation, intellectual property basics and procedure, more people would risk the road less travelled for the rewards that innovation can bring.
We can all do our part. The attorneys at Flener IP & Business Law strive to volunteer, educate and mentor. Contact us to see where our next appearance/event will be.