WIPO press conference: Who will finance innovation

So we're here to launch the 2020 edition of the Global Innovation Index.

Director General Gurry will make some opening remarks.

We also have on the on the call our Co Co editors Bruno Larva from Assayad and Professor Sumitra Dutta from Cornell University.

So I'll just change seats because of the technical issue we're having with the Director General and you guys, we can get started.

[Other language spoken]

Thank you very much, Sama.

[Other language spoken]

And for those of you who are still there, I really thank you for your patience.

I'm sorry about this technical issue that we had.

It's a great pleasure for me to release the 2020 edition of the Global Innovation Index.

And of course, it's under embargo for the moment, for 24 hours if I'm not mistaken.

And it represents of course, the ranking innovation rankings and it's evaluation of innovation performance of capacity across 131 economies.

Why do we do this very briefly?

Well, of course innovation is one of the principal sources, if not the principal source of economic growth and development.

So it's an extremely important phenomenon and recognised as such by enterprises throughout the world and by countries throughout the world.

And the idea with the Global Innovation Index is that we contribute to the measurement of innovation.

And in particular, we think there are three main effects that the Global Innovation Index has in providing data on innovation.

And there, first of all, the provides countries with a yardstick to measure their relative performance against other countries.

Secondly, it allows them to evaluate their own innovation strengths and weaknesses across a range of wide range of indicators and components that constitute the index.

And finally, it gives a strong impetus to countries to collect better data and to have better metrics on innovation and innovation performance.

And that's extremely important.

And we've seen this with a number of countries that have made a considerable effort in order to improve the availability of data around innovation as a phenomenon.

This, of course, helps policy makers in developing and assessing their innovation policies.

So now let me turn to the 2020 index and the results in terms of ranking.

First of all, well, number one in the 2020 Global Innovation Index ranking is once again Switzerland.

I think it's the ninth time consecutive time that Switzerland has come out on top of the GII ranking, followed this year by Sweden, then the United States of America, the United Kingdom and Netherlands.

So they constitute the first five.

Now the top economies in the ranking of the GII are once again developed countries.

The exception to that is China.

China has for the second year now in a row come in at #14 in the GII ranking, and it's the only middle income in the top 30 countries in the ranking of the GII.

We do see this year the continuation of the shift towards Asia for the first time, the second Asia Asian economy.

The Republic of Korea has joined Singapore in the top ten countries in the ranking of the GII.

We see also that over time now, over the period of the life of the Global Innovation Index, China, Vietnam, India and the Philippines are the economies that have seen the most significant progress in their rankings and each of them has improved very, very considerably this year.

Both India at #48 and the Philippines at #50 have moved into the top 50 for the very first time.

And so that's a very significant improvement that we are seeing in the case of developing countries more generally.

Well, as I say, the ranking with the exception of China in particular at #14 and the others that I've mentioned, they may not be in the upper ranks of the of the global list.

However, we do see this phenomenon of many developing countries outperforming in innovation, their level of development.

And in 2020, there are 25 economies that outperform their peers.

Countries such as India, Kenya and Vietnam hold the record for being innovation outperformers for 10 consecutive years.

And of the 25 identified as outperformers, 8 are from sub-Saharan Africa.

So the efficiency of innovation in terms of the conversion of inputs into outputs is extremely strong in those economies with Kenya and Rwanda topping the list.

Finally, one of the things that we've introduced in recent years, as you know, in addition to the ranking innovation on the Global Innovation Index is a ranking of the top 100 science and technology clusters in the world.

Again, Tokyo Yokohama comes out as the top performing cluster, followed by in 2nd place the cluster of Shenzhen, Hong, Hong Kong and Guangzhou, 3rd place Seoul, 4th place Beijing and 5th place San Jose, San Francisco.

It's interesting.

the US continues to host the largest number of clusters, 25 in the top 100, followed by China with 17, and then you go to Germany with 10 and Japan with five.

Now, if you add together the clusters in the top 100 of the United States and China, you get 42, so 42%.

The top 100 science and technology clusters in the world are located in the United States of America first, followed by China 2nd and then 10 to Germany.

So it's quite a significant gap that we do see there.

Now let me turn to the particular theme of the GII in 2020.

This year it's the financing of innovation, who finances innovation.

And it's particularly appropriate that we have this theme this year since we are all suffering, of course, the multiplicity of consequences and the multiple dimensions of the COVID-19 pandemic.

And one of those dimensions, of course, is the economic dimension.

And when we look back, we see that prior to the COVID-19 pandemic hitting, innovation and IP were flourishing.

We saw in 2018, for example, that global research and development rose, expenditure rose by 5 to 5.2%, which far outperformed global, the increase in global GDP and the same with all the statistics with which we're familiar in the field of intellectual property.

So it hit at a time when really innovation was at its peak in a certain sense.

But now I think the we think that the great risk, of course, is that innovation expenditures and the means to finance innovation will spiral downwards as the global economy grinds to something of a halt.

According to the data that we've assembled in the Global Innovation Index for 2020, we see that money to fund innovation is drying up around the world and the impact of that is uneven.

The impact is likely to hit in the most negative manner, start up enterprises that are just commencing young firms that is or set up enterprises that have rather long term R&D, which is often the case in the life sciences, rather long term R&D plans.

They are going to be hit and start-ups in developing countries already to a certain extent starved for funds or the availability of risk and venture capital and they will be hit as well.

So this is not a very good scene at all.

So we are calling in the GII in 2020 on business leaders and political leaders and policy makers around the world to sustain innovation throughout this.

It's exceptionally important.

Of course, we know it's important within the health field and that is what's going to take us out of the crisis principally.

But even beyond the health field, once the pandemic, the global pandemic is brought under control, we hope that government innovation expenditure is sustained or increased in order to give the economy the impetus for economic growth and development that is absolutely needed.

There are, of course, some opportunities that are coming out of the crisis.

And we see that, of course, in certain areas because of the virtualization of economic activity and the virtualization of social contact that we're seeing as a consequence of the necessary measures taken for confinement and lockdown around the world in relation to the pandemic.

There are certain areas where innovation has performed quite well, For example, health, huge emphasis obviously, but teleworking also education, e-commerce and mobility.

So another one is international research collaboration, which we're seeing is is performing particularly well.

So now let me just before turning over to everyone and questions, let me thank a few people.

First of all, I'd like to thank our Co publishers, Cornell University and Inseed.

We're very grateful to them and in particular to Professor Sumitra Duter and Bruno Lauvan from Cornell and Inseed respectively 2 of the co-authors.

The third co-author is the author is my colleague Sasha Vuns Vincent, whom I should like to thank as well and of course Cast and Fink, our Chief economist under his supervision.

This was all put together.

I should also like to thank our knowledge partners.

So there we have as a long standing knowledge partner the Confederation of Indian Industry.

Many thanks to you.

We have in addition DASSO System and the National Confederation of Industry of Brazil, another long standing partner.

Again, thanks to you all and we would welcome a discussion.

Oh yeah, we can open the floor now for your questions.

If you could just raise your hand, Laurent from from ATS, please go ahead.

[Other language spoken]

Very well.

[Other language spoken]

Thank you for the the briefing.

Can we already measure since the beginning of the year the decline that might have occurred in terms of R&D investments?

I assume it's hard, still hard to have a, a consolidated figure, but do we have a, a broad idea to measure the, the, the, the decline?

[Other language spoken]

So we missed that.

The question was do we have a broad ID in, in terms of figures how the the investment in in R&D might have declined since the beginning of the year because of the pandemic?

[Other language spoken]

I don't have that figure.

I'm going to invite my colleague Carson Fink and and any of the co-authors to intervene here.

But usually as you know, the figures on R&D expenditure lag a bit behind.

They're not in real time.

So we don't, you know the collection takes place for this year really at the end of the year.

And I don't have any indication, I mean Carsten, perhaps you may, may wish to intervene on that one.

[Other language spoken]

You have to put up your hand.

[Other language spoken]

I, I don't have much to add.

It's indeed the case that we don't yet have any comprehensive figures on research and development expenditure, which indeed are only collected with a with a significant delay.

As the Director General mentioned, the preliminary figures we have on financing of innovations certainly raise some concern that innovation finance is drying up.

But it is also a mixed picture.

As you know, some companies, some tech companies in this crisis are actually doing, doing quite well, as you for example, see in the stock market valuation of certain players, whereas others and especially smaller companies are much more likely to be adversely affected.

So I think when we will eventually tell the story of how this crisis has affected innovation investments, it will be very much, I think a negative picture, but it will also be a mixed picture.

But I think that's all we can say for now.

[Other language spoken]

Thank you very much for taking my question.

So I guess along the same lines, I'm just wondering if you see in, in the indications you're seeing already about how the pandemic is, has is affecting R&D, which countries do you see coming out as, as the winners on this?

And do you think it could speed up this move that you're seeing towards towards Asia?

[Other language spoken]

So look, it's a shot in the dark really and I'm sorry about that.

You know which we had better information data available right now because you know, in a historical sense we have to remember that we're still relatively early in the pandemic with with what the month of September now.

But and really globally the main impact hit I suppose about February, March.

So it's still relatively early.

We're seeing of course the impact in the quarterly, in particular the quarterly GDP movements of various countries as that's being published.

But the individual components and research and development expenditure in particular, it's rather difficult to say.

Carson has alluded to that the the circumstances which we're all experiencing are favouring certain industries.

We're seeing the some of the big tech companies doing exceptionally well.

So I really can't say answer your question except to make a wild guess, you know, and a wild guess really would be that yes, we've seen certain persistent trends that have occurred over the course of the last five to 10 years.

One of those has been the one that you mentioned Nina of this shift demographically, economically, technologically towards Asia in the axis.

And and then we could say that if we look at the pandemic impact as a whole, one of the things that I think seems to be happening and we're really in in a situation of imperfect knowledge.

Of course, one of the things that seems to be happening is an acceleration of trends that were pre-existing.

They're not caused by the pandemic, they were already there, but they're accelerated or intensified by the pandemic.

For example, the virtualisation of economic activity.

That's one clear trend that we're seeing intensified.

So it may be that the trend to Asia as a major poll of, amongst other things, innovation and technology and science will be intensified by this.

That of course, will depend on the impact that this is this pandemic is having and will have in Asian countries.

And there you're better informed than I am.

But we see that, well, certain of the Asian countries, with the exception of India, have managed to keep the numbers, relatively speaking, relative to population low.

Nobody wants to be certain about anything in this world.

And of course, India is suffering terribly at the moment.

And we see it reflected in not only in the health statistics but also in the economic statistics.

So kind of a Long story short, you know I would dare to make.

The very hesitant prediction that one of the trends that may be accelerated by the pandemic is indeed the movement towards Asia.

But it will all depend on what happens in the coming months and the evolution of this pandemic.

And and as I said, we're I'm not an expert on this and and one would have to be extremely courageous to make predictions that are not heavily qualified.

[Other language spoken]

So I'm sorry, Peter, we can't seem to hear you any more questions, OK.

[Other language spoken]

Sorry.

[Other language spoken]

What studio?

[Other language spoken]

If there are no other questions, let me just take the opportunity to say that we are broadcasting from our new studio.

So Johnny, our operator will give you a brief tour of this and we're very pleased with it.

And I hope that this increases our interaction and capacity for interaction with of course the whole world, but in particular with the press.

So, Johnny, are you going to give us a little tour of with the?

All right, OK, good.

Well, look, thanks to everyone.

Samar, do you want to sign off?

Thanks to everyone for coming and we will all stay in touch of course.

Thank you very much.

Please just remember that the press conference was under embargo.

And if you have any follow up questions to any of us, the co-authors, please let us know.

[Other language spoken]