Innovation after COVID: call for a new virtual universe

On 2 September the World Intellectual Property Office (WIPO) published the 13th edition of its Global Innovation Index (GII).

Why is the GII published? The GII is intended to help governments and policymakers move away from viewing IP as a technical discipline and see its value as a political and economic currency in encouraging innovation. It seeks to express the innovation performance of various economies in a way which is readily understandable and clearly linked to key economic outcomes. The strengths and weaknesses analysis set out in the GII is intended to be used as a springboard for policy making and economic development.

What are the key findings this year?

1. Funding: Funding for innovation is drying up. Venture capital funding has been largely focussed on mega-deals concentrated in a few geographical hot-spots (Singapore, Israel and China, to name a few). Start-ups in particular are finding it difficult to access emergency funding measures put in place by governments which are not explicitly directed to financing innovation and R&D (with the notable exception of healthcare, where governments have injected large and unprecedented sums of money into early-stage vaccine creation). The report predicts that the impact of this funding shortage will be uneven, being felt most keenly by R&D intensive start-ups with longer-term research interests and developing firms already facing a scarcity of funding.
   
   
2. Geography: Although the UK has entered the top 3 ranked countries for this first time this year, the geography of innovation is continuing to shift toward Asia. The republic of Korea enters the top 10 for the first time, joining Singapore and closely followed by Hong Kong. Significant progress in innovation has been made by China, Vietnam, India and the Philippines, with all four outperforming on innovation in comparison to peers in their income group.
   
   
3. Development: As the rankings continue to be dominated by high income countries, there are concerns that progress made by developing economies in closing this gap will be stunted or even reversed by the economic effects of COVID-19, which already include disintegration of global value chains, reduced trade and increased debt. Adoption of Fintech solutions such as P2P and marketplace lending could help to mitigate these concerns by relaxing some of the constraints inherent in traditional funding structures, a proposal which remains relevant to early-stage businesses more widely where lack of infrastructure (internal or external) presents barriers to accessing funding. 

How do we move forward? In the shadow of the COVID-19 pandemic, the direction of innovation has moved toward health, big data, e-commerce and robotics. Now is the time to invest in creating the online and offline environments which are required to enable and leverage this change. That said, there is still potential for innovation and breakthrough technologies in other areas. The GII notes that the current climate has been a catalyst for adoption of digital tech even in more traditional sectors such as tourism, education and retail. Across the board, the report highlights the importance of government support, collaborative models and continued private sector investment in innovation in order to maximise the innovation potential stemming from the current economic disruption. The clear message is that investing in virtual universes is both valuable and necessary in order to pave sustainable pathways for the future.

Photo by h heyerlein on Unsplash