The new WIPO index shows a divergence in innovation performance and brand value
The 15th edition of WIPO’s annual Global Innovation Index (GII) has been issued. This year’s report, which evaluates 132 nations based on how well they perform in terms of innovation, emphasizes a paradoxical—and possibly troubling—the difference between investment in innovation and an increase in investment-led productivity. For trademark experts, it is noteworthy that despite brand value being a significant consideration in the GII rankings, there is a divergence between the highest-ranking nations in the GII and the highest-ranking nations by brand value.
The GII analyzes 81 indicators to rank nations based on their innovation input and output. The top 20 nations are essentially unchanged this year; the only newcomers are Estonia and Luxembourg.
20 most innovative nations (and the 2021 comparison)
- Switzerland (1)
- United States (3)
- Sweden (2)
- United Kingdom (4)
- Netherlands (6)
- South Korea (5)
- Singapore (8)
- Germany (10)
- Finland (7)
- Denmark (9)
- China (12)
- France (11)
- Japan (13)
- Hong Kong (14)
- Canada (16)
- Israel (15)
- Austria (18)
- Estonia (21)
- Luxembourg (23)
- Iceland (17)
The Netherlands, Singapore, Germany, the United States, and Singapore have all moved up the list of the top 10. Most significantly, the United States now surpasses Switzerland in terms of global innovation, replacing Sweden. Canada has reentered the top 15, while China, which is now in position 11, is inching closer to the top 10 rankings.
Turkey (37th) and India (40th) have made their first appearances in the top 40 rankings. According to a press statement from WIPO, Vietnam, Iran, and the Philippines, which are rated 48, 53, and 59, respectively, are “the middle-income nations with the fastest innovation performance increase to date.”
A number of emerging economies, including Indonesia, Uzbekistan, and Pakistan, are surprisingly outperforming expectations in terms of innovation given their stage of economic growth. Kenya, Rwanda, and Mozambique are the top three “innovation overperformers” in sub-Saharan Africa, which has eight of them. Brazil, Peru, and Jamaica are outperforming other countries in Latin America and the Caribbean in terms of their state of development.
WIPO just recently agreed to incorporate global brand value as an essential part of the GII in 2020. This is in order to give greater significance to brand value when evaluating a country’s innovation performance.
Brand Finance is used as the basis for the GII’s worldwide brand value rankings. These are determined using the royalty relief approach, which, according to the WIPO, “determines the value that a corporation would be prepared to pay to license its brand if it did not own it.”
The United States and China are the top two countries when global brand value is separated from other measures. In fact, the two nations account for more than two-thirds of the overall brand value on the 2022 Brand Finance Global 500 list. A startling 49% ($3.9 trillion) of the global brand value belongs to the United States, and 19% ($1.6 trillion) to China.
It is not possible to directly compare the brand value performance of these nations to their total GII performance. Despite holding the top spot in the rankings for brand value, China in particular trails behind in the overall index.
However, the increase in trademark applications is part of a greater innovation trend that is reflected in the GII. Despite the covid-19 pandemic’s detrimental economic effects, a record amount of trademark applications were submitted in 2021, according to WIPO. In spite of severe forecasts based on previous economic recessions, the same held true for patent submissions (eg, the 2008 financial crisis).
This will be important for major brand owners to remember as the global economy becomes more unpredictable. Focusing on creating and maintaining a brand that has a major impact may be more beneficial in some circumstances than expanding into new markets or research fields by filing numerous patents and investing in new products, especially now that brands are under more pressure than ever to actually improve the lives of the people they approach.
