The Global Innovation Index 2016 (GII), released on Monday, is now in its ninth year and is published by Cornell University and UN agency the World Intellectual Property Organization (WIPO).
It ranks 128 countries according to their innovation capabilities and results and aims to be a “benchmarking tool for business executives, policy makers and others seeking insight into the state of innovation around the world”.
Sweden climbed to second place from third in 2015 in a top-five table that included Switzerland at the top, followed by the UK in third place and the US and Finland in the third and fourth spots.
It said that Sweden regained the second highest position, a rank it held from 2011 to 2013, largely thanks to gaining in the sub-categories of investment and creative goods and services.
Sweden came in eighth place in a sub-category focusing on the quality rather than quantity of innovation, but the report said the country's performance was improving: “Like Japan, the Republic of Korea and Sweden are high-income economies that have improved their ranking on this combined innovation quality indicator. (…) Although Sweden shows marginally lower scores in the quality of universities than last year, a stronger score in patent families drives its upward movement.”
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The Global Innovation Index is historically dominated by highly economically developed countries, and 15 of the top 25 are European.
“Europe benefits from comparatively strong institutions and well-developed infrastructure, while room for improvement is found in business sophistication and knowledge and technology outputs,” read the report.
However, China's entry into the top 25 this year marks the first time a middle-income country has joined the leading group. But despite its rise, an “innovation divide” persists between developed and developing countries, said researchers.
“Investing in innovation is critical to raising long-term economic growth,” said WIPO Director General Francis Gurry.
“In this current economic climate, uncovering new sources of growth and leveraging the opportunities raised by global innovation are priorities for all stakeholders.”
Sweden, which is the birthplace of startups including Spotify, Skype and gaming leader Mojang, has a long-standing reputation for innovation. The Global Innovation Index comes a month after Sweden topped the 2016 edition of the European Innovation Scoreboard, which named the country as the EU's innovation leader, followed by neighbours Denmark and Finland, then Germany and the Netherlands.