The Nordic countries of Denmark, Finland, Iceland, Norway and Sweden have long enjoyed a reputation for being among the most business-friendly locations for innovation-oriented enterprises. This holds true for mature global companies as well as SMEs and startups. The Finnish startup ecosystem, for example, is often described as the most attractive in Europe and, indeed, Finland hosts Slush, perhaps the world´s most famous annual startup event and community.
In 2020 two of the most important annual innovation reports listed Nordic countries at the top of European and global rankings.
Quoting directly from the European Commission´s 2020 report which became available in June, “[t]he annual European Innovation Scoreboard (EIS) provides a comparative assessment of the research and innovation performance of EU Member States … and the relative strengths and weaknesses of their research and innovation systems.”
The overall rankings are based on a cumulative score over a wide range of criteria. Based on the overall score, the report groups countries in the following categories: modest innovators, moderate innovators, strong innovators and innovation leaders.
Only five EU countries scored a sufficient number of cumulative points to be considered innovation leaders, the top 3 of which are the Nordic countries of Sweden (153 points), Finland (152 points) and Denmark (146 points). Each of these countries achieved scores that are higher than the IP5 group comprising China, the United States, Japan, South Korea and the European Union (EU average).
The scores were determined by evaluating in detail the following ten “innovation dimensions” which are listed in Table 1 of the EIS report:
1. Human resources (new doctorate graduates, population aged 25-34 with tertiary education, lifelong learning)
2. Attractive research systems (international scientific co-publications, foreign doctorate students)
3. Innovation-friendly environment (broadband penetration, opportunity-driven entrepreneurship)
4. Finance and support (R&D expenditure in the public sector, venture capital expenditures)
5. Firm investments (R&D expenditure in the business sector, non-R&D innovation expenditures, enterprises providing training to develop or upgrade ICT skills of their personnel)
6. Innovators (SMEs with product or process innovations, SMEs with marketing or organizational innovations, SMEs innovating in-house)
7. Linkages (innovative SMEs collaborating with others, public-private co-publications, private co-publications, private co-funding of public R&D expenditures)
8. Intellectual assets (PCT applications, trademark applications, design applications)
9. Employment assets (employment in knowledge-intensive activities, employment in fast-growing enterprises of innovative sectors)
10. Sales impacts (medium and high-tech product exports, knowledge-intensive services exports, sales of new-to-market and new-to-firm product innovations)
A link to the 2020 European Innovation Scoreboard can be found here.
In September the World Intellectual Property Organization (“WIPO”) along with Cornell University and INSEAD, released their 13th Global Innovation Index (“GII”) report. This approximately 400-page report includes a wide range of information about the state of innovation in nearly every country in the world and addresses the expected effects of the COVID-19 crisis on innovation going forward - short, medium and long-term.
The report also includes, of course, overall country rankings. Globally, Nordic countries ranked as follows: Sweden (2), Denmark (6), Finland (7), Norway (20) and Iceland (21). Sweden, Denmark and Finland each achieved scores that were approximately double the median global score.
The GII country rankings were based on an evaluation of the following areas:
1. Institutions
2. Human capital and research
3. Infrastructure
4. Market sophistication
5. Business sophistication
6. Knowledge and technology outputs
7. Creative outputs
Taking a closer look at the global rankings for Finland, by way of example, the country ranks 2nd in institutions, 4th in human capital and research, 6th in knowledge and technology outputs and 8th in business sophistication, ahead of countries such as Germany, France and the United Kingdom, in each of those four categories.
A link to WIPO´s 2020 Global Innovation Index can be found here.
These impressive results may come as a surprise to those not so familiar with the innovation climate in Nordic countries today. But it is not a surprise at all to those who live and work there given the many ways Nordic countries incentivize and support innovation.
For more information on this topic, please sign up for our free webinar on 27 January 2021, where we will take a closer look at both reports and provide an overview of important intellectual property developments that occurred in 2020.
You can register for the program here.
The authors, Mariella Massaro and Robert Alderson are ready assist you in any questions you have.
Article is also published in Lexology