The 2022 Innovation Index released recently has indicated that Nigeria fall short once again among the most innovative countries in Africa as it ranked 16 in Africa.
This year saw Africa climb up the global tech ladder to join the rest of the world in running an economy driven by innovation. The 15th edition of the Global Innovation Index released recently by the World Intellectual Property Organization (WIPO) ranks Mauritius, South Africa, and Morocco, which have significantly moved up closer to developed economies in the rankings over the past few years, as the most innovative African countries.
Morocco, Tunisia, Kenya, Tanzania, and Zimbabwe performed above expectations under the lower-middle income category while Rwanda, Madagascar (which has Africa’s fastest internet), Mozambique, and Burundi “outperformed on innovation relative to their development” in the low-income group.
South Africa exceeded expectations in the upper middle-income group while Mauritius performed within expectations in the same group. Ghana and Senegal’s innovation performance was in line with their economic development in the lower-middle income category, as well as Ethiopia, Uganda, Burkina Faso, Togo, and Niger in the low-income group.
The rest of the nations, including the continent’s biggest economy Nigeria and the highly innovative Botswana performed below expectations.
Guinea is the least innovative country this year in an index that surveyed 31 African countries. Compared to the rest of the world, Africa is still the least innovative continent.
On Global level, the survey ranks Switzerland as the world’s top destination for innovation followed by the US, with China and G7 members Japan, France, Italy, and Canada failing to make it to the top 10 list.
Countries across Europe also feature prominently in the top 10, including Sweden (#3), the United Kingdom (#4) and the Netherlands (#5).
South Korea (#6), is known for its high R&D intensity. This is driven by its industrial conglomerates, known as chaebols, that are generally family-owned. Samsung and LG are among its largest companies, known for their high degree of corporate-academic collaboration.
Switzerland ranks at the top for the 12th year in a row—above the U.S., South Korea, and Israel. For many, this may come as a surprise. However, the country’s intellectual property rules are considered world-class, and they are complemented by strong collaboration between universities and industry.
What has enhanced innovation in Africa in 2022
According to Quartz, In past years, the continent significantly lagged behind in digital transformation, but covid-19, which forced many employees to work from their homes, acted as a much needed catalyst in building industries around frontier technologies.
Consequently, business leaders realized urgency in creating solutions around cloud computing uptake, blockchain development, and artificial intelligence while upskilling their staff on these technologies.
Telecommunication companies in Africa rolled out their 5G networks in 2022 and significantly reduced the cost of 4G mobile internet as social network Meta found 16 countries with a conducive environment for conducting metaverse tests.
Backed by a young, tech enthusiastic population, the continent had its largest smartphone shipment in history, as 5G smartphone sales surpassed 4G ones for the first time. More electric vehicles, and bikes also made their first trips on Africa’s roads this year.
This was also the year the continent launched a regional cybersecurity monitoring center, as most tech companies injected their investments in protecting Africa’s tech systems from cyber attacks.
More women also overcame barriers to join the African tech landscape this year. Open banking also started to take root in the continent this year.
And after years of banning crypto, many African nations are ending the year with either a crypto regulation in place or coming up early in 2023. Many central banks are also thinking along the lines of creating a retail Central Bank Digital Currency (CBDC), to follow in the footsteps of Nigeria.
The startup ecosystem is also projected to reach its its highest funding of $7 billion in 2022, as founders and innovators looked for more ways to solve the continent’s challenges.
“Seven of the top 10 most valued VC deals in Africa were in financial services. South Africa and Egypt both had three deals each in the top 10. Africa still saw the strongest growth in Q1 2022, an increase of 43.5%, relative to Q1 2021,” the report says.
However, it must be noted that aside from Botswana, Kenya, and Egypt, the rest of African countries recorded a decline in innovation scores this year compared to 2021. Report authors Soumitra Dutta and Bruno Lanvin attribute this to the war in Ukraine which has seen developing countries receive the biggest economic shocks from the crisis.
What Defines an Innovative Economy?
According to Visual capitalist, Innovation is inherently challenging to quantify, but the Global Innovation Index is a longstanding attempt to do just that.
The framework used for the index was designed to create a more complete analysis, comprising of 81 indicators across seven categories to calculate a country’s score:
7 Categories Example Indicators
- Business Sophistication Business R&D spend, net inflows of foreign direct investment
- Market Sophistication Size of economy’s GDP, intensity of local market competition
- Infrastructure Road, hospital, school construction, energy efficiency
- Human Capital & Research Government funding per pupil, quality of scientific and research institutions
- Institutions Political stability and safety, ease of starting a business
- Creative Outputs Most valuable brands, industrial design applications, trademark applications
- Knowledge and Technology Outputs Patent applications, increase in labor productivity, spending on software
In North America, the U.S. ranks highest. The country has long been known as a global leader in innovation, with a strong track record of introducing new ideas and technologies that have transformed the way we live and work. Ranking second in the region is Canada (Global rank: #15).
In South America, Chile (#50) ranks first across the region, thanks to its promising tech sector. To date, it is home to an estimated 8,000 tech companies. Following Chile is Brazil (#54), which saw a record number of IPOs in 2021 that were valued at nearly $7 billion.
In Middle East and Central Asia, the highest ranked in the region, Israel (#16) is the sole country globally that spends over 5% of GDP on R&D. Overall, it is a global leader in patent applications and information and communication technology (ICT) services exports. The small island nation of Cyprus (#27) follows in second, supported by government funding focused on start-ups.
With 15 of the top 25 economies in the world, Europe is a powerhouse for fostering innovative ecosystems. The continent is also a leader in social progress, equality, and life satisfaction. The region scores 30 on inequality according to the Gini Index compared to 41 for America.
South Korea (#6) ranks highest across East Asia and Oceania, and has established itself as a leader in technology and innovation on the global stage. Through its New Deal initiative, the government is spearheading projects on smart healthcare, AI, and smart industrial complexes. At the same time, it is accelerating the construction of eco-friendly infrastructure and renewable energy.
China sits just outside the global top 10, and now ranks #1 in multiple indicators, including labor productivity growth and trademarks by origin. China’s economic output per employed worker increased an impressive 4.2% annually from 2011 to 2019, on average. (Visual capitalist, Quartz)