A new report published by the United Nations World Intellectual Property Organization (WIPO) has shown that for the first time, a middle-income country, China, has joined highly developed economies among global leaders in innovation.
“China’s progression reflects the country’s improved innovation performance as well as methodological considerations such as improved innovation metrics in the GII [Global Innovation Index],” noted a press release issued by WIPO today.
However, despite China’s rise, an “innovation divide” persists between developed and developing countries, according to the Global Innovation Index 2016, released today by the WIPO, Cornell University, and the multi-nation business graduate school INSEAD.
Switzerland emerged as the global leader among innovative economies followed by Sweden, the United Kingdom, the United States and Finland. Switzerland ranked first in the 2015 index as well.
WIPO also noted that the 2016 findings point to an increasing awareness among policymakers that fostering innovation is crucial to a vibrant, competitive economy.
“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,” he added
The agency added that innovation requires continuous investment. Before the 2009 crisis, research and development expenditure grew at an annual pace of approximately seven per cent. However, 2016 data has indicated that global research and development grew by only four per cent in 2014.
“This was a result of slower growth in emerging economies and tighter research and development budgets in high-income economies – this remains a source of concern,” it noted.
According to WIPO, among the GII 2016 leaders, four economies – Japan, the US, the UK, and Germany – stand out in “innovation quality,” a top-level indicator that looks at the calibre of universities, number of scientific publications and international patent filings. China ranked 17th in innovation quality, making it the leader among middle-income economies for this indicator, followed by India, which has overtaken Brazil.
However, Sub-Saharan Africa continued to lag behind. Mauritius took the top spot among all economies in the region (53rd), followed by South Africa (54th), Kenya (80th), Rwanda (83rd), Mozambique (84th), Botswana (90th), Namibia (93rd), and Malawi (98th).
That said, since 2012, Sub-Saharan Africa has had more countries than any other region among the group of “innovation achievers” – countries that perform better than their level of development would predict. This year, Kenya, Madagascar, Malawi, Mozambique, Rwanda, and Uganda stood out.
“As economic growth in Sub-Saharan Africa is slowing, the GII 2016 shows that [the region] must preserve its current innovation momentum, while continuing to diversify economies away from oil production and commodity revenues,” noted WIPO.
Average regional performance shows strengths in the ease of starting a business, information and communication technologies (ICTs), business-model creation, and relative expenditure on education, with weaknesses in firms conducting global research and development, high-tech exports, the quality of local universities and number of scientific publications.
The press release further added that in general, further efforts are required in Human capital, Research and Infrastructure.
Highlighting the importance of investment in improving innovation quality as essential for closing the “innovation divide”, co-editor Soumitra Dutta, Dean at the Cornell College of Business pointed out that: “While institutions create an essential supportive framework for doing so, economies need to focus on reforming education and growing their research capabilities to compete successfully in a rapidly changing globalized world.”
The report also found that Europe benefits from comparatively strong institutions and well-developed infrastructure, while room for improvement is found in business sophistication and knowledge and technology outputs.
The WIPO press release also noted that Europe did particularly well in environmental performance, ICT access, and school life expectancy. At the same time, it noted that there is room for improvement in research and development, financed by businesses, research and development financed by foreign firms, high-tech exports, and international patent filings.
Pointing to the benefits of innovation, Bruno Lanvin, INSEAD Executive Director for Global Indices, and co-editor of the report said, “Some may see globalization as a trend in search of its ‘second breath.’ Yet, the relative contraction of international trade and investment flows does give even more strategic importance to the two sides of global innovation: on one hand, more emerging countries are becoming successful innovators, and on the other hand, an increasing share of innovation benefits stem from cross-border co-operation.”
The Global Innovation Index
The Global Innovation Index 2016 (GII) explores the rising share of innovation carried out via globalized innovation networks, finding that gains from global innovation can be shared more widely as cross-border flows of knowledge and talent are on the rise. It also concludes that there is ample scope to expand global corporate and public R&D cooperation to foster future economic growth.
At the national level, the report says that innovation policies should more explicitly favour international collaboration and the diffusion of knowledge across borders. New international governance structures should also aim to increase technology diffusion to and among developing countries.
Published annually since 2007, the GII is a leading benchmarking tool for business executives, policy makers and others seeking insight into the state of innovation around the world. Policymakers, business leaders and other stakeholders use the GII to evaluate progress on a continual basis.
The WIPO press release added that this year’s study benefited from the experience of its Knowledge Partners, A.T. Kearney and IMP³rove – European Innovation Management Academy, the Confederation of Indian Industry and du, as well as of an Advisory Board of international experts.
The core of the GII Report consists of a ranking of world economies’ innovation capabilities and results. Recognizing the key role of innovation as a driver of economic growth and prosperity, and the need for a broad horizontal vision of innovation applicable to developed and emerging economies, the GII includes indicators that go beyond the traditional measures of innovation such as the level of research and development.
No pathway to reach the Paris Agreement’s 1.5˚C goal without the G20
“The world urgently needs a clear and unambiguous commitment to the 1.5 degree goal of the Paris Agreement from all G20 nations”, António Guterres said on Sunday after the Group failed to agree on the wording of key climate change commitments during their recent Ministerial Meeting on Environment, Climate and Energy.
“There is no pathway to this goal without the leadership of the G20. This signal is desperately needed by the billions of people already on the frontlines of the climate crisis and by markets, investors and industry who require certainty that a net zero climate resilient future is inevitable”, the Secretary General urged in a statement.
The UN chief reminded that science indicates that to meet that ‘ambitious, yet achievable goal’, the world must achieve carbon neutrality before 2050 and cut dangerous greenhouse gas emissions by 45 % by 2030 from 2010 levels. “But we are way off track”, he warned.
The world needs the G20 to deliver
With less than 100 days left before the 2021 United Nations Climate Conference COP 26, a pivotal meeting that will be held in Glasgow at the end of October, António Guterres urged all G20 and other leaders to commit to net zero by mid-century, present more ambitious 2030 national climate plans and deliver on concrete policies and actions aligned with a net zero future.
These include no new coal after 2021, phasing out fossil fuel subsidies and agreeing to a minimum international carbon pricing floor as proposed by the International Monetary Fund (IMF).
“The G7 and other developed countries must also deliver on a credible solidarity package of support for developing countries including meeting the US$100 billion goal, increasing adaptation and resilience support to at least 50% of total climate finance and getting public and multilateral development banks to significantly align their climate portfolios to meet the needs of developing countries”, he highlighted.
The UN Chief informed that he intends to use the opportunity of the upcoming UN General Assembly high-level session to bring leaders together to reach a political understanding on these critical elements of the ‘package’ needed for Glasgow.
A setback for Glasgow
The G20 ministers, which met in Naples, Italy on July 23-25, couldn’t agree to a common language on two disputed issues related to phasing out coal and the 1.5-degree goal, which now will have to be discussed at the G20 summit in Rome in October, just one day before the COP 26 starts.
Economic Recovery Plans Essential to Delivering Inclusive and Green Growth
EU member states must ensure careful and efficient implementation of economic recovery plans that support inclusion and growth to bounce back from the worst impacts of the COVID-19 pandemic, says a new World Bank report.
The World Bank’s latest EU Regular Economic Report – entitledInclusive Growth at a Crossroads – finds that the unprecedented and exceptional policy response of governments and EU institutions has cushioned the worst impacts on employment and income. However, the pandemic has exposed and exacerbated deep-seated inequalities, halting progress in multiple areas including gender equality and income convergence across the EU member states. A further three to five million people in the EU today are estimated to be ‘at risk of poverty,’ based on national thresholds benchmarked before the crisis.
The report highlights that effective recovery programs can reinforce progress on the green and digital transitions underway across the region. With the crisis continuing to unfold, government support schemes and the rollout of vaccines in a timely manner will remain essential to bolstering the resilience of firms, workers, and households. Given the longevity of the crisis and the impact on the most vulnerable, many governments have opted to extend the duration of support throughout 2021.
“A green, digital and inclusive transition is possible if economic policy is increasingly geared towards reforms and investment in education, health and sustainable infrastructure,” said Gallina A. Vincelette, Director for the European Union Countries at the World Bank.
With an output contraction of 6.1 percent in 2020, the COVID-19 pandemic has triggered the sharpest peacetime recession in the EU. Governments will need to ensure targeted and active labor market policies are in place to support an inclusive recovery. The report highlights that special attention should be given to already vulnerable workers such as youth, the self-employed, and those in informal employment. These groups are more likely to face employment adjustments during the crisis and may face longer spells of unemployment or periods outside the labor force.
Women have been disproportionately impacted by work disruptions during the pandemic, particularly in the sectors facing the worst effects of the crisis. This was also highlighted in the 2020 Regular Economic Report produced by the World Bank, which found that at least one in five women will face difficulty returning to work compared to one in ten men. It has been harder for women to resume work due to the sectors and occupations that they are working in and because of the additional care burdens that have fallen disproportionately on their shoulders – a manifestation of increasing inequities in home environments.
“As recovery takes hold, it will be important for carefully targeted and coordinated policy support to continue to mitigate the impact of the crisis, with measures increasingly targeted towards vulnerable households and viable firms. Policy makers will also need to strike a balance between helping those that need it most, while enhancing the productivity of the economy and keeping debt at manageable levels,” added Vincelette.
World Bank’s Regional Action in Europe and Central Asia
To date, the World Bank has committed more than $1.7 billion to help emerging economies in Europe and Central Asia mitigate the impacts of COVID-19. Since April 2020, around $866 million has been approved through new emergency response (MPA/Vaccines) projects. In addition, up to $904 million is being reallocated, used, or made available from existing projects and lending, including additional financing, to help countries with their COVID-19 response.
The World Bank’s Global Economic Prospects suggests that growth will be strong but uneven in 2021. The global economy is set to expand 5.6 percent—its strongest post-recession pace in 80 years. The recovery largely reflects sharp rebounds in some major economies.
COVAX and World Bank to Accelerate Vaccine Access for Developing Countries
COVAX and the World Bank will accelerate COVID-19 vaccine supply for developing countries through a new financing mechanism that builds on Gavi’s newly designed AMC cost-sharing arrangement. This allows AMC countries to purchase doses beyond the fully donor-subsidized doses they are already receiving from COVAX.
COVAX will now be able to make advance purchases from vaccine manufacturers based on aggregated demand across countries, using financing from the World Bank and other multilateral development banks. Participating developing countries will have greater visibility of available vaccines, quantities available, and future delivery schedules, enabling them to secure doses earlier, and prepare and implement vaccination plans more effectively.
“This important and timely financing mechanism, made possible now by the World Bank and Gavi teaming up on the AMC cost-sharing arrangement, will allow COVAX to unlock additional doses for low- and middle-income countries,” said Dr. Seth Berkley, CEO, Gavi, the Vaccine Alliance. “As we move beyond initial targets and work to support countries’ efforts to protect increasingly large portions of their populations, World Bank financing will help us advance further towards our goal of bringing COVID-19 under control.”
The scalable mechanism brings together COVAX’s ability to negotiate advance purchase agreements with vaccine manufacturers with the World Bank’s ability to provide predictable financing to countries for vaccine purchase, deployment and broader health systems investments. The new mechanism will mitigate risks and uncertainties in country demand and financing ability.
“Accessing vaccines remains the single greatest challenge that developing countries face in protecting their people from the health, social, and economic impacts of the COVID-19 pandemic,” said World Bank Group President David Malpass. “This mechanism will enable new supplies and allow countries to speed up the purchase of vaccines. It will also provide transparency about vaccine availability, prices, and delivery schedules. This is crucial information as governments implement their vaccination plans.”
Countries with approved World Bank vaccine projects that confirm the purchase of additional doses through COVAX will agree with COVAX on the number of doses of a specific vaccine as well as related windows of delivery. On receiving a request from the country, the World Bank will provide COVAX a payment confirmation, allowing COVAX to make advance purchases of large amounts of vaccine doses with manufacturers at competitive prices.
Under the cost-sharing arrangement for AMC countries (92 low- and middle-income countries), COVAX plans to make available up to 430 million additional doses, or enough to fully vaccinate 250 million people, for delivery between late 2021 and mid-2022. There will be several supply offerings where countries will have the opportunity to select and commit to procuring specific vaccines that align with their preferences.
COVAX is co-led by the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, the Vaccine Alliance and the World Health Organization (WHO). The World Bank and COVAX will work in partnership with UNICEF and the PAHO Revolving Fund as key implementing partners to ensure safe vaccine delivery and supply of materials such as syringes, safety boxes and other items essential for vaccination campaigns.
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