Country Insights: Technology and Innovation

The Technology and Innovation factor measures both the record of a country's enterprises in producing innovation-intensive goods and services, as well as the environment for innovation.  In our latest update for the fourth quarter of 2023 (here), Singapore, the United Kingdom and Ireland emerge as the strongest countries in the world, while Afghanistan, Eritrea and North Korea sit at the bottom of the ranking.

Source: Continuum Economics

A report from the United Nations Conference on Trade and Development (here) underscores the pivotal role of technology and innovation in driving economic growth. The emergence of transformative technologies like AI, IoT, EVs, and green hydrogen has created a market valued at USD 1.5 trillion in 2020, projected to soar to over USD 9.5 trillion by 2030. This presents a significant opportunity for all countries, especially those in the developing world, to embrace these advancements and avoid being left behind. As the transition towards these technologies gains momentum, it is evident that certain regions, such as the U.S. and select Western European and Asian countries, are taking the lead. Therefore, it is imperative for emerging economies to actively participate in this technological revolution to ensure their competitiveness and sustainable growth.

Several key factors contribute to Singapore's robust technology and innovation ecosystem. The nation provides a conducive business environment backed by supportive government policies and a proficient workforce. The government's active involvement in talent development and digital initiatives, including the Smart Nation agenda initiated in 2014 and programs like AI Singapore, play a significant role in fostering this environment. Moreover, abundant ICT initiatives like SMEs Go Digital and the TechSkills Accelerator support digital transformation, while strategic partnerships such as the sandbox initiative for Generative AI enterprise solutions with Enterprise Singapore and IMDA highlight the country’s commitment to fostering innovation and technological advancement.

The poor technological and innovation environment in Afghanistan can be attributed to a combination of factors, including lack of infrastructure and political instability. The inadequate infrastructure, characterized by limited access to electricity, internet, and transportation networks, creates barriers for businesses and individuals to engage in technological advancements. Additionally, the prolonged conflict and political instability have further exacerbated these challenges, leading to a lack of investment in technology and innovation. The uncertain security situation discourages both domestic and foreign investors from committing resources to technological development. Overall, the combination of these factors has contributed to Afghanistan's lagging behind in technological innovation compared to other countries.