In this article, we will look into the top 20 most innovative economies in Asia. If you want to skip our detailed analysis, you can go directly to the Top 5 Most Innovative Economies in Asia.
Technological Advancement in Asia
According to the IMF, Asia emerged as a leader in applied research, accounting for a patent share of 54% in 2019. This can be attributed to major economies in the region including China, Japan, and Korea, placing Asia ahead of Europe and America in terms of patent production. Moreover, frontier Asian economies such as South Korea, invest heavily in research and development. Singapore and New Zealand lead the basic science patent output in Asia and the Pacific. On the other hand, non-frontier economies have capitalized on high-tech imports, foreign investment, and participation in the global value chain. Additionally, the rise in tertiary education enrollment rates in countries such as India and Vietnam is providing the necessary skills to their workforce to adapt and innovate.
Non-frontier economies in Asia have also evolved their digital infrastructure. For instance, the number of secure internet servers has amplified 200 times, resulting in a reduced gap compared to high-income countries. India has emerged as a leader in information technology. Many economies including China, Japan, and South Korea are working at the forefront of digital technology adoption including robotics and e-commerce. China is the world’s biggest user of robots, accounting for around 30% of the market.
Despite its innovation and impressive achievements in research and development, the region still faces multiple challenges to fully capitalize on its innovative potential. Technology adoption and scientific developments are restricted within a cluster of few firms and countries, while other economies lag. The uneven distribution limits regional productivity in Asia. Moreover, small and medium enterprises (SMEs) in the region face multiple challenges such as little to no access to cutting-edge technologies and a lack of capabilities to utilize them, especially in the digital domain. This restricted access inhibits the growth of SMEs in Asia. Asian economies must tackle these challenges to foster sustained and inclusive growth, benefitting the region as a whole.
Major Players in the Asian Market
Some of the key players driving innovation in the region include Alibaba Group Holding Limited (NYSE:BABA), Sony Group Corporation (NYSE:SONY), and POSCO Holdings Inc. (NYSE:PKX).
On January 30, Alibaba Group Holding Limited (NYSE:BABA) announced its new serverless solution and a vector engine technology at the AI and Big Data Summit in Singapore. The new solution enables users to access as many computer resources as they need. It allows users to only pay for what resources they use, bringing the inference costs 50% down. Vector engine technology transforms text and data into an HD space. The space allows the embedding of structured and unstructured contexts to facilitate tasks. At the summit, Alibaba Group Holding Limited’s (NYSE:BABA) Cloud launched a new tool, PAI-Artlab for designers. This will help them simplify the process of model training and image generation.
On January 23, Sony Group Corporation (NYSE:SONY) reported that it had signed a three-year sponsorship agreement with World Athletics. This agreement will leverage Sony Group Corporation’s (NYSE:SONY) technological capabilities at all World Athletics Series events from 2024 to 2026. This also includes the upcoming championships in Glasgow and Tokyo in 2025. The company will utilize its expertise to record and share the excitement of these events around the world, with the help of the Alpha mirrorless camera and top-notch broadcast solutions. Moreover, the wholly-owned subsidiary of Sony Group Corporation (NYSE:SONY), Hawk-Eye Innovations will be ensuring fair competition through its officiating services.
POSCO Holdings Inc. (NYSE:PKX) is a leading integrated steel manufacturing company in South Korea. On February 2, the company announced that it had taken a major step toward hydrogen reduction steelmaking. The company launched a new development center, focusing on HyREX technology. It is a process that utilizes hydrogen instead of fossil fuels. This will help POSCO Holdings Inc. (NYSE:PKX) reduce its carbon emissions. The center will have different teams for research, construction, and testing, aiming for the completion of the 300,000-ton test facility by 2027.
Now, let’s have a look at the top 20 most innovative economies in Asia.
Top 20 Most Innovative Economies in Asia
Methodology
To compile our list of the top 20 most innovative economies in Asia, we employed metrics including R&D Expenditure, High Technology Exports in US$, and Digital Adoption Index (DAI).
Firstly, we sorted countries based on their R&D expenditure. We then sourced their DAI and high-technology exports from the World Bank. We assigned ranks to the countries on our list based on each metric. Finally, we allotted weights as 40% to R&D Expenditure, 40% to High Technology Exports, and 20% to DAI to our metrics. Our list ranks the countries in descending order of the weighted average calculated across our metrics.
Please note that we have not included Israel in our list due to the current geopolitical situation in the country. The war on Gaza by Israel has led to major economic losses in the country, making it difficult to assess its innovation.
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Top 20 Most Innovative Economies in Asia
20. Armenia
R&D Expenditure as a Percentage of GDP (2021): 0.21%
High Technology Exports (2021): $37.5 million
Digital Adoption Index (2016): 0.621
Insider Monkey Score: 6.73
Armenia is ranked among the top 20 most innovative economies in Asia. In 2021, the country spent 0.21% of its GDP on research and development. In 2021, the high technology exports of Armenia were reported to be $37.5 million.
19. Bahrain
R&D Expenditure as a Percentage of GDP (2014): 0.1%
High Technology Exports (2019): $171 million
Digital Adoption Index (2016): 0.786
Insider Monkey Score: 6.33
Bahrain ranks 19th on our list. The country reported a DAI of 0.786 in 2016. The high technology exports of the country were reported to be $171 million.
18. Kazakhstan
R&D Expenditure as a Percentage of GDP (2021): 0.13%
High Technology Exports (2020): $2.49 billion
Digital Adoption Index (2016): 0.670
Insider Monkey Score: 5.8
Ranked 18th on our list, Kazakhstan reported an R&D spending of 0.13% in 2021. The country reported high technology exports of $2.49 billion in 2020.
17. Iran
R&D Expenditure as a Percentage of GDP (2019): 0.79%
High Technology Exports (2021): $96.7 million
Digital Adoption Index (2016): 0.509
Insider Monkey Score: 5.5
Iran is ranked 17th on our list. In 2019, it spent 0.79% of its GDP on research and development. The high technology exports of the country were $147 million in 2021.
16. Indonesia
R&D Expenditure as a Percentage of GDP (2020): 0.28%
High Technology Exports (2021): $7.49 billion
Digital Adoption Index (2016): 0.457
Insider Monkey Score: 5.2
Indonesia ranks 16th on our list. In 2020, the country spent 0.28% of its GDP on research and development. The high technology exports of the country were $171 million in 2021. The country reported a DAI of 0.786 in 2016.
15. Oman
R&D Expenditure as a Percentage of GDP (2021): 0.29%
High Technology Exports (2021): $662 million
Digital Adoption Index (2016): 0.653
Insider Monkey Score: 4.7
Oman is ranked among the top 20 most innovative economies in Asia. In 2021, the country spent 0.29% of its GDP on R&D. In 2021, the high technology exports of the country were reported to be $662 million.
14. Philippines
R&D Expenditure as a Percentage of GDP (2018): 0.32%
High Technology Exports (2021): $38.2 billion
Digital Adoption Index (2016): 0.439
Insider Monkey Score: 4.7
The Philippines is ranked 15th on our list. In 2018, the country spent 0.32% of its GDP on research and development. The high technology exports of the country were $38.2 billion in 2021.
13. Saudi Arabia
R&D Expenditure as a Percentage of GDP (2021): 0.46%
High Technology Exports (2020): $217 million
Digital Adoption Index (2016): 0.669
Insider Monkey Score: 4.7
Saudi Arabia ranks 13th on our list. The country reported a DAI of 0.669 in 2016. In 2021, Saudi Arabia reported an R&D spending of 0.46%. The high technology exports of the country were reported to be $217 million in 2020.
12. Cyprus
R&D Expenditure as a Percentage of GDP (2021): 0.81%
High Technology Exports (2021): $88 million
Digital Adoption Index (2016): 0.677
Insider Monkey Score: 4.5
Cyprus is ranked 12th among the most innovative economies in Asia. In 2021, the country reported an R&D expenditure of 0.81%. The high technology exports of the country were reported to be $88 million in 2021.
11. Qatar
R&D Expenditure as a Percentage of GDP (2021): 0.68%
High Technology Exports (2021): $147 million
Digital Adoption Index (2016): 0.707
Insider Monkey Score: 4.4
Qatar is ranked 11th on our list. The country had a DAI of 0.707 in 2016. In 2021, it spent 0.68% of its GDP on research and development. The high technology exports of the country were $147 million in 2021.
10. India
R&D Expenditure as a Percentage of GDP (2020): 0.65%
High Technology Exports (2021): $27.4 billion
Digital Adoption Index (2016): 0.510
Insider Monkey Score: 4.2
India is one of the most innovative countries in Asia. In 2020, the country spent 0.65% of its GDP on R&D. The high technology exports of the country were $27.4 billion in 2021.
9. Vietnam
R&D Expenditure as a Percentage of GDP (2020): 0.43%
High Technology Exports (2020): $102 billion
Digital Adoption Index (2016): 0.521
Insider Monkey Score: 4.0
Vietnam is ranked among the most innovative economies in Asia. The country spent 0.43% of its GDP on R&D in 2020. The high technology exports of Vietnam were reported to be $102 billion in 2020.
8. Turkey
R&D Expenditure as a Percentage of GDP (2021): 1.4%
High Technology Exports (2021): $5.72 billion
Digital Adoption Index (2016): 0.632
Insider Monkey Score: 3.1
Turkey ranks 8th on our list. The country reported a DAI of 0.632 in 2016. The high technology exports of the country were reported to be $5.72 billion. In 2021, the high technology exports of the country were $5.72 billion.
7. Thailand
R&D Expenditure as a Percentage of GDP (2021): 1.3%
High Technology Exports (2021): $45.8 billion
Digital Adoption Index (2016): 0.619
Insider Monkey Score: 2.9
Thailand is one of the most innovative countries in Asia. In 2021, the country spent 1.3% of its GDP on research and development. The high technology exports of the country were $45.8 billion in 2021.
6. United Arab Emirates
R&D Expenditure as a Percentage of GDP (2021): 1.5%
High Technology Exports (2021): $2.90 billion
Digital Adoption Index (2016): 0.822
Insider Monkey Score: 2.5
The UAE is ranked 6th among the top 20 most innovative economies in Asia. In 2021, the country spent 1.5% of its GDP on research and development. In 2021, the UAE reported the high technology exports of $2.90 billion.
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Disclosure: None. Top 20 Most Innovative Economies in Asia is originally published on Insider Monkey.