The Global Innovation Index 2018 keeps Switzerland in the No. 1 spot, followed by the Netherlands, Sweden, United Kingdom and Singapore. The United States fell from fourth place in 2017 to sixth this year, while China jumped from 22nd to 17th in the rankings.
Francis Gurry, director general of the U.N. World Intellectual Property Organization, said China's ranking represents a breakthrough for its economy, which is rapidly transforming and prioritizing research and ingenuity.
"China's rapid rise reflects a strategic direction set from the top leadership to developing world-class capacity in innovation and to moving the structural basis of the economy to more knowledge-intensive industries that rely on innovation to maintain competitive advantage," Gurry said. "It heralds the arrival of multipolar innovation."
Now in its 11th edition, the index ranks 126 economies based on 80 indicators ranging from the creation of mobile applications to education spending, scientific and technical publications, and intellectual property filing rates.
The index is sponsored by the WIPO, Cornell University's SC Johnson College of Business and INSEAD, the graduate school of business with campuses in France, Singapore and Abu Dhabi. They say it gives global decision makers a better understanding of how to stimulate innovation, which "drives economic and human development."
The report said "China's innovation prowess becomes evident in various areas," with some of its greatest improvements in global research and development companies, high technology imports, the quality of its publications, and enrollment in graduate education.
"In absolute values, and in areas such as R&D expenditures and the number of researchers, patents and publications, China is now first or second in the world, with volumes that overshadow most high income economies," it said.
The report said that China's rapid rise in the rankings over the last few years has been spectacular and that it shows the way for other middle-income economies, though only Malaysia, currently 35th in the rankings, continues to edge closer to the top 25.
According to the index, 20 middle and lower-income economies that perform "significantly better" than their level of development would predict made this year's list of "innovation achievers," including three for the first time — South Africa, Tunisia and Colombia.
Six of the achievers come from sub-Sahara Africa, the most for any region. In addition to South Africa, they are Kenya, Rwanda, Mozambique, Malawi and Madagascar. There were five achievers from eastern Europe — Moldova, Armenia, Ukraine, Montenegro and Serbia.
The report singles out three countries that made a comeback to the achievers list this year — Mongolia, Thailand and Montenegro. In addition to Kenya, three other countries have been on the achievers list for eight years — Moldova, Vietnam and India.
At the bottom of the innovation rankings are Bolivia, Nigeria, Guinea, Zambia, Benin, Niger, Ivory Coast, Burkina Faso, Togo and Yemen. The list of 126 nations includes three countries that climbed 10 places in the rankings: Iran from 75th to 65th, Albania from 93rd to 83rd, and Egypt from 105th to 95th. Macedonia, meanwhile, fell more than 10 spots, from 61st to 84th.