Global innovation funding has experienced its slowest growth rate since 2010, according to United Nations projections. The World Intellectual Property Organization (WIPO) reported that research and development (R&D) spending growth has declined because of high inflation and a slump in venture‑capital deals. The agency’s annual ranking of the world’s most innovative economies placed Switzerland at the top for the 15th consecutive year, followed by Sweden and the United States, while China moved up into the top 10.
Despite the familiarity of these rankings, the UN patent agency cautioned that global innovation funding has slowed significantly. WIPO chief Daren Tang noted that the financing that powers innovation is not as abundant as it once was. The report showed R&D spending growth fell to 2.9 percent last year, down from 4.4 percent the previous year, and is projected to slow further to 2.3 percent this year. Business R&D expenditures—accounting for over 70 percent of total global R&D—are expected to grow just 1.4 percent in 2024 and 2025, excluding China and the United States.
Venture‑capital funding for new ideas rose 7.7 percent last year, driven largely by U.S.-based megadeals and investment in generative AI. However, without these outliers, VC values would have contracted, and the number of VC deals fell 4.4 percent globally for the third consecutive year, indicating persistent investor caution. Tang warned that the global innovation engine is not performing at full capacity, highlighting the need for sustained financial commitment to support innovation.
Sacha Wunsch‑Vincent, head of WIPO’s department for economics and data analytics, added that expected interest‑rate cuts by central banks could help reduce inflation and boost innovation spending. The slowdown in innovation funding growth has significant implications for the global economy. As the world navigates economic uncertainty, the decline in R&D spending and venture‑capital activity could have long‑term consequences for technological advancement and economic growth. WIPO’s report serves as a reminder of the importance of sustained investment in innovation to drive progress and prosperity.
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