Economy

Innovation Indicator 2025

Small states lead as Germany loses momentum

2 Min.

27.11.2025

The latest Innovation Indicator by Roland Berger highlights a clear shift in global innovation dynamics. Switzerland remains the world’s most innovative country, followed by Singapore and Denmark. Smaller, highly specialised economies such as Sweden, Finland and Belgium outperform once again, driven by focused strategies and strong international cooperation. Larger economies including the United States, the United Kingdom and France record only moderate progress and remain positioned in the upper-middle field.

Several countries show a noticeable decline in innovation strength. China slips despite its technological ambitions, as do Taiwan, Australia, Italy, Poland, Turkey and Israel. The reasons range from geopolitical dependencies to weak scientific integration and structural barriers to commercialisation. Russia moves up to rank 23 due to war-economy-driven investments, though the sustainability of this momentum remains uncertain.

Germany holds rank 12 but loses traction in critical indicators. R&D expenditure stagnates, transnational patents decline and corporate innovation performance weakens, particularly in digital technologies and high-tech value creation. Scientific output shows little improvement, raising concerns about long-term competitiveness.

In key technologies, Germany ranks fourth, performing well in circular economy fields but falling behind in the digitalisation of products and services. Countries like Switzerland, Denmark and South Korea dominate, while China advances in biotechnology and energy technologies.

The sustainability index is shifting as well: China jumps from rank 20 to 5, while Denmark and Finland lose points. Germany drops to rank 7 despite political prioritisation. Efficiency assessments once again highlight the European paradox: strong knowledge generation, weak commercialisation. Openness remains an innovation driver, yet levels have declined since 2020 due to the pandemic and geopolitical tensions.

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