Key global innovation trends have been presented in the Global Innovation Index 2020 released in September this year. This report launched in 2007 and is published by the World Intellectual Property Organization, INSEAD and Cornell University, ranking over 130 economies. These reports are helpful in forming an outlook for the impact of COVID-19 on R&D spending, particularly when compared to GFC recovery from 2009.
Despite the difficult economy, certain industries have been increasing their R&D spending, for instance software and hardware companies, who accounted for around 38 percent of total business R&D spending in 2018-19. Increased digitisation will be essential during the pandemic as lockdowns are enforced and physical movement is restricted. The healthcare industry are also increasing their R&D efforts, which have been critical during the pandemic in terms of vaccine development and more.
Industries that have not held up so well include real estate, household goods, travel and leisure and professional services. While these areas tend to have a lower amount of R&D in general, innovation and digitisation will be required to recover from the crisis.
Government stimulus packages for innovation were vital to stimulating R&D and helping economies recover faster in 2009 and this will be the case again now. Governments are already implementing measures including France’s US$8.4 billion digital investment and $13 billion R&D stimulus packages and Germany’s $58.8 billion package for future-focused technologies. Incentives such as these, along with temporary measures such as accelerating R&D tax credit payments, will be key to economic recovery and growth in future years.