World Economic Forum: Israel Is 2nd Most Innovative Country In The World

Israel is the second most innovative nation in the world, according to the World Economic Forum’s Global Competitiveness Report 2016-2017, which ranks countries’ competitiveness based on 12 categories, including innovation, technological readiness, business sophistication and higher education.

When it comes to innovation, the Startup Nation is second only to Switzerland, which is also ranked No. 1 on the overall competitiveness list. Finland, the US and Germany round out the top five most innovative countries list, followed by Sweden, the Netherlands, Japan, Singapore and Denmark.

“The global economy is still in recovery,” according to the WEF. “Countries must embrace openness, technology and innovation to remain competitive.”

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Of the 138 nations recently examined by the World Economic Forum for competitiveness, Israel ranks No. 24 (up three positions from last year) with significant strengths in innovation (No.2), venture capital availability (No. 2) quality of research institutions (No. 3), company spending on research and development (No. 3), and university-industry R&D collaboration (No. 3).

Ranking higher on this year’s list is a result of Israel’s continued growth momentum, which stands in contrast to some of the other countries in the region. “Although most of the oil-importing countries in the region are facing declining or stagnating competitiveness, Israel improves by three positions as it continues to build on its positioning as one of the most innovative economies in the world,” according to the report.

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The WEF report comes on the heels of a record-breaking quarter for Israeli startups: 187 Israeli startups raised a record $1.7 billion in the second quarter of 2016, a whopping 55 percent above the $1.1 billion raised by 174 companies in the previous quarter, according to IVC Research Center and accounting firm KPMG Somekh Chaikin. Reports for the third quarter of 2016 are due later this month.

According to Koby Simana, CEO of IVC Research Center, “2016 will continue to be strong in capital raising, with a projected 20 percent year-on-year increase, or about $5.3 billion in total to be raised by the end of the year.”

Another testament to Israel’s strong startup scene is the recent acquisition of social games developer Playtika by a consortium of Chinese companies for $4.4 billion – one of the largest “exits” by an Israeli company in the history of the Startup Nation.

“Israel is a nation that sanctifies innovation”

With the largest number of startups per capita in the world, Israel is home to 2,000 startups that were founded in the past decade; another 3,000 small- and medium-size startup and high-tech companies; 30 growth companies; 50 large technology companies; and 300 R&D centers of  multinational corporations, according to a report released recently by Israel’s Innovation Authority.

High Tech Companies in Israel. Courtesy of Israel Innovation Authority

“Thanks to two fruitful decades in the Israeli high-tech industry, we have reached unprecedented achievements,” Avi Hasson, Israel’s Innovation Authority Chairman and Chief Scientist, said in a statement. “If we invest in our high-tech industry, we will be able to promote faster growth.”

In a statement, Israeli Prime Minister Benjamin Netanyahu said that “Israel is a nation that sanctifies innovation. We’ve achieved great heights, but we cannot stop now; we want to continue climbing.”

Photo, infographic, video: Israel Innovation Authority, Gilad Avidan, World Economic Forum