A leading US business magazine, Bloomberg has published the Bloomberg Innovation Index (Bloomberg II) since 2006 which ranks countries based on their overall innovation capability.

Hungary takes the 28th place in the 2020 ranking, a clear improvement from last year’s 32nd. It performed better in all but two of the indicator groups (the exceptions being manufacturing value added and tertiary education).

The country scored better in productivity, technology company density, research personnel concentration and patent activity. As usual, the best place (13th) was achieved in manufacturing value added. The greatest improvement from last year was achieved in productivity and technology company density. The biggest (yet still small) drop was in tertiary education by four places.

Germany took first place in the 2020 ranking, swapping places with last year’s winner South Korea and overtaking the emerging Singapore (3rd place). Switzerland, Israel and the US, as well as several other EU Member States (Sweden, Finland, Denmark and France, in this order) also made their way to the top 10. Among the EU28, Hungary ranks 18th ahead of countries such as Spain, Portugal or Estonia. Among the V4 countries, the Czech Republic (24th place) and Poland (25th place) are both ahead, while Slovakia (41st place) remains behind Hungary. From the EU Slovenia is the biggest gainer in the ranking (moving up 10 places to 21st), while Finland is likely to raise brows with the 7th place (from 3rd in 2019). In 2019 the Hungarian Government began to reform the domestic research and innovation system with an aim to make financing predictable and stable. The results include increased spending on R&D, better utilisation of funds, stronger cooperation in the RDI sector, and mutually fruitful collaborative partnerships between businesses, universities and research institutes. In the long term, this generates added value, contributes to productivity, stimulates patent activity and the effectiveness of higher education, and ultimately helps Hungary to achieve better scores in the Bloomberg innovation ranking.

On the methodology

The 2020 ranking process began with more than 200 economies. Countries that did not report enough data were eliminated, trimming the total list to 105. Bloomberg finally ranked the top 60 of them. Sources of data included the following: Bloomberg’s own data collection, the World Bank, IMF, OECD, the World Intellectual Property Organization (WIPO) and the UN Educational, Scientific and Cultural Organization (UNESCO).

The overall ranking is based on seven data groups, each containing several further indicators. Data groups are as follows:

1. Research and development expenditures (as a percentage of the GDP)
2. Manufacturing value added
3. Productivity (GDP and GNI per employee aged 15+)
4. Technology company density (the share of domestic-based state-owned high-tech [aviation and defence industry, biotechnology, hardware and software, semiconductors, internet software and service development, and renewable energy] companies as a percentage of domestically incorporated listed companies and as a percentage of all listed high-tech companies in the world)
5. Tertiary education (proportion of students enrolled in higher education in the post-secondary age group irrespective of age; proportion of higher education graduates in the total labour force; and the proportion of fresh science and engineering graduates among all higher education graduates and in the total labour force)
6. Research personnel concentration (the number of R&D performing personnel [including PhD students] per 1 million inhabitants)
7. Patent activity (number of patent applications per 1 million inhabitants and per USD 1 million R&D expenditure; number of certain patents as a percentage of all such patents globally).