Egypt’s has dropped in rank on the global innovation index (GII) from 92nd place in 2019 to 96th for 2020, while the country has maintained its 14th place among Lower-Middle (LM) income countries.
On the other hand, the GII report showed that Egypt has moved up from 106th place to 104th in the innovation input sub-index, while keeping its 18th place among the LM income countries in the same index.
Egypt is also among the top ten in innovation in Africa, according to the GII.
The index, however, put Egypt among 11 economies that are now performing below expectations for their level of development, despite initially performing at expectations in light of COVID-19 and its associated impacts.
The 11 economies are Sri Lanka, Uruguay, Cameroon, Egypt, Argentina, Azerbaijan, Ethiopia, Slovakia, Chile, the Ivory Coast, and Cambodia.
The report pointed out that these eleven economies were already on the fringes of performing below expectations in 2019.
Concerning the COVID-19 crisis and its associated challenges, the report said that the pandemic hit the innovation landscape at a time when innovation was flourishing.
“In 2018, research and development (R&D) spending grew by 5.2 percent — significantly faster than global GDP growth — after rebounding strongly from the financial crisis of 2008-2009. Venture capital (VC) and the use of intellectual property were at an all-time high. In recent years, political determination to foster innovation has been strong, including in developing countries, there is a relatively new and promising trend towards democratising innovation beyond a select number of top economies and clusters only,” the report read.
The report also expected innovation finance to decline amid the pandemic, based on the sharp drop in venture capital deals across North America, Asia, and Europe, without setting the amount of the expected decline due to the uncertainty the pandemic imposes.
On the other hand, the crisis has only reinforced the decline in VC deals that had started before the pandemic, according to the report.
In this regard, the report showed that VC investors began, amid the pandemic, to centre on so-called “mega-deals” to boost a select number of large firms rather than inject investments to a broader base of fresh start-ups.
The report expected that VC investments to take longer to recover, adding that the impact of this shortage in innovation finance will be uneven, with negative effects felt more heavily by early-stage VCs, by R&D — intensive start-ups with long-term research interests in fields such as life sciences, and ventures outside of the top VC hotspots.
“Indeed, current VC investments are concentrated in a few VC hot spots in the world, and only a few of those hot spots are in emerging economies — notably in China and India,” said the report.