Knowledge is expanding globally, yet most countries struggle to harness this growth effectively. Global innovation remains strikingly concentrated: a small number of leading economies account for the vast majority of scientific publications, patents, trademarks, and advanced exports, whereas most contribute less than 1 percent to any innovation dimension. Success does not require a big push in all fields, but instead lies in strategically diversifying into complex skills while at the same time maintaining intensity in high-value areas – a balancing act that only the most sophisticated innovation ecosystems have mastered.
Mapping the global innovation landscape
The Innovation Capabilities Outlook (ICO) 2026 analyzes 2,508 innovation capabilities across four dimensions – science, technology, entrepreneurship, and production – using comprehensive datasets spanning 2001–2023. The analysis reveals that innovation emergence depends critically on connections between these four dimensions, with the most sophisticated capabilities emerging only in highly diversified ecosystems able to support complex, interdependent knowledge networks.
A tale of two innovation worlds
Global innovation output has expanded dramatically, yet this growth remains highly uneven and concentrated in no more than 30 percent of the world's economies. Asian economies – led by China, India and Viet Nam – have mastered sophisticated capability development strategies, consistently achieving both smart diversification (gaining breadth and complexity simultaneously) and smart capability management (intensifying focus on high-value skills while protecting them with complementary knowledge). In contrast, many established and emerging economies struggle with this dual challenge: 46 percent of ecosystems have not meaningfully diversified, and complexity gains remain elusive for 70 percent of economies.
Strategic opportunities
The ICO 2026 identifies substantial untapped potential – only 10 percent of economies fulfill their technological potential. Ecosystems collectively underperform by 339,000 technological innovations annually. Regional patterns reveal distinct strategic pathways: Europe possesses strong foundations, but struggles with technological translation; Asia shows balanced capabilities, but faces entrepreneurial commercialization challenges; and Africa should focus on foundational capability building while gradually targeting more complex activities.
Policy implications
Innovation policy cannot rely on one-size-fits-all approaches. Success requires tailoring strategies to regional development levels, existing capability portfolios, and institutional contexts. Countries that align innovation investments with these evidence-based insights can break traditional development constraints and accelerate a transition toward knowledge-based competitiveness. The systematic nature both of diversification constraints and untapped potential suggests that targeted, level-appropriate interventions yield the highest probability of success.