Innovation is a multidimensional force encompassing various facets of human endeavor across economies and industries. Yet global innovation remains strikingly concentrated: a small number of leading economies account for the vast majority of advanced exports, trademarks, patents, and scientific publications, while most countries contribute less than 1 percent to any of these innovation dimensions (see Figure 1.1). Such a concentration reveals the existence of barriers preventing most economies from meaningfully participating in the global innovation system.
Innovation capabilities can help answer this challenge. They represent the demonstrated ability of economies and organizations to create competitive advantage in fields such as artificial intelligence or clean energy. These capabilities serve as the fundamental building blocks of innovation and, in addition, they help identify which economies excel in certain areas while revealing gaps and weaknesses elsewhere. For this reason, assessing capabilities across science, technology, entrepreneurship and production is essential for evidence-based policymaking.
Yet many ecosystems struggle with imbalances between their innovation activities. Some economies excel at producing internationally recognized scientific research, but struggle to transform discoveries into commercial applications. Others contribute significantly to international production, but fail to develop the technological learning that drives innovation. Still others master individual technologies, but cannot scale them globally.
These mismatches are both a challenge and an opportunity. Economies with unbalanced capability portfolios can benefit greatly from strategic guidance on where to focus limited resources to clear innovation roadblocks.
Understanding these patterns empowers policymakers to make informed decisions about building more integrated and effective innovation ecosystems.
Four dimensions reveal patterns in the innovation landscape
The outlook spans 2,508 distinct fields across four dimensions. Innovation ecosystems possess capabilities in these fields when they demonstrate sufficient specialization or output (see Box 1.1).
Production – 862 fields. Manufacturing capabilities and scaling innovations from laboratory to market, encompassing advanced manufacturing, industrial processes, quality systems, and supply chain innovation.
Entrepreneurship – 538 fields. Commercialization and market-oriented activities including venture creation, business model innovation, technology transfer, and ecosystem development.
Technology – 480 fields. Applied research and development (R&D) focused on practical solutions, including information technology, biotechnology, materials science, and engineering applications.
Science – 628 fields. Fundamental research and knowledge creation across physics, chemistry, biology, mathematics, and so on.
Granular classification (see Table 1.1) enables detailed analysis of specialization patterns, capability gaps, and emerging innovation areas across different regions and economies.
The report measures innovation capabilities using four complementary datasets that capture the industrial, entrepreneurial, technological, and scientific dimensions of innovation. The analysis covers the period 2001–2023 at economy and field levels. While this economy-level focus enables global trend analysis, innovation policy design may require more disaggregated analysis at the regional, cluster and city levels. The timeframe, though substantial, may not capture complete innovation cycles which can span decades from initial research to market implementation.
International trade data
Production capabilities are assessed through manufactured exports using the UN COMTRADE database, tracking distinct product fields grouped into production domains. The focus on internationally traded products ensures a minimum threshold of competitiveness and innovation content, as products must meet international market standards.
International trademark data
Entrepreneurial innovation is captured through international trademark filings from the WIPO Global Brand Database, covering granted applications across multiple jurisdictions. Rather than relying solely on the Nice Classification system, the analysis employs clustering algorithms to identify innovation fields that better reflect actual market and technological relationships. This provides more nuanced insights into entrepreneurial activities and commercialization patterns.
International patent data
Technological advancement is measured through international patent families, combining data from World Intellectual Property Organization (WIPO) patent databases and the European Patent Office (EPO) PATSTAT. Analysis focuses on first filings of granted patent families that sought protection beyond the applicant's economy of origin, ensuring international relevance. Patents are classified using 4-digit International Patent Classification (IPC) codes, providing detailed technological categorization. Economytem assignment is based on inventors' addresses.
Scientific publication data
Scientific progress is captured through the OpenAlex database, focusing on publications indexed in Scopus. To ensure quality and impact, the analysis concentrates on the 10 percent most cited papers. Scientific publications are grouped into innovation fields using clustering algorithms that identify thematic relationships. Economies are assigned publications based on authors' institutional affiliations.
Innovation capabilities vary in complexity
Whereas some capabilities can flourish in specialized economies, the most sophisticated innovation capabilities – such as advanced biotechnology, quantum computing or next-generation artificial intelligence – emerge only within highly diversified innovation ecosystems. These complex capabilities are inherently interdependent, requiring a dense web of supporting capabilities, institutions and knowledge domains to function effectively. Economic complexity methodology helps to quantify the extent of capabilities that need to be present within an ecosystem.
Complex capabilities cannot simply be transplanted or developed in isolation. When economies attempt to leapfrog into complex capabilities without first building the necessary foundation of related knowledge and supporting infrastructure, these efforts typically result in failed investments and unrealized potential. This complexity creates a natural hierarchy in the innovation landscape, where the most valuable and transformative capabilities tend to concentrate within ecosystems that have systematically developed broad, interconnected innovation foundations.
Power is in connections
Just as a symphony requires different instruments working in harmony, breakthrough innovations emerge when dimensions interconnect (see Figure 1.2). Strong science–technology links indicate effective translation of basic research into applied innovations. Robust entrepreneurship–production connections suggest efficient commercialization pathways bringing innovations to market.
Innovation ecosystems excelling at fostering interdimensional connections consistently demonstrate superior innovation performance. These connections facilitate knowledge spillovers, reduce transaction costs in innovation processes, and enable rapid capability recombination to address emerging challenges and opportunities.
Connections reveal ecosystem maturity
Connection strength indicates how developed an innovation system has become. Developing ecosystems often exhibit strong individual dimensional capabilities, but weak cross-dimensional linkages, limiting their ability to translate innovative potential into competitive advantage. Mature innovation systems demonstrate dense connection networks enabling rapid knowledge transfer and collaborative innovation across boundaries (see Figure 1.3).
Innovation capabilities are dynamic
Innovation capabilities evolve through investment, learning and strategic positioning within global knowledge networks. Understanding and strengthening these interdimensional connections represents a key strategic priority for innovation policy and investment decisions, because these linkages ultimately determine an innovation system's capacity to create value from its constituent capabilities.
The Innovation Capabilities Outlook maps these global knowledge networks, revealing where capabilities concentrate, how they evolve, and where the greatest opportunities lie.