In this article, we take a look at the 25 most developed countries in the world. You can skip our detailed analysis of the state of technological development in different countries and go directly to 5 Most Developed Countries in the World.
There’s a positive correlation between GDP per Capita and technological innovation, with high-income developed countries taking the top rankings in innovation. However, a notable exception to this is the Gulf countries, which can be thought of as an example of resource curse — the idea that countries rich in natural-resources often lag behind in innovation to drive economic growth.
Knowledge and Technology Intensive Industry
According to the National Science Foundation, 31% of the world's economic output is produced by industries that heavily incorporate new knowledge and technical advancements into their production. They’re mostly concentrated in the developed world, with 15 developed economies alone responsible for 76% of global output in Knowledge and Technology Intensive (KTI) Industries.
Many developed countries are therefore in a natural race to innovate and extract economically viable and practical applications from promising high technologies that are currently in the research phase, to gain geopolitical as well as economic advantages.
IT Domination
When it comes to high technology, it is increasingly dominated by the IT sector and the behemoths that dominate this sector include companies like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:META) and Apple Inc. (NASDAQ:AAPL).
According to data from Statista, the information technology and digitally transformed enterprises constitute 45% of the global GDP in 2022. It is thanks to the exponential increase in the number of transistors that could fit onto a chip, bringing down cost while increasing computing power. However, this trend is set to reach its end in the near future, as transistor sizes approach atomic scale, a fundamental barrier.
Decline and stagnation in many technological areas notwithstanding, some of the technological fields are relatively still progressing rapidly and many countries are spending billions of dollars to get ahead in these technologies. According to the 2021 Global Startup Ecosystem Report, the four fastest growing technological industries include Blockchain, Robotics, Artificial Intelligence and New Food.
Innovation in AI is also one of the key competitive battlegrounds between many of the advanced economies like the US and fast-growing economies like China. So which ones are the technologically most developed countries in the world? We’re set to find out.
Our Methodology
For our list of the 25 most developed countries in the world, we’d be ranking them based on our core metric — the percentage of GDP taken up by R&D relative to GDP size.
Bear in mind though that there’s a lot of nuance involved with the ranking. For instance, a country with a better performing KTI output may rank over one with a higher R&D share of GDP but with a lower performing KTI output.
We’d be using data from the World Bank for R&D spending and GDP, and National Science Foundation for KTI outputs for the top countries. We’d also be using data from World Intellectual Property Indicators 2021 for patents.
25. Luxembourg
R&D Spending : 1.1%
Luxembourg is a country in western Europe. Its economic size in 2021 was $87 billion and R&D spending was 1.1% of the GDP but it has consistently declined since 2003. It has to do with the fact that Luxembourg's economy heavily weighs around the financial sector. Therefore, private R&D spending is only 0.6% compared to the EU’s average of 1.5%. However, the small private spending is offset by public spending through higher education.
Some of the top technology companies operating in Luxembourg include Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT).
24:New Zealand
R&D Spending : 1.4%
New Zealand has a GDP of $250 billion as of 2021. That means the country’s R&D spending is over $2 billion. In 2021, 330 patent resident-applications were filed in the country.
The first half of 2021 saw 78% increase in early-stage investments from the first half of the previous year in New Zealand. High technology startups took 42% of this investment according to PwC.
The country is perhaps best known for Rocket Lab, an aerospace manufacturer that was founded in New Zealand.
23. Hong Kong (S.A.R, CHINA)
R&D Spending : 1%
Hong Kong spent 1% of its GDP on Research and Development in 2020, with a 2020 GDP size of $345 billion. In 2021, 3,261 patents were filed by residents of Hong Kong.
Major tech companies have a footprint in Hong Kong. Most prominent of these include Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:META).
22. Australia
R&D Spending : 0.5%
Australia reserves its spot among the most developed countries in the world. However, their spending in R&D is the lowest on the list. But given that the size of the economy is $1.7 trillion, 0.56% is still substantial. In addition, their KTI industries for medium-high-R&D makeup 3.8% of their GDP.
The country has a high-skill workforce and its technology sector is worth $167 billion as of 2021. There’s a lot of high-tech companies to be found in Australia. It is home to the prominent Atlassian Corporation (NASDAQ:TEAM), which commands a market cap of $65 billion.
21. Singapore
R&D Spending : 1.9%
Singapore is an island country in Southeast Asia. It spent 1.9% of its $375 billion GDP in 2019 in Research & Development. Despite its small size, Singapore is technologically competitive, with over 2,000 patent applications filed by residents in 2021.
It is also using technologies like driverless taxi systems, patrolling police bots and smart homes at scale. According to a Reuters report, Singapore has 605 bots for every 10,000 human workers in the manufacturing industry.
20. Norway
R&D Spending : 2.3%
Norway is a Northern European country in the Scandinavian region. It is home to many tech companies, with the most prominent being the telecommunications giant Telenor ASA (OSLO:TEL.OL). Norway spent 2.3% of its 2020 GDP of $362 billion on Research & Development. As far as patents go, close to 1,600 patents were filed by residents in the country.
19. Finland
R&D Spending : 3%
Finland spent 3% of its GDP on Research & Development in 2020. Its overall GDP in the year was $272 billion. The country maintains a technological edge with a highly skilled working population. It had over 3,600 patent applications from residents in 2021.
Apart from having foreign tech giants like Alphabet Inc. (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL), Finland is home to its own native companies like Nokia Oyj (NYSE:NOK).
18. Denmark
R&D Spending : 3%
Denmark spent 3% of its 2020 GDP of $352 billion on pursuing R&D. It had over 3,700 patent applications from residents, of which roughly 1,414 were granted.
Insofar as native tech companies go, Denmark is best known for IO Interactive, the developer of Hitman video-game series.
17. Austria
R&D Spending : 3.2%
Austria is situated in Central Europe. The country’s 2020 expenditures for R&D were 3.2% of its GDP whose size amounted to $433 billion in the same year. It had 4,427 patent applications from its residents in 2020.
16. Belgium
R&D Spending : 3.8%
Belgium is among the technology-frontier countries, with 3,285 patent applications from residents in 2021, given a population of only 11.5 million people. Its R&D expenditures, which have doubled since 1996, were 3.8% of its GDP of $522 billion in 2020.
Some of the most prominent Belgian companies include Barco NV (OTCMKTS:BCNAF), an imaging technology developer, Larian Studios, a video game developer known for Divinity series, and Option, a wireless technology company.
15. Israel
R&D Spending : 5.4%
Israel is located in the Middle East. Its 2020 R&D expenditures amounted to 5.4% of its then $407 billion economy which grew to $481 billion in 2021.
Given a small population of only 9 million, Israel still managed to have 1,592 patent applications from residents in 2021. Israel is also known for some technology companies making the headlines. A notable one is NSO Group, known for the spyware Pegasus.
14. Russia
R&D Spending : 1.1%
Russia has a GDP of $1.7 trillion as of 2021. It is known for some major companies like Yandex. Russian aerospace and military technology is also often cutting edge. The country has already mastered hypersonic technology while the US is still struggling to transition from the experiment phase.
Its S-400 Triumf, an air defense system, has also been described by Stratfor as the best air defense system in the world. It was developed and manufactured by state owned companies Almaz Antey and Fakel MKB.
13. Sweden
R&D Spending : 3.5%
Sweden is located in the Scandinavian region of Northern Europe. It is the fourth Scandinavian country to make it to the list of 25 most developed countries in the world. The country has a highly educated workforce and a knowledge-based economy. In 2021, close to 7,000 patent applications were filed in the country. Sweden’s R&D spending accounted for 3.5% of its $541 billion GDP in 2020.
12. The Netherlands
R&D Spending : 2.3%
Located in Northwestern Europe, the Netherlands is one of the most developed countries in the world. The country’s R&D expenditures for 2020 were 2.3% of the $913 billion of their then GDP. Nearly 70% of The Netherlands’ economy is driven by services, a heavily digitized sector, while 18% of it is driven by manufacturing industry.
Patents-wise, the country had over 8,600 patent applications from residents, almost half of which were granted.
11. Switzerland
R&D Spending : 3.1%
Switzerland, officially known as the Swiss Confederation, is usually known for banking and the Alps. Their technological prowess on the other hand often goes unacknowledged in popular discourse. Switzerland is home to some of the largest niche-technology firms like SITA, which develops technology for airport operations, and Logitech, a computer-peripherals and software developer. The country's 2019 GDP of $752 billion related to 3.1% in R&D expenditures.
10. Taiwan
R&D Spending : 3.6%
Taiwan is located in Southeast Asia. Taiwan’s 2021 R&D expenditures accounted for 3.6% of its $775 billion GDP for the same year.
It is best known for Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world’s largest semiconductors foundry, accounting for a 53% global market share. It is currently pushing towards the 3 nm fabrication process and is expected to mass-produce 2 nm chips by 2025, taking Moore’s Law to its limits.
9. Italy
R&D Spending : 1.5%
Italy had an R&D spending of 1.5% of its 2020 GDP of $1.9 trillion. The country has an active tech scene, with major tech companies like Apple Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) operating there. In 2021, over 15,000 patent applications were filed in Italy by residents.
8. Canada
R&D Spending : 1.7%
Canada is one of the most technologically developed countries in the world. It spent 1.7% of its $1.6 trillion economy in 2020 on KTI industries. Residents filed 4710 patent applications in the country in 2021. Canada had a KTI industries’ output of 6.8% between 2019 and 2020 according to the Canadian ICT Sector Profile 2020.
Information technology is the major high-tech industry in Canada, with Shopify Inc. (NYSE:SHOP) being the biggest Canadian technology company.
7. The UK
R&D Spending : 1.7%
The United Kingdom spent 1.7% of its 2019 $2.8 trillion GDP on R&D. It increased by $2.5 billion in 2020 to $73 billion in total expenditures. The largest proportion of this expenditure was the business sector, at 71%, followed by the higher education sector at 22% according to the UK’s Office for National Statistics.
The UK accounted for 3% of global KTI production in 2019, which was the sixth highest in the world. Moving on, 17,000 patent applications were filed in the country by residents in 2021. Its prominent technology companies include Endava plc (NYSE:DAVA), The Sage Group plc (OTCMKTS:SGPYY) and AVEVA Group plc (OTCMKTS:AVEVF) among others.
6. France
R&D Spending : 2.3%
France is home to some major tech companies in the world. These include companies like Atari SA (PONGF), a video game holding company and Dassault Systèmes (OTCMKTS:DASTY), a software developer for 3d printing.
France spent 2.3% of its 2020 GDP of $2.63 trillion on Research & Development. In 2021, the number of patent applications that were filed by residents amounted to over a whopping 24,000.
