AI driving up innovation investment, says UN

• Artificial intelligence is driving record corporate R&D spending and fuelling global economic growth, with innovation investment expected to reach US$3.4 trillion in 2026, outpacing GDP growth.
• Venture capital deals are fewer but larger, with AI making up 77% of VC deal value in early 2026, signalling strong focus on AI startups despite cuts in traditional sectors.
• Switzerland leads global innovation rankings for the 16th year, while China and India have risen significantly; top innovation clusters remain dominated by Asian and US cities.

GENEVA – Artificial intelligence is fuelling a rebound in investment in innovation, with corporate research and development spending reaching record highs, the United Nations said on Sept 29.

The UN’s World Intellectual Property Organisation said more money was going into venture capital (VC), even as the number of VC deals was shrinking and becoming increasingly concentrated on AI firms.

World Intellectual Property Organisation (WIPO), the UN patent and innovation agency, said AI was shortening the paths of discovery and fuelling much of the world’s economic growth.

“AI is not just a breakthrough technology; it’s going to change the way that we innovate and create,” WIPO chief Daren Tang told reporters.

“A new generation of deep-science start-ups is translating breakthroughs into products and transforming fields such as life sciences, space, robotics and clean energy.”

Tang said innovation investment had remained resilient in 2026 and was even “beginning to see growth again”.

Global research and development is expected to reach US$3.4 trillion (S$4.35 trillion) in 2026, growing faster than gross domestic product growth, while corporate R&D reached a record US$1.5 trillion in 2025, up 5.8%, said WIPO.

Venture capital’s AI focus

And while the number of venture capital deals dropped for the fourth straight year, their value rose by 28% to US$510 billion in 2025.

AI accounted for 53% of global VC deal value in 2025, and 77% in the first half of 2026.

“AI might reverse this productivity slump that we have seen for the last 15 to 20 years in high-income economies,” said Sacha Wunsch-Vincent, co-editor of WIPO’s annual Global Innovation Index.

If applied correctly, artificial intelligence would help every sector, he told reporters.

“The open question here really is how can we broaden this innovation spurt beyond this one technology only, which is currently mostly LLM (large language models). We see a lot of the traditional big R&D spenders – pharma, cars, construction – cutting back on their R&D spend,” he noted.

Tang said he hoped AI was “a rising tide that lifts all boats because... a healthy innovation ecosystem needs to be able to have strength in as many areas of technology as possible.”

Global country rankings

For the 16th consecutive year, Switzerland led the Global Innovation Index, which tracks innovation drivers in the world’s economies.

Sweden and the United States retained second and third place for the fourth year running, followed by South Korea and Singapore.

China has meanwhile shot up from 35th place in 2013 to 10th position, while India rose from 66th to 38th place during the same period, the report showed, also highlighting big jumps up by the likes of Vietnam, Turkey and the Philippines.

The top five innovation clusters remain unchanged in 2026, led by Shenzhen-Hong Kong-Guangzhou, followed by Tokyo-Yokohama, San Jose-San Francisco, Beijing and Seoul, the report showed.

Further down, Osaka-Kobe-Kyoto and Paris overtook Los Angeles, which dropped two places to 12th.

Most of the big risers were in China, with Ningde the most prominent, up 24 places to 75th.

Outside China, Miami rose six places to 61st, while Chennai climbed five places to 79th.

The biggest fallers were Pittsburgh and Oxford, which both dropped eight places to 84th and 85th, respectively. AFP