Today, synergies between the state and private sectors continue to provide fertile ground for innovation. In Switzerland, the authorities have been highly proactive in creating a legal framework for big data blockchain technology and for corporate fundraising through Initial Coin Offerings (ICOs). As a result, 1,132 ICOs and Security Token Offerings (STOs) were successfully completed in 2018 in Switzerland, twice as many as in 2017. Big data, the sector to which blockchain belongs, is one of the seven broad sources for the current innovation wave we have identified: advances in the internet, automation, transport, energy, life sciences and smart materials.
Other parts of Europe risk missing the boat. Indeed, in part because of its inability to nurture big tech champions, Europe’s share of global GDP may well halve from 22% to 11% in less than 20 years, when the US will account for 25% and China 22% (double the current level), according to our analysis.
The latter two countries are leading the current innovation wave thanks to their capacity to transform start-ups into blue chips, epitomised by FAANG (Facebook, Amazon, Apple, Netflix and Google) in the US and BATX (Baidu, Alibaba, Tencent and Xiaomi) in China. The US in particular has a long track record of creating and sustaining innovation. In February, for example, President Trump ratified an executive order making the development and regulation of artificial intelligence a federal priority. But China is already a serious competitor in the contest for global technological supremacy — a hidden factor in the trade tensions between it and the US. According to the World Intellectual Property Organization (WIPO), China saw the sharpest rise in patent applications of any major economy relative to GDP in the 10 years to 2017 (chart 1).