The Global Innovation Index 2023 presents an intricate trend for Bangladesh’s innovation performance. In 2022, the country observed an upward trajectory in the ranking, displaying commendable advancements in innovation. However, there was a shift in the 2023 as Bangladesh slipped three positions indicating areas that require urgent attention.
Despite this setback, the country showed strength in certain aspects, including labour productivity growth, GDP per unit of energy use, and loans from microfinance institutions, placing it 7th, 14th, and 14th globally, respectively. Furthermore, gross capital formation and domestic market scale are also strong points for the nation. These strengths indicate a developing trend of efficient use of resources and an emphasis on productivity growth, which are promising signs for sustainable growth.
However, the GII 2023 report also illustrates key areas for improvement for Bangladesh. From the human capital and research perspective, indicators such as expenditure on education (1.83% of GDP in 2021; rank 122), graduates in science and engineering (11.15% of total tertiary graduates; rank 108), and pupil-teacher ratio in secondary education reveal a need for increased investments in the education sector to bolster the country’s human capital, which is a critical element for innovation. The reliance on microfinance institutions for loans represents an area with potential for development as it leaves much of the potential for growth in the hands of small-scale businesses that rely on these institutions for loans. Notably, despite these challenges, Bangladesh has shown substantial potential with respect to innovation inputs and outputs. In terms of innovation inputs, the top three universities have shown steady improvement with a rise of 8.65% over the year prior. Regarding innovation outputs, there were significant increases in the number of patents by origin and citable documents H-index. The Index also noted a considerable upturn in software spending, demonstrating the country’s growing interest in leveraging technology.
In comparison with other lower-middle-income economies and countries within Central and Southern Asia, Bangladesh falls below the average in several areas, including business sophistication, market sophistication, human capital and research, institutions, and knowledge and technology outputs. It indicates that while there are pockets of excellence, coordinated efforts are needed to improve the overall innovation environment and ecosystem, especially in comparison with peer countries.
Bangladesh’s performance in the creative outputs and infrastructure sectors also illustrates noteworthy observations. Ranking 82nd in creative outputs and 93rd in infrastructure, these facets suggest a relative strength in the use of intellectual property rights and the potency of the country’s foundational support for innovation.
However, weaknesses in certain sectors cannot be overlooked. For example, the low percentage of expenditure on education and graduates in science and engineering stresses the need for greater focus on strengthening the educational framework and promoting STEM fields that provide the vital foundation for innovative thinking and execution. Furthermore, indicators such as ICT services imports, environmental performance, and venture capital received value also highlight the need for advancement in technological integration, environmental consciousness, and investment attraction.
In assessing business sophistication, Bangladesh stands at a rank of 126, indicating the necessity of creating a more conducive environment for business operations. An increased focus on nurturing start-ups, building an enabling regulatory environment, and fostering ease of doing business could drive improvements in this area.
The innovation ecosystem of Bangladesh is shaped by both its strengths in the areas of labour productivity growth, GDP per unit of energy use, and loans from microfinance institutions, and weaknesses in education expenditure, representation in science and engineering, and business sophistication. With strategic planning and investment, Bangladesh has the potential to improve its rankings and create an environment that nurtures innovative ideas and practices.
