Technology and talent Technology and innovation are among the most relentless drivers of competitiveness. The efficacy with which countries and industries harness fast-changing technologies – such as artificial intelligence (AI), robotics, internet of things (IoT) and blockchain – will play a major role in determining their competitive edge over the coming years. The most competitive economies tend to host the world’s top research ecosystems, generate the most patents and cultivate vibrant innovation hubs.33 It is not just invention that matters, however – diffusion is critical too. The global innovation frontier is broadening, and its geography is shifting. Asia now accounts for nearly half of global research and development (R&D) spending (up from 25% in 2000).34 Yet overall, innovation remains highly concentrated. Despite having nearly tripled between the 2000s and 2023 to reach $2.75 trillion, more than 80% of global R&D spending still comes from just 10 economies.35 Diffusion gaps within countries can also exert a significant drag on competitiveness. Even in top innovators, many small businesses lag in adoption of advanced technologies.36 The OECD (Organisation for Economic Co-operation and Development) estimates that bridging these gaps in technology and knowledge diffusion between frontier and laggard firms could add nearly 6% to aggregate labour productivity.37 The World Economic Forum’s Future of Jobs Survey likewise finds that 60% of employers expect wider digital access to be a leading driver of business transformation by 2030.38 However, the competitiveness payoff from technology is not automatic. Talent and infrastructure are essential for translating innovation potential into real business impact. With nearly 40% of skills expected to be transformed or obsolete by 2030,39 the ability to attract, retain and nurture talent who can develop and apply new technologies creatively will be critical, both at the firm level and for economies as a whole. Demographic trends and the growing restrictiveness of migration policies will exacerbate this challenge. While advanced economies grapple with ageing populations and shrinking workforces, many developing economies could benefit from a demographic dividend. However, a larger workforce only becomes a competitive asset when it is skilled, dynamic and resilient. In many middle- income economies, under-investment in the accessibility and quality of education has held back development.40 If left unaddressed, these human capital gaps will constrain future competitiveness. A large workforce only becomes a competitive asset when it is skilled, dynamic and resilient. Global Economic Futures: Competitiveness in 2030 11

Global Economic Futures Competitiveness in 2030 2025