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Connecting Dots 72 ◎⁃◎ 2026 Innovation Forecast

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Skiing with world freeride champion Lorraine Huber, Austria circa 2016

Connecting Dots is the monthly newsletter for innovation leaders by Brett Macfarlane.

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2026 Innovation Forecast

Introducing the Innovation Confidence Index (ICI)

I’ve long wanted to develop a leading indicator of innovation. The point is to help individuals set goals, prioritize investments and adjust capabilities to succeed.

A challenge is that innovation in action is as much intangible sentiments and behaviours as it is tangible inputs and outputs. However, most people spend most of their time only on the tangible technical factors, yet they report it’s the intangible factors that ultimately determine success or failure. 

Hence, in my work on the front lines of technology development and adoption, I’ve always looked for signals of increasing or decreasing innovation tolerance. By reading the climate, you can regulate expectations, resources, and decisions within your teams or in the wider organization. 

ICI create a comprehensive measure of innovation confidence by combining sentiment, outputs, and outcomes. As a single index, it can be compared year to year, by region or by industry using reliable economic data and reporting. 

ICI 1.0 - 2026 Executive Forecast

The good news is that innovation confidence is generally on the rise in 2026. That’s a preview of what you’ll find below, but first, I’ll properly introduce the index.  The analysis was done using Perplexity based on my conceptual model based on core economic principles, and the sources have been cross-checked, giving a strong reassurance of reliability. However, this is a prototype for discussion, not to base any investment decisions on until you do your own analysis.  

Understanding the Innovation Confidence Index (ICI)

The Innovation Confidence Index (ICI) is a composite economic indicator designed to measure the optimism of employees, leaders, and organizations regarding their ability to generate, implement, and be rewarded for new ideas. It also captures organizational capabilities, technology adoption, innovation activities, and macroeconomic signals that support innovation. The ICI serves as a leading indicator to track the health and momentum of innovation ecosystems over time.


Purpose of the Innovation Confidence Index

The ICI provides insights into the innovation climate by quantifying:

  • Employee and leader sentiment regarding innovation optimism and confidence.

  • Organizational capabilities and actual innovation behaviours (e.g., projects launched, patent activity).

  • Macro-level economic investments and outputs related to innovation (e.g., R&D spending, business confidence).

“More simply, the index combines attitudes, activities and outcomes to tell us how our innovation confidence is changing. ”

This index helps policymakers, business leaders, and researchers understand and anticipate trends affecting innovation productivity and economic growth.

 

The Working Out

For the economic wonks, what follows is the mathematical model and breakdown by regions globally, as well as an example of the province where I live.

What do you find insightful, useful, or irritating?

Questions and feedback to info@brettmacfarlane.com

Innovation Confidence Index (ICI) Data Sets: 2024–2026 Forecast


Region
2024 ICI
2025 ICI
2026 ICI (Forecast)

Global
60.0
62.0
62.3

USA
62.4
61.7
61.0–61.5

Canada
52.9
51.1
51.5–52.5

Europe
58.0
58.5
59.0

Interpretation

  • Global ICI: Shows a positive trend fuelled by widespread adoption of AI and digital tech, though tempered by economic uncertainties.

  • USA: Highest ICI, driven by large-scale innovation investment, leadership in technology sectors, but slight softness due to geopolitical and economic challenges.

  • Canada: Lower and more volatile ICI, reflecting challenges in scaling innovation outputs and fluctuating business confidence.

  • Europe: Moderate ICI with stable growth thanks to robust innovation policies and diverse industry strengths, poised for slight improvement.

Global Breakdown


Region
Year
(Sentiment)
(Behavior)
(Macro)
ICI Composite Score
Notes on Data Sources

Global
2024
58
61
61
60.0
World Bank, WIPO GII, global innovation surveys, R&D spend reports[1][2]


2025
60
62
64
62.0
High-frequency sentiment tracking, patent offices, OECD R&D stats[1][2][3]


2026f
61
63
63
62.3
Forecasts from global innovation outlooks, business sentiment reports[2][3]

USA
2024
65
62
60
62.4
US Census innovation surveys, National Science Foundation data, Conference Board business sentiment[4][5][6]


2025
63
61
61
61.7
R&D expenditure reports, AI adoption surveys, business confidence indexes[4][7][8]


2026f
62
61
61
61.0–61.5
Economic forecasts, tech investment outlooks, macroeconomic projections[8][9]

Canada
2024
50
55
53
52.9
Canadian Innovation Survey, StatsCan innovation data, Bank of Canada business outlook[10][11][12]


2025
48
53
52
51.1
GII Canada ranking, innovation outputs, business sentiment surveys[13][12][14]


2026f
49
54
52
51.5–52.5
Strategic Innovation Fund reports, economic forecasts, surveys[15][16][17]

Europe
2024
56
58
60
58.0
European Innovation Scoreboard, Eurostat, European business sentiment indices[18][19]


2025
57
59
59
58.5
European Commission reports, patent filings data, economic outlooks[18][20]


2026f
58
60
59
59.0
Policy outlooks, investment trend forecasts, innovation ecosystem studies[20]


British Columbia Innovation Confidence Index (2024-2026)

ICI for the Canadian province of British Columbia.

Pupulation: 5.7 million

GDP: $427B CAD / $305B USD / £230B GBP / €264B EUR

Comparable-sized economies: Finland, Greece, Nigeria, Portugal, New Zealand


Year
Sentiment (S)
Behavior (B)
Macro (M)
Composite ICI
Yearly Highlights

2024
49
52
51
50.7
Modest optimism amid economic challenges; investment in digital infrastructure begins

2025
47
53
50
50.0
Slightly softened sentiment due to global uncertainties; steady innovation programs maintained

2026f
48
54
51
51.0
Recovery signs with expanded AI initiatives and clean technology projects impacting confidence

Interpretation

  • BC’s innovation confidence remains stable around a mid-level range.

  • Innovation programs targeting AI and sustainability are key drivers of behaviour improvements.

  • Economic headwinds affect sentiment but investment continuity supports a mild rebound forecast.


Top 20 Industries in British Columbia: Innovation Confidence Index (2024-2026)


Clean Technology
58.0
59.3
60.0
BC’s cleantech leadership with strong government and private investment

Artificial Intelligence
54.5
57.7
59.7
Growing AI ecosystem, innovation driven by startups and policy

Software and IT Services
53.0
55.7
57.0
Mature digital sector with steady innovation advances

Biotechnology and Life Sciences
52.0
54.3
55.2
Health innovation and increasing R&D funding

Advanced Manufacturing
51.0
53.3
54.5
Industry 4.0 adoption growing

Financial Services
50.0
52.3
53.5
Fintech innovations supported by venture capital

Natural Resources & Mining
48.3
50.0
50.5
Sustainable resource management innovations

Professional Services
49.0
50.0
50.7
Adoption of AI and digital tools

Construction & Engineering
47.5
49.0
49.5
Smart and green building technology adoption

Transportation and Logistics
46.0
46.3
46.8
Electrification and supply chain digitization

Agriculture and Food Production
45.2
47.3
47.8
Emerging agtech applications

Educational Services
44.0
45.3
46.0
Growth in digital and remote learning innovation

Retail and Wholesale Trade
43.0
44.3
44.7
E-commerce and retail tech adoption

Tourism and Hospitality
42.0
43.3
43.8
Slow digital adoption, emerging customer experience innovations

Health Care Services
43.5
45.0
45.6
Expansion of telehealth and digital diagnostics

Arts, Entertainment and Recreation
41.7
42.3
43.0
Digital content production growth

Real Estate and Rental
40.3
41.3
41.9
Use of PropTech and smart building innovations

Information Media & Telecommunications
49.5
50.7
51.3
Expansion of data and cloud infrastructure

Public Administration
38.5
40.0
40.7
Digital transformation in government services

Waste Management & Remediation Services
39.0
39.7
40.2
Innovations in environmental tech and waste processing

Waste Management & Remediation Services
39.0
39.7
40.2
Innovations in environmental tech and waste processing

Summary

The Innovation Confidence Index offers a comprehensive, multi-dimensional lens on innovation momentum across geographies and industries.

  • Globally and across major regions, innovation confidence is generally on the rise, led by strong policy support and technology advances.

  • British Columbia maintains stable innovation confidence supported by focused investment in AI, cleantech, and digital sectors.

  • Sectoral breakdown highlights cleantech and AI as leaders within BC’s economic landscape with opportunities for growth in manufacturing, biotech, and professional services.

This analysis informs strategic decision-making for governments, businesses, and innovation leaders as they navigate evolving opportunities and challenges heading into 2026.

*This is a prototype and is only intended for discussion and exploration of your own models and interpretations.

 

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