GII ranks world economies according to their innovation capabilities. Consisting of roughly 80 indicators, grouped into innovation inputs and outputs, the GII aims to capture the multi-dimensional facets of innovation.
The report has stated that Nepal’s performance is at expectations for its level of development. “Nepal produces less innovation outputs relative to its level of innovation investments,” says the report. Among the lower-middle-income group economies, Nepal performs above the group average in two pillars—market sophistication and business sophistication. Among the seven pillars of GII, Nepal's score is better in market sophistication and weakest in human capital and research. Nepal’s dismal performance in the area of innovation is basically attributed to the lack of government attention to creating an environment conducive to fostering innovation and creativity in the country. In the fiscal year, the government allocated Rs 196.4bn ($1.6bn) to the Ministry of Education, Science and Technology which is a nine percent increase from Rs 180.4bn in 2021. This increment, however, is insufficient to ramp up activities in scientific and technological research, according to experts. Nepal remains among the countries with low funding in the areas of science and technology as a percent of GDP. Government funding in science and technology stood at a meager 0.45 percent of GDP in FY 2022/23. Nepal’s ranking in GII
| Year | Position |
| 2022 | 111 |
| 2021 | 111 |
| 2020 | 95 |
