How Both the DII U.S. and DII Global Have Evolved in 2025: A Landscape of Volatility and Resilience

Like the preceding year, 2025 saw its share of economic, political and social change, all of which is reflected in the constantly changing Draper Innovation Indices. Russia’s ongoing war in Ukraine continues to destabilize the region, as waning U.S. support has seen Europe becoming increasingly involved while Israel’s operations in the Middle East have spilled over from Gaza to Lebanon, Syria and Iran. Alongside these conflicts, civil unrest has spiked in areas such as Sudan and Myanmar at the same time as tensions between India and Pakistan have resulted in small scale skirmishes and border conflicts have erupted between Thailand and Cambodia.

In South America, Argentina’s Javier Milei continues to fight against inflation and generate economic growth, supported by an October 2025 $20 billion currency swap with the United States.  While countries like El Salvador continue to benefit from an increased focus on cryptocurrencies and blockchain related investments, others such as Ecuador have dropped in the DII Global rankings due to economic headwinds.

In Europe, economies proved fairly resilient despite disruptions, with decent Gross Domestic Product (GDP) growth, headline inflation around two percent and declining unemployment rates. Poland was an unusual success story in 2025, with personal consumption driving  faster growth than in larger European economies like France and Germany. Spain also saw strong and somewhat unexpected economic growth in 2025, outpacing most European economies thanks to both domestic demand and a recovering tourism industry.

Political volatility was also a major theme of 2025 in Europe. France, for instance, saw a series of short-term minority governments appointed and quickly dissolved resulting in delays to policy and budgets.¹ Germany also experienced considerable political uncertainty, which resulted in their first snap election in February 2025 and ended with Friedrich Merz becoming Chancellor and leading the new government.²Domestically, the new United States administration has implemented multiple new policies including tariffs, which have seemingly upended traditional international trade and have begun to impact the cost of goods; its aggressive stance on immigration has impacted the agriculture and tourism industries. While the U.S. labor market was resilient during the first half of 2025, it has begun to show cracks.³Additionally, the significant rush of investments into data centers and Artificial

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¹https://www.lemonde.fr/en/les-decodeurs/article/2025/10/15/confused-by-french-politics-our-answers-to-the-questions-you-were-afraid-to-ask_6746446_8.html
²https://www.dw.com/en/german-election-results-explained-in-graphics/a-71724186
³https://www.nytimes.com/live/2025/12/16/business/jobs-report-economy

Intelligence (AI) has raised concerns of a potential bubble which could reverse recent stock market highs and lead to a potential recession.

The Federal Reserve’s continued work towards a soft economy landing involved three interest rate cuts in the last few months of 2025, with the most recent cut of a quarter-point (25 bps) in December 2025, to get the federal funds rate to a target range of 3.5%-3.75%.¹Personnel changes at major economic reporting agencies such as the Bureau of Labor Statistics as well as the recent government shutdown, the longest on record, resulted in mistrust and gaps in data reporting including a canceled October Consumer Price Index report, the first on record. Overall, the United States economy is both resilient and potentially vulnerable to a recession in 2026.

BizWorld will respond to our changing world by constantly reviewing and enhancing the DII Global and DII US, ensuring that relevant and accurate data points are collected, analyzed and properly integrated into their respective algorithms. For the DII US, one annual indicator, Small Business & Entrepreneurship Council’s Small Business Policy Index had not been updated in several years and has therefore been replaced with the Cato Institute’s US Economic Freedom Index.

The DII Global also made a major change, replacing one of its annual indicators with the Cato Institute’s Human Freedom Index, which ranks countries based on personal, civil and economic freedom. The Human Freedom Index aggregates 87 different metrics in areas such as Rule of Law; Security and Safety; Freedom to Trade Internationally; and Association, Assembly and Civil Society. This is a key addition to the DII Global at a time of global political uncertainty, as individual freedoms impact innovation, entrepreneurship and overall activity in the short- and long-term.

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¹https://www.federalreserve.gov/newsevents/pressreleases/monetary20251210a.htm

Data Centers, Artificial Intelligence, and This Decade’s Bubble

The meteoric rise of Artificial Intelligence (AI) – such as large-language models (LLMs) and other Generative AIs – has continued in 2025. Competition remains fierce, as OpenAI’s ChatGPT faces challengers such as Google’s Gemini, Anthropic’s Claude, xAI’s Grok, as well as Perplexity and DeepSeek. This has fueled demand for both chips and data centers; the rush for data center space has driven record breaking investments and raised significant bubble fears for investors across the world. Nvidia itself accounted for approximately 7% or 8% of the S&P 500’s total market value in late 2025,[1] and AI-related capital expenditures contributed 1.1 percent to GDP growth in the first half of 2025,[2] marking the first time consumer spending was not the primary contributor to GDP growth.

While most of the bubble fears currently revolve around data center investments, the sector’s significant contributions to economic growth and activity mean that a downturn could have global economic consequences. It already impacts other sectors. The cost of memory chips, for instance, has skyrocketed due to AI demand. Electricity and water costs have increased in areas near data centers; some residents report a 267 percent increase over the past five years.

MIT’s recently released “Iceberg Index” attempts to measure the overlap between AI technical capabilities and human skills; MIT estimates that AI is already able to replace as much as 11.7 percent of the labor market, which represents as much as $1.2 trillion in wages. This includes industries from finance to health car⁴.

While MIT’s “Iceberg Index” estimates that AI is poised to replace 11.7 percent of the labor market—representing $1.2 trillion in wages— from a BizWorld perspective this disruption is a mandate for educational evolution and future-proofing the next generation of entrepreneurs. As technical skills become increasingly commoditized by generative models, the uniquely human traits of entrepreneurship—critical thinking, adaptability, leadership, and resilience—become the new currency of the global economy. By equipping youth with these foundational skills, BizWorld ensures that the next generation is not competing against AI, but is instead prepared to harness it as a tool for innovation, securing their economic future in a landscape defined by rapid technological change.

While the economic growth and activity associated with data centers and AI has been unparalleled, many experts are drawing comparisons to the Dot-com bubble in 2001. Others have raised fears regarding the ongoing ‘circular financing’ associated with the AI industry, where organizations such as Nvidia help fund OpenAI, which in turn purchases Nvidia chips or data center buildouts. While this type of financing helps maintain momentum, it can also prop up artificial growth and hide true market demand^.4

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¹https://www.reuters.com/business/sp-500-notches-record-close-traders-turn-nvidia-results-2025-08-27/
²https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/on-the-minds-of-investors/is-ai-already-driving-us-growth/
³https://www.cnbc.com/2025/11/26/mit-study-finds-ai-can-already-replace-11point7percent-of-us-workforce.html
⁴https://builtin.com/articles/ai-circular-financing

Overall, as the nation continues to make significant strides in the development of AI models, significant risk surrounds data centers and the ability for chipmakers to keep up with supply demands and financial obligations. Driven largely by its competition with China, the United States remains committed to actively supporting this sector indicating federal support and assistance is likely to be implemented should private credit markets fail to keep this sector afloat.

Bitcoin and Cryptocurrency Trends in 2025: From Asset Class to Geopolitical Strategy

While the explosion of Artificial Intelligence and data center infrastructure defined much of the economic narrative in 2025, the cryptocurrency sector underwent a historic transformation. 2025 marked the transition of Bitcoin from a speculative asset to a recognized tool of statecraft and corporate treasury management, driven by aggressive U.S. federal policy and rising global adoption.

Bitcoin reached an all-time high of $126,000 in October 2025 before falling back down to between $85,000 and $90,000 in late 2025. In March 2025, the Trump administration established the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile in order to position the nation as a leader in digital assets while also using Bitcoin as a long-term store of value and likening it to ‘digital gold’.¹ Funded through criminal asset seizure and civil forfeiture, the U.S. Strategic Reserve currently holds an estimated $36 billion worth of Bitcoin.²

Following suit, Texas became the first state to create its own Strategic Bitcoin Reserve in 2025, with a $5 million purchase of Bitcoin.³ Internationally, countries such as India, Pakistan, Vietnam and Nigeria have joined the United States in prioritizing Bitcoin adoption.

In contrast, states lagging in this sector faced headwinds. For instance, North Carolina fell from 4th to 8th place in the DII US rankings specifically due to “weaker venture capital and cryptocurrency-related investment”. Conversely, Massachusetts surged to 11th place, fueled by robust growth in blockchain and cryptocurrency investments.

In the private sector, multiple companies – including Strategy, Tesla, and GameStop – have taken on significant Bitcoin holdings as part of their investment portfolios. The combination of the U.S. Strategic Bitcoin Reserve, new state-level entrants like Texas, and growing international adoption will likely lead to sustained investment momentum.  Looking forward, and most importantly, the definition of “innovation” within the Bitcoin ecosystem is shifting from technical protocol upgrades to systemic economic integration and high-level statecraft. 2025’s defining breakthrough was the U.S. Strategic Bitcoin Reserve, a policy innovation that formally reclassified the cryptocurrency from a speculative instrument to a “long-term store of value” and

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¹https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/
²https://www.forbes.com/sites/jillgoldenziel/2025/10/18/15-billion-bitcoin-seizure-raises-questions-for-trumps-crypto-reserve-strategy/
³https://www.texastribune.org/2025/12/08/texas-crypto-currency-investment/

“digital gold” essential to national interests. This move validated Bitcoin as a critical component of modern financial infrastructure, spurring “fintech policy adoption” that directly altered the global innovation landscape; nations like El Salvador and states like Massachusetts saw their DII innovation rankings climb specifically due to their embrace of blockchain-related investments and legal frameworks. Furthermore, governance innovation accelerated at the sub-national level, with Texas pioneering the first state-level Strategic Bitcoin Reserve, creating a novel template for public treasury management that prioritizes digital asset accumulation over traditional fiat savings.

DII Global Annual Review

DII Global Shifts in Top 20 Ranks

Within the DII Global top 20, the top four countries remained consistent over the past year: the United States in first place, followed by the United Kingdom, Switzerland and Canada. As seen below, Sweden and Singapore both declined by two places, while Denmark, Australia and Finland rose in the Top Ten and the Netherlands rose into the             DII Global Top Ten. New Zealand fell out of DII Global Top Ten.  Cryptocurrency and fintech policy adoption, overall venture capital investment, and venture capital investments in AI, Machine Learning, and cryptocurrency were major factors in most ranking gains and losses, along with general currency performance.

Outside of the Top Ten, South Korea rose from 17^th place to 11^th due to rising venture capital investments. Norway, on the other hand, fell from 14^th to 18^th due to its adoption of a wealth tax. Other declining countries included Estonia (from 13^th place to 17^th), France, and Germany. Chile fell out of the DII Global Top 20.

Germany saw a tumultuous 2025, first breaking into the DII Top Ten thanks to a strong updated Democracy Index reading from the Economist Intelligence Unit, before slowly slipping back down to 14^th on weak economic and venture capital investment performance. Ireland rose from 16^th place to 13^th due to rising venture capital investment and an improved World Uncertainty Index Score. Finally, Luxembourg broke into the DII Top 20, rising from 23^rd place to 16^th due to increases in venture capital and foreign direct investment.

DII Global Largest Gains and Declines

Looking beyond the Top 20, Dominica saw the largest improvement, jumping 38 places to 70^th, followed by Paraguay moving 30 places to 82^nd and El Salvador 29 places to 120^th. Dominica’s rise was largely due to a significantly improved venture capital momentum; El Salvador and Paraguay’s drivers are highlighted below in the South America Highlight. Other notable improvements were seen in:

• Zimbabwe, where an improving Human Development Index and Democracy Index enabled it to climb to 184^th;
• Mongolia which jumped 26 places on both an improving Human Development Index and venture capital momentum;
• Montenegro, which rose 24 places due to venture capital momentum and the inclusion of Cato’s Human Freedom Index; and
• Suriname, which also rose 24 places due to improvements on its Heritage Economic Freedom and Democracy indices.

Belize and Gambia were both able to climb by 20 places to 77^th and 147^th, respectively, with Belize benefitting from improvements in CATO’s Human Freedom Index and Heritage’s Economic Freedom Index offsetting slowing venture capital momentum while Gambia rising thanks to growing venture capital momentum and improvements in its Human Development Index. Saint Vincent was close behind, improving by 19 places due to its improving Human Development Index score and rising venture capital momentum.

The largest declines included:

• Mexico, which fell from 100^th place to 131^st due in large part to U.S. State Department Travel Advisories;
• Kuwait, which fell by 25 places due to declining venture capital momentum and a lower Democracy Index score;
• Turks and Caicos fell by 25 places due to declining foreign direct investment as a percentage of GDP;
• Malta, which fell from 21^st place to 40^th as a result of the Cato Institute’s Human Freedom Index replacing World Capital Flows;
• Sint Maarten, which also fell by 19 places due to declining foreign direct investment as a percentage of GDP; and
• Taiwan, which fell from 27^th place to 45^th as a result of multiple factors.

Bolivia (160^th), Puerto Rico (127^th), and Samoa (112^th) each suffered declines of 17 places, weighed lower due to a combination of CATO’s Economic Freedom Index and falling venture capital momentum. Macau followed close behind, dropping 16 places from 92^nd to 108^th with poor comparative performance across a number of indicators.

South America Highlight

Several South American countries saw significant improvements over the past year. Paraguay jumped thirty places – from 112^th in 2024 to 82^nd in 2025 – thanks to strong currency performance and rising AI/Machine Learning-related investment. Following its adoption of Bitcoin as legal tender (and an improving U.S. State Department Travel Advisory ranking), El Salvador rose from 149^th to 120^th.

Argentina rose by 17 places after Javier Milei’s dramatic economic reforms; it benefited from declining inflation and an improved Economic Freedom score. Honduras rose by nine places to finish 164^th overall, while Uruguay rose by seven places to 34^th. A few countries saw year-over-year declines; Ecuador fell by 13 places to 133^rd overall due to a declining Democracy Index score. Venezuela also continued its downward trend, falling 14 places to 213th amid renewed political instability and U.S. interventions.

Other Notable Movements

While Russia still faces significant sanctions, the United States has begun to ease some pressures in order to facilitate peace talks. However, continuing sanctions and Russia’s continuing war in Ukraine have pushed it further down the DII Global rankings: from 209^th at the end of 2024 to 216^th as of December 2025.

China also fell over the past year, from 60^th place to 73^rd. This was a consequence of relative weakness in three main areas: foreign direct investment, venture capital momentum, and AI/Machine Learning-related investment. Turkey also slipped – in its case from 119^th place to 132^nd – due to the impact of high inflation.

After a year of ups and downs, Japan finished one place lower at the end of  2025 compared to year end 2024; it fell from 18^th place to 19^th due to its fluctuating currency performance which offset small improvements in its Democracy Index and AI/Machine Learning-related venture capital investment.

Jamaica, which experienced some similar currency issues, offset that weakness with venture capital investment growth and a strong improvement in its Democracy Index; it rose from 134^th place in December 2024 to 122^nd in December 2025. Saudi Arabia rose by 11places, finishing 106^th, thanks to a stronger Human Development Index from the United Nations Development Programme. At the same time, Malta declined from 21^st to 40^th due to CATO’s Human Freedom Index replacing strong capital flows data.  

As of December 2025, the bottom ten nations on the DII Global included:

• Ethiopia
• Myanmar
• Sudan
• Yemen
• Eritrea
• Burundi
• Chad
• Central African Republic
• South Sudan
• North Korea

DII US Annual Review

Shifts in DII US Top 20 Ranks

As previously discussed, the second Trump administration has implemented new economic policies in the United States. For instance, the regulatory environment has eased up, allowing for increased economic activity. New tariff policies, on the other hand, have affected multiple industries and have begun to impact costs of goods for consumers.

This national-level volatility has led to rises and falls across the DII US. Looking at the Top Ten, Florida was able to hold onto 1^st while New Hampshire saw considerable improvement due to the replacement of the Small Business Policy Index with CATO’s Economic Freedom Index; it rose from 9^th place in December 2024 to 2^nd in December 2025, overtaking Utah for 2^nd place.  Declines within the Top Ten included:

• Texas, which fell from 3^rd place to 5^th due to weakening business formation metrics (U.S. Census Bureau Business Formation Statistics);
• North Carolina, which fell from 4^th place to 8^th due to weaker venture capital and cryptocurrency-related investment;
• Arizona, which fell by one place to 7^th; and
• Virginia, which also fell one place to 9^th.

Climbers, on the other hand, included:

• Wyoming, which finished 6^th thanks to business formation metrics and a strong performance on the Cato Institute’s Economic Freedom Index; and
• Washington, which broke into the Top Ten thanks to venture capital investment growth and business formation.

Moving into the Top 20, Massachusetts  rose from 22^nd place in December 2024 to 11^th in December 2025; this rise was fueled by growth in overall and cryptocurrency/blockchain-related investment. After a rapid rise in 2024, Idaho fell from 11^th place to 12^th in 2025. Georgia also fell by one place, from 12^th to 13^th. Nevada fell from 10^th place to 14^th due to weak new business formation.South Dakota, which peaked at 6^th place in early 2025, finished 15^th as a consequence of below average venture capital investments and business formation metric performance; despite this decline, South Dakota still registered a net improvement of 3 places over 2024. While Delaware fell from 7^th to 17^th due to consistently weak venture capital investment, Alaska benefitted from the inclusion of CATO’s Economic Freedom Index helping push it from 24^th to 16^th. North Dakota (18^th), Michigan (19^th), and Tennessee (20^th) rounded out the final three of the Top 20 as of December 2025; with North Dakota seeing healthy venture capital investments allowing it to improve 14 places over the past year.

DII US Largest Gains and Declines

North Dakota, Wyoming and Illinois had the largest gains between December 2024 and December 2025; all three states rose 14 rankings in the DII US Balanced rankings. Illinois in particular benefited from strong business formation metrics over the past year.

Other states with significant improvements included:

• Massachusetts and Pennsylvania, which both rose by 11 places;
• Connecticut, which rose by 10 places; and
• Alaska and Minnesota, which rose by eight places.

Indiana, on the other hand, experienced the largest year-over-year drop, falling by 12 places to 25^th overall in the DII US. New York fell by 11 places to 47^th and Delaware dropped out of the Top Ten, ending in 17^th place. New York suffered from a poor score on the newly added Cato Economic Freedom Index, while Indiana saw weak monthly indicators in multiple areas. Other falling states included:

• Oregon and South Carolina, which both fell by nine places;
• Ohio dropped eight places;
• California, Iowa and Maryland, which each fell by seven places; and
• Maine, which fell by six places.

Like New York, California did not perform well on the Cato Institute’s Economic Freedom Index. The other states saw general weakness in business formation and venture capital investment metrics.

BizWorld Looking Ahead: Building Resilience in a Volatile World

The 2025 landscape, defined by the oscillating fortunes of Bitcoin, the disruptive potential of Artificial Intelligence, and shifting geopolitical alliances, presents a unique challenge for the future. As the Draper Innovation Index (DII) tracks the rise and fall of nations—from the strategic crypto-reserves of the United States and El Salvador to the resilience of economies like Poland and Vietnam—it reveals a world where adaptability is the ultimate competitive advantage.

In this environment, BizWorld’s mission extends beyond measurement to empowerment. The volatility inherent in today’s crypto markets and the labor disruptions forecasted by the AI “Iceberg Index” underscore an urgent need for the entrepreneurial mindset. By equipping the next generation with the skills to navigate uncertainty, evaluate risk, and lead with ethical courage, BizWorld is not just preparing youth for the future economy—we are helping them shape it. As we look toward 2026, the DII remains our compass, but our students remain our hope, ready to transform global challenges into opportunities for innovation and growth.