World's most innovative nations: India at No.6!

The report indicates a 'balanced' perception of the environment for innovation in the country, with respondents more satisfied with private investment and government support for innovation.

The report, based on a survey of 2,800 senior business executives in 22 countries, including 200 respondents in India.

It identifies the top enablers for innovation in the country as talent ('creative' talent and people with technical expertise), financial support from public authorities and long-term support from investors.

Click NEXT to find out more about the world's top innovation champions and their economic status...

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1. United States

Innovation champion: 63% of global respondents agreed.

The economic recovery should continue at a modest pace, with 2012 GDP growth just over 2 per cent, rising marginally in 2013.

Weak real estate and labour markets, and ongoing private sector deleveraging are the main headwinds.

The corporate sector is in strong health and cash rich, but uncertainty about domestic and foreign demand and about the longer term fiscal outlook are holding back investment, says GE's Innovation Barometer.

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2. Germany

Innovation champion: 48%

The GDP growth will slow down to less than 1 per cent next year, with the decline in the unemployment rate coming to a standstill.

The deterioration of the growth outlook in the Eurozone, with confidence and the financial sector being the main victims of turmoil in sovereign debt markets, are behind the slowdown.

Germany however maintains an impressive competitive advantage, in terms of both productivity and positioning in the right products and markets. Growth should rise to about 2 per cent in 2013.

Image: Senft, who is also a cycling fan better known as 'El Diablo' from the Tour de France, built the vehicle from an East German Trabant car and dedicated the pedicab to the wedding of Britain's Prince William and Kate Middleton.

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3. Japan

Innovation champion: 43%

Japan's GDP growth should return to a moderate 2-3 per cent in 2012-14 following a -0.7 per cent drop in 2011 caused by the March earthquake and tsunami.

The reconstruction efforts both in the government and private sector and strong demand from emerging markets, will be the major growth drivers.

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4. China

Innovation champion: 37%

China's GDP growth should remain close to 9 per cent through 2012-2013, then drop to 7-8 per cent.

While real estate prices and excess investment pose risks to local governments and banks, neither is likely to trigger a hard landing.

Authorities have plenty of policy firepower to address economic issues. A change of political leadership in late 2012 gives local politicians incentives to maintain strong growth.

5. South Korea

Innovation champion: 13%

South Korea's economic growth is expected to be between 3.5 and 4 per cent over the foreseeable future, still strong but below the overheated growth seen over the past several years.

Investment incentives are in place for companies engaged in high tech activities. These incentives include long term lease of land and cash grants plus tax exemptions, discounts and deductions.

Corporate income tax is waived 100 per cent for the first five years and 50 per cent thereafter for certain types of high tech foreign direct investment.

6. India

Innovation champion: 13%

India's GDP growth is likely to be above 7 per cent in next 3 years and about 8 per cent by 2015, with inflation remaining high over the next 2-3 years.

The economic growth has slowed largely due to previous monetary tightening, and weak political leadership has caused a further dent in foreign investors' confidence.

Domestic demand is robust, and infrastructure investment will need to accelerate given emerging capacity constraints.
Research and development expenses are fully tax deductible.

Only 12 per cent of the global respondents identified India as one of the top three innovation champions, compared to 23 per cent of Indian respondents.

In terms of sectors, energy, followed by healthcare, telecommunication and FMCG, were the areas with the most innovation-driven growth potential, according to the survey.

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7. United Kingdom

Innovation champion: 9%

The United Kingdom's outlook for 2012 is weak due to continued fiscal retrenchment, private-sector deleveraging, stagnant housing market, tight credit availability, rising unemployment and a deteriorating external environment.

Growth should be about 1 per cent, recovering to about 2 per cent from 2013 onwards.

Research and development incentives for large companies are in the form of tax credits.

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8. Sweden

Innovation champion: 6%

Though economic growth in Sweden was stronger than the rest of Europe in 2010 and 2011, forecasts for 2012 are under 2 per cent as the rest of the continent struggles with the debt crisis and with the majority of Sweden's exports heading to the EuroZone.

The Swedish Agency for Economic and Regional Growth develops programs to stimulate sustainable growth.

Investment incentives in Sweden are offered to support research and development, exporting, employment and training and the development of safe and efficient energy solutions.

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9. Israel

Innovation champion: 4%

Grants for research and development include an employment grant program for high tech companies whose new hire wage costs are at least 2.5 times the national average.

General R&D grants are also offered for industrial companies whose products will yield new exports. Only one third of Israel's exports go to Europe, the majority go to Asia and the US, which makes the export sector relatively less vulnerable.

Inflation has declined thanks to lower food prices and tighter monetary policy, and should stabilise to over 2 per cent in the coming years.

Image:  Researchers at Israel's Technion Institute of Technology say the ViBot can be used to deliver a targeted dose of medication to a tumour in a lung or clear a blockage in the brain, though it will be 5-10 years before such applications are plausible.

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10. Brazil

Innovation champion: 4%

Brazil GDP growth in 2012 should be in line with the 2011 rate of 3.6-3.7 per cent, edging up to about 4 per cent for the following 3 years. Fundamentals are strong and the economy has considerable momentum.

The central bank has begun to reverse some of the previous monetary tightening and the need for infrastructure ahead of major sports events suggests no major fiscal contraction.

Brazil's state development bank will supply financing to support innovation in sectors including specialized technical services, information and communications technology and hybrid-fuel buses.

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11. Italy

Innovation champion: 3%

A weak outlook for 2012 due to continued fiscal retrenchment, private-sector deleveraging, stagnant housing market, tight credit availability, rising unemployment and a deteriorating external environment.

Itlay's GDP growth should be about 1 per cent, recovering to about 2 per cent from 2013.

Research and development incentives for large companies are in the form of tax credits.

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12. Canada

Innovation champion: 3%

Canada will see a slight deceleration in GDP growth to 2 per cent next year due to a weaker global environment, the domestic fiscal consolidation and the stronger currency should be expected.

Thereafter, growth should pick up to 2.5-3 per cent based on strong domestic fundamentals and well-supported commodity prices.

The decline in unemployment should pause in 2012 and then resume at a moderate pace, falling below 7 per cent by 2014 with inflation settling at around 2 per cent.

The Canadian policy is one of lower taxes and sound infrastructure to support economic development as opposed to providing industry specific incentives.

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13. Singapore

Innovation champion: 3%

Singapore's economic growth is expected to be between 4 and 5 per cent over the next several years.

Inflation which was overheated in 2011 at almost 5 per cent is expected in 2012 and stay manageable through the medium term forecast.

Singapore offers a wide range of investment incentives, including tax holidays and concessions, accelerated-depreciation schemes, favourable loan conditions, equity participation and high-quality industrial estates.

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14. Australia

Innovation champion: 2%

Australia's strong economic performance will continue, with GDP growth accelerating to over 3 per cent during 2012-14, with domestic private demand and commodity exports as the main engines of growth - notably in the mining sector, says the GE Innovation Barometer.

The federal government offers grants to VC fund managers that establish innovation funds under the Innovation Investment Funds program.

There are 42 co-operative research centres that bring together researchers from the private sector, academia, and the government.

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15. Switzerland

Innovation champion: 2%

Switzerland is one of the richest countries in the world by per capita gross domestic product, with a nominal per capita GDP of $75,835. Switzerland has a stable, prosperous and high-tech economy.

It is also one of the world's most competitive nations.

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16. Finland

Innovation champion: 2%

With the best educational system in Europe, Finland has recently ranked as one of the world's most peaceful, competitive and livable countries.

Finland has a highly industrialized mixed economy with a per capita output equal to that of other European economies such as France, Germany, Belgium or the UK.

The largest sector of the economy is services at 66 per cent, followed by manufacturing and refining at 31 per cent.

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17. United Arab Emirates

Innovation champion: 2%

Over 73 per cent respondents felt the innovation environment in UAE is favourable. UAE scores high in the Innovation Optimism Index as well.

With the world's sixth-largest oil reserves, UAE has one of the most developed economies in West Asia.

It is the thirty-fifth-largest economy at market exchange rates, and has a high per capita gross domestic product (GDP), with a nominal per capita GDP of $47,407 as per the International Monetary Fund (IMF).

It is 15th in purchasing power per capita and has a relatively high Human Development Index.

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18. Turkey

Innovation champion: 2%

Turkey today is a remarkable combination of strengths and weaknesses: growth has been robust, public debt is low and fiscal policy prudent.

Turkey has been overheating, as shown by a current account deficit which has widened to near double digits, making the country excessively dependent on foreign financing.

Its growth will slow down sharply in 2012 to 2.5 per cent from over 7 per cent in 2011.

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19. Russia

Innovation champion: 1%

Russia's GDP growth should remain robust, around 4 per cent in 2012 and 2013, followed by a gradual moderation to over 3 per cent.

Certain categories are exempt from the 18 per cent VAT tax, including medical products and services, and the production and sale of scientific, educational and training books.

A 10 year tax exemption is applied to innovative technology companies who set up in innovation centers across the country.

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20. Norway

Innovation champion: 2%

Norway has the second highest GDP per-capita (after Luxembourg) and fourth highest GDP (PPP) per-capita in the world.

It is the second wealthiest country in the world in monetary value, with the largest capital reserve per capita.

With robust oil and gas exports and a healthy economy, Norway will remain among the richest countries in the world.