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BusinessWeek Logo Once upon a time—actually it was just last year—the U.S. was the world innovation champion, according to an annual report by INSEAD and the Confederation of Indian Industry. In this year’s study, the nation slumps to 11th place. Perhaps even more surprising is the new No. 1: Iceland.

Soumitra Dutta, an INSEAD professor of business and technology, who oversaw the survey, theorizes that the rankings show that, as in so much else, size matters. But in this case it’s the smaller the better.

He tells me that having easy access to a big marketplace still makes it easier for innovators to profit from their inventions. Would the iPod or the iPhone have been such big hits if Apple had been based in, say, Iceland? But the Internet is turning the entire world into one big market, to which everyone everywhere has access, he says. Also, it appears that smaller, homogeneous countries can unite to support policies, institutions, and infrastructure that promote innovation—in the developed world, at least.

Size certainly makes a difference in the 2010 Global Innovation Index report. The most-populous land in the Top 10 is Sweden, with 9.2 million people. It finishes second. Several of the biggest nations in the developed world cluster just below the U.S. Japan is 13, with Britain at 14, and Germany at 16. Of the so-called BRIC giants in emerging markets, China comes out best, at 43. Trailing are India (56), Russia (64), and Brazil (68).

To read the full, original article click on this link: U.S. Loses Innovation Crown to ... Iceland - BusinessWeek

Author: Michael Arndt