By LYNETTE KHOO

SINGAPORE is the most innovative nation in the world, according to a study jointly produced by The Boston Consulting Group (BCG), the National Association of Manufacturers (NAM), and The Manufacturing Institute (MI), the NAM's non-partisan research affiliate.

It is followed by South Korea and Switzerland. The United States was eighth in the overall list of 110 countries and second in the subset of large nations. South Korea ranks first among large countries.

This global index, known as the BCG/NAM/MI International Innovation Index, is part of a broad research study that looked at both the business outcomes of innovation and government's role in supporting innovation.

The study comprised a survey of more than 1,000 senior executives from NAM member companies across all industries and in-depth interviews with 30 of the executives.

Four critical factors that lead to innovation success were highlighted: idea generation, structured processes, leadership, and skilled workers. The findings were published in the latest BCG report: The Innovation Imperative in Manufacturing: How the United States Can Restore Its Edge.

'A skilled, educated workforce is the most critical element of innovation success and the hardest asset to acquire,' said co-author Emily Stover DeRocco, president of The Manufacturing Institute.

'The study shows that in companies and countries alike, a high number of researchers and advanced degrees - particularly in science and engineering - are the greatest predictor of success.'

The report also stresses that government must support these efforts through effective policies, including tax incentives and policies for immigration, education and intellectual property.

'America needs a bold innovation strategy,' said NAM president and chief executive officer John Engler. 'US manufacturing innovation leadership is at risk. We've fallen behind countries in East Asia and Europe.'

Mr Engler added that the US government can help move America up the innovation index by enacting more competitive tax, trade and workforce policies that enable US manufacturers to innovate and succeed globally.

The report also shows that the US needs more competitive immigration and infrastructure policies to help drive innovation.

'With high-quality, inexpensive products flooding the market from every corner of the globe, competing on cost alone is a losing battle for most US-based manufacturers,' said co-author James P Andrew, a BCG senior partner and global leader of the firm's innovation activities.

This article was first published in The Business Times.