The results from the latest GE Innovation Barometer place Britain 5th out of 25 top global locations for business innovation.
The survey, which canvassed the opinions of 3000 global business leaders, asks participants to identify those countries which are best placed to foster innovation.
Germany, was the only other European nation to pip Britain. Eighty five per cent of respondents said Germany was strongly conducive to innovation. Sixty nine per cent said the same of Britain,
Other nations to rank higher than the UK as innovation environments were the USA, Japan and South Korea. The fast growing BRIC nations all lagged behind the UK with China scoring 66%, India 55% and Russia just 29%.
Particular virtues of innovating in the UK were connected with its entrepreneurialism and confidence in risk taking.
The barometer also showed increasing UK confidence in the ability of SMEs to innovate in the same strategic and structured way as large organisations.
Over 96% of respondents in the UK said that SMEs and individuals can be as innovative as large companies. This is an increase of 11% compared to the 2012 GE Innovation Barometer.
The key challenge to innovation in the UK was seen to be skills in innovation techniques and the ability to recruit innovative individuals.
Confidence in the ability of the British education system to promote innovative behaviors and teach innovation techniques is growing among business leaders. Fifty one per cent now believe that it does so – a 7% increase on 2012. However, 50% also said that more needs to be done to align student curricula with the needs of business.
Government support for innovation in Britain continued to be a stumbling bloc in the eyes of global business leaders. Just 24% of UK respondents felt government was doing enough in budget terms to support innovative companies. The average response globally to this question is 45%.
The findings of the Innovation Barometer also reflect those of the recent GE High Tech Manufacturing Index. The results showed a strong focus on R&D investment for UK high tech manufacturing companies.
Twenty two per cent of the 400 companies surveyed in the latest GE High Tech Manufacturing Index said they invested more than 10% of their revenues in R&D.
The research demonstrated that R&D investment was just as strong in large companies as in smaller and mid-sized companies and that collaboration for innovation is a growing trend.