The World's Most Innovative Countries

Which nations have the best capacity to solve problems? As The Daily Beast launches its new channel, INNOVATION, it surveys the world’s “innovation czars” to rank the best of the best.

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Scott J. Ferrell / Getty Images

#1, U.S.A.

Innovation Credibility: Last year, McKinsey & Co. published a study comparing the relative sizes of innovation "hubs" around the world based on number of patents, journal publications and more. Atop the list: Silicon Valley, California, which generates half of the whopping $25 billion that America pours into venture capital each year.

What the Voters Said: "America's culture of risk-taking is an abiding source of competitive advantage."

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#2, Singapore

Innovation Credibility: Singapore is coveted for its education, economy, and talent. A report released last year by Boston Consulting Group ranked Singapore best in terms of fostering innovation with corporate and governmental policies. The government has consistently supported science education domestically, while encouraging workers to leave the country for advanced degrees in other areas.

What the Voters Said: "Adapted brilliantly despite very limited natural resources."

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#3, Finland

Innovation Credibility: The Land of a Thousand Lakes went from a nation reliant on agriculture to one of the world's most economically efficient and technologically advanced countries this century. The nation plows 3.7 percent of its GDP into R&D, second only to Sweden, a portion of which funds the national technology agency, Tekes. The agency doles out a whopping $540 million per year—$10,000 for each Finnish citizen—in grant money to institutions and businesses.

What the Voters Said: "As well-designed an innovation ecosystem as exists on the planet."

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#4, Israel

Innovation Credibility: Israel's close relationship with the United States extends to how it develops innovative ideas. Just like in the U.S., Israel boasts countless programs, from Innovation Israel to the Israeli Tech Transfer, which promote creativity among Israeli youth. And by at least one measure, Israel is the world's innovation leader, with one startup for roughly every 1,800 people.

What the Voters Said: "‘Startup Nation' maintains a fierce level of business-relevant innovation."

Jo Yong-Hak / Reuters

#5, South Korea

Innovation Credibility: Innovators of all stripes played a major role in South Korea growing exponentially into a trillion-dollar economy since the 1970s. Today, they focus on the mobile-phone market—South Korea is home to cellphone giants Samsung and LG. Cellphones aren't just a way of life—South Koreans ubiquitously use them to surf the Web, watch television, play videogames and even pay subway fare—they're big business, and in the cellphone market constant improvements on last year's model are necessary to stay on top.

What the Voters Said: "Working against many problems, including North Korea, they have managed to develop at an amazing rate."

#6, Denmark

Innovation Credibility: Like its neighbors across The Kattegat, innovation in Denmark has a big focus on design. The DESIRE 2010 conference at Aarhus University will discuss the newest topics in creative design for solving science and technology problems. And speaking of technology, the Innovation Center Denmark provides Danish inventors and entrepreneurs a direct link to leaders in Silicon Valley.

What the Voters Said: "Lots of efforts on leadership and long-term innovation."

Noah Seelam, AFP / Getty Images

#7, India

Innovation Credibility: In India, software innovation reigns. A low-cost and well-educated workforce played a large role in the nation's rapid tech development, but burgeoning entrepreneurialism and a domestic venture-capital industry is generating future growth.

What the Voters Said: "Taking on the old world, with next-generation R&D models and a socially inclusive, grassroots approach to innovation."

AP Photo

#8, Germany

Innovation Credibility: Germany historically leads in pharmaceuticals and biotech. The nation produced morphine and aspirin as well as 77 Nobel Prize winners in chemistry, medicine, and physics. But as the U.S. and Japan challenge its dominance in those fields, it must leverage its manufacturing prowess and low health-care costs.

What the Voters Said: "Becoming the leading EU economy, given where they were at the end of World War II, took huge innovation and application. They continue to invest."

YOSHIKAZU TSUNO

#9, Japan

Innovation Credibility: A population less than half of that of the U.S. generates 3.5 times as many patents. It lacks telecom infrastructure, but has a high level of R&D investment and a strong population of scientific researchers.

What the Voters Said: "A culture with a can-do tradition."

Herbert Zodet, National Geographic / Getty Images

#10, Chile

Innovation Credibility: Problem-solving in action: One of the driest places on earth, Chile harnesses water from fog, after citizens observed condensation on local flora. Water harvesting is now used in arid climates around South America and the Middle East.

What the Voters Said: "An innovation hotspot of growing importance in the Western Hemisphere."

Casper Hedberg / Getty Images

#11, Norway

Innovation Credibility: National governments often stand in the way of creativity. Not so in Norway. In true Nordic fashion, innovation in the country is state-run. Innovation Norway is an incubator for developing companies in Norway and companies that want to do business in Norway, with offices in 30 countries around the globe and in every Norwegian county. It was created as an umbrella group to replace four former agencies, including the tourism board and a national office for inventors.

What the Voters Said: "Sustained innovation model for economic diversification, including using oil and gas for social innovation."

#12, The Netherlands

Innovation Credibility: Among the list of Dutch inventions, which includes cocoa powder, the electrocardiogram, and the first submarine: the microscope. The "Father of Microbiology" Antonie van Leeuwenhoek hailed from The Netherlands and was the first to use his handmade microscopes to look at single-cell organisms, bacteria, and blood vessels.

What the Voters Said: "Thoughtful, practical."