Globally, the U.S. ranks only eighth in innovation and is in danger in falling behind even more. Such is the conclusion of a joint study (PDF) prepared by the Boston Consulting Group (BCG), the National Association of Manufacturers (NAM), and The Manufacturing Institute (MI), who find that American innovation is in danger of being further surpassed. “U.S. manufacturing innovation leadership is at risk,” said NAM President and Chief Executive Officer John Engler. “We’ve fallen behind countries in East Asia and Europe. America cannot afford to lose its manufacturing innovation edge and the wealth and jobs that it generates throughout our economy.” The study ranks 110 nations on an index which weighs the business outcomes of innovation and governments’ encouragement and support of innovation.

Singapore leads all countries, followed by South Korea, Switzerland, Iceland, Ireland, Hong Kong, Finland, the U.S., Japan and Sweden.

In the U.S., the top states for innovation are California, Connecticut, Delaware, Massachusetts, New York and Washington. Among the worst are Alaska, Florida, Kentucky, Maine and Missouri.

In order to improve innovation, the report recommends that nations do six things: strengthen the work force, lead by example, make innovation easier, maintain a strong manufacturing base, improve the payback in profit and be consistent in tax policies and benefits.

The authors of the report call for more government support for U.S. companies. “Government can help move America up the innovation index by enacting more competitive tax, trade and workforce policies that enable U.S. manufacturers to innovate and succeed globally,” said Engler.

“The report also shows the United States needs more competitive immigration and infrastructure policies to help drive innovation,” Engler said.

By Mark Alvarez