TAIPEI (Taiwan News) — Taiwan has been ranked as having the fifth-greatest potential for economic innovation in the world, according to a new index released by Bloomberg Economics.

In its latest ranking of 135 economies, Bloomberg Economics took into consideration four factors: "IT deepening," or a country's information technology infrastructure, "human capital," "business fluctuation," and "institutional quality measures," or a country's inclination to innovate and absorb existing technology. Taiwan was listed fifth for its overall potential to innovate, following Japan, the U.S., Germany, and Switzerland.

In the report published Thursday (Oct. 15), Taiwan received an almost perfect score of 2.9 out of 3 points in IT deepening and 1.4, 2.1, and 1 in institutional measures, business climate, and human capital, respectively. Rounding out the top 10 were Singapore, Denmark, Sweden, the Netherlands, and the U.K.

The report concluded that advanced economies have the greatest innovation potential, while emerging markets, such as China, Russia, and Brazil, are close behind. Taking 31st spot, China received -0.3 points in institutional quality measures but 2.1 in human capital, reported UDN.

Global innovation potential rankings by Bloomberg. (Bloomberg Economics screenshot)