Improving skills is one of the most important ways to boost innovation, productivity, economic growth and improve social welfare and equality, says the Global Innovation Index ( GII ) 2014 report.
Indonesia, which boasts the world's 10th-largest economy in terms of purchasing power parity ( PPP ), is notorious for its weakness in improving skills and innovation and it has dropped two places in the annual GII survey for 2014.
Indonesia ranked 87th ( out of 143 ) on this year's list, dropping from 85th last year.
The archipelagic nation is the worst performer among G-20 members, with all other members ' including Saudi Arabia ( 38 ) and South Africa ( 53 ) ' improving their standing from 2013. India is the one exception, falling 10 places to 76 this year from 66 in 2013.
The GII 2014 annual rankings, jointly published by the World Intellectual Property Organization, Cornell University in the US and INSEAD business school, are based on a global survey conducted in 143 countries, using 81 indicators to gauge each country's innovation capability and measurable results.
The survey results were announced recently in Sydney, Australia, during the G-20 business leaders' ( B20 ) meeting.
With the theme, 'The Human Factor in Innovation', the GII 2014 report places a great deal of emphasis on innovation.
'The GII recognizes the key role of innovation as a driver of economic growth and well-being. It aims to capture the multi-dimensional facets of innovation and to be applicable to developed and emerging economies alike', the report stated.
Switzerland, the UK and Sweden occupied the top-three rankings, while the US ranked sixth, Singapore seventh and Hong Kong in 10th place.
Sudan, meanwhile, was found to be the least-innovative country, and came in at the bottom of the table.
Indonesia ' despite being Southeast Asia's largest economy ' lagged behind several of its ASEAN peers in the survey.
Indonesia came behind Singapore ( 7 ), Malaysia ( 33 ), Thailand ( 48 ) and Vietnam ( 71 ), but was ahead of Brunei Darussalam ( 88 ), the Philippines ( 100 ), Cambodia ( 106 ) and Myanmar ( 140 ).
According to Battelle's 2014 Global R&D Funding Forecast, Indonesia had allocated US$3 billion or 0.2 percent of its gross domestic product ( GDP ) this year for research and development ( R&D ), while tiny Singapore would be spending US$9 billion or 2.7 percent of its GDP.
Though global R&D spending ( $1.6 trillion ) has been on the decline in recent years, several developing countries have increased their R&D budgets to improve human skills and innovation.
In an effort to boost innovation, Indonesia needs to boost its R&D spending in the coming years.