A recent report published by the economist and sponsored by Cisco, ranks Israel 10th in the world in terms of innovation.
The report is to be found here:
Israel is generally one stage up in 2004-2008 than in the previous four years and is expected to overtake Holland and rank 9th over the next four years.
Various indices are presented in the report. For a Levantine country Israel doesn’t do badly, outstripping her neighbors. However, in addition to the US and Japan, there are many European countries with better results per capita. Israelis are inventive, but less so than Israeli journalists and politicians would have them believe and than many Israelis think.