Mumbai: Japan has emerged as the world''s most innovative nation in terms of business practices, followed by Switzerland, the US and Sweden, in a survey of 485 senior executives worldwide, carried out by Hong Kong-based Economist Intelligence Unit.

India has been ranked 58th, ahead of China''s 59th position in a ranking of 82 economies, based on their level of innovation during 2002-06.

The survey, however, said India may give away its lead over China as an innovative country in the next five years, even though it has emerged as the second best place for business innovation.

The US emerged as the country with best conditions for innovation, followed by India at the second position, UK at the third and Japan at the fourth.

However, the study said, China is likely to have more favourable conditions for innovation than India in the next four years.

"While it is still not as efficient at innovation as India, the huge sums of money it is pouring into R&D and education will ensure that it climbs steadily up the rankings, leaving India behind," it added.

According to the study, the top four economies are set to maintain their position during 2007-2011, while China will move up to 54th position, overtaking India.

India would also rise in the ranking, but not as much as China and would be positioned at 56th rank in 2011.

The study further found that both China and India were breaking out of their position as members of the under- developed world.