Israeli business executives think very highly of their country’s innovation capabilities, according to a survey carried out by General Electric for its 2013 Global Innovation Index.

Seventy percent of executives in Israel see the country as being highly innovative, the second highest among executives in 25 industrialized countries  (only executives in the United Arab Emirates –78% of them — thought of their country as more innovative). However, in the rest of the world, perhaps because of lack of familiarity with the “start-up nation,” only 43% believed that “the Israeli environment for Innovation is strongly innovation conducive.”

The poll, taken by GE in advance of the 2013 Davos Economic Forum in February, ranked Israel — both internally and externally — on a range of factors that do or do not encourage innovation. Among the questions asked were: What do executives consider most important for innovation, and does Israel provide it; is the government doing enough to encourage innovation; do universities encourage or discourage innovations, and do they share research with business; and is innovation really a good thing anyway?

While you would expect the answer to that last question to be a universal “good thing,” that is not the case; overall, 30% of executives in the countries polled — including South Africa, India, Japan, Singapore, and Vietnam — agreed somewhat or strongly with this statement: “Innovation has a negative impact on my country’s economy, by creating more competition among businesses and making some products and services obsolete.” According to the poll, the country most fearful of innovation was Turkey, where 28% of executives “strongly agreed” with the statement, while 38% “somewhat agreed.” True to its spirit of innovation, only 21% of Israeli executives agreed with the statement. The most optimistic executives regarding whether innovation helps a country’s economy, along with Israel, were from Germany, Sweden, and Russia.

The country seen as most innovative was the US, chosen by 35% of worldwide respondents to the poll. Israel, with 2.59% of the votes, came in a respectable seventh worldwide, behind China but ahead of India. In terms of how foreign executives see Israel’s efforts to encourage innovation, 43% said that Israel significantly encouraged and developed an atmosphere leading to innovation, putting Israel in 15th place. Germany was in first place with 85%, followed by the US with 84%, Japan with 81%, and South Korea with 78%.

But, as mentioned, Israelis are much more confident of their nation’s ecosystem, with nearly three quarters of executives saying that Israel did a great deal to encourage motivation. Ninety-two percent of Israeli respondents report innovation was a strategic priority for their business, 71% believe that partnering with universities for R&D purposes was easy, 94% said that Israeli youth was innovative and wanted to succeed in tech areas, 89% said that Israelis in general were supportive of tech innovation, and 84% said Israel was in general a risk-taking society, a required element for success.

Despite rampant complaining about Israeli government red tape, more than three quarters of executives agreed with the statement “governmental support for innovation is efficiently organized and coordinated.” That was the third-highest approval rating of any executives in the world — bested only by respondents in Singapore (where 78% said the government was organized and coordinated), and China (77%). In addition, Israeli and Chinese executives were both the most likely (78%) to agree with the statement “government and public authorities allocate an adequate share of their budget to support innovative companies.”

Israeli executives, too, had the highest opinion of executives anywhere else of youth and society: 94% said that “society as a whole is supportive of innovation, there is an appetite for innovation among young generations,” while 90% agreed that “the general public is convinced of the value innovation can bring to their day-to-day life.”

The GE poll, started three years ago, polled 3,100 executives in 30 countries. The executives headed companies with an average of 1,200 employees each. The surveyed countries included the US, Brazil, Israel, Canada, Mexico, China, India, Singapore, Australia, South Korea, Japan, Germany, Sweden, the United Kingdom, Poland, Russia, Turkey, Nigeria, UAE, Vietnam, Malaysia, Ireland, the Netherlands, Saudi Arabia and South Africa.