Bahrain has been lauded a regional hub for innovation by a United Nations agency. The Global Innovation Index 2012 (GII): Stronger Innovation Linkages for Global Growth ranked the kingdom third in the region and 41 worldwide.

Bahrain climbed five places from last year in the annual rankings published by leading international business school INSEAD and UN's specialised agency World Intellectual Property Organisation (WIPO).

The human capital and research sector was a strong area of innovation in the country as the kingdom came second only to Qatar in the region and was placed 18th worldwide.

Commenting on the top ranking, a leading research house praised Bahrain's flexibility towards research and high standard of education as key factors for its recognition.

"We do market research for companies, syndicated research, media penetration details as well as media monitoring for the Middle East," said Pan Arab Research Centre's Bahrain branch manager Leo Joseph.

"In some countries, it is difficult to get permission. In some countries, there is no need for permission.

"So we try to blend in but we have had no problems in Bahrain," he said.

Simplicity in procedural matters as well securing government approvals make fieldwork in the kingdom relatively easy in comparison to the rest of the region, he said.

"To get permission, we have to submit a questionnaire, our research methodology and sample size to the Central Informatics Organisation," he said.

"If you provide the required documents, they provide the permission. I have not felt any difficulty during research here. I receive permissions in a week's time," he said.

"For political questions, it takes two or three weeks but we have never had any problems," he added.

Improvements in institutional frameworks, a skilled labour force, and deeper integration with local and global investment and trade markets make the region a lucrative hub for innovation, the report said.

"The GII is a timely reminder that policies to promote innovation are critical to the debate on spurring sustainable economic growth," said WIPO director general Francis Gurry.

"The downward pressure on investment in innovation exerted by the current crisis must be resisted. Otherwise we risk durable damage to countries' productive capacities.

"This is the time for forward-looking policies to lay the foundations for future prosperity," he said.

The report was prepared by an advisory board of 11 international experts, the Confederation of Indian Industry as well as consulting firms Alcatel-Lucent and Booz & Company.

"Innovation is becoming the spearhead of competition - at a regional level, on a national level, and for companies," said Alcatel-Lucent chief executive Ben Verwaayen. "How to deal with that challenge will determine the destiny of competitiveness for all players," he said.