Israel came in second place internationally in the Cleantech Global Innovation Index for its strong potential to produce clean energy start-ups over the next ten years, despite what the report called a lack of government investment.
Israel placed second after Denmark among 38 countries, which were evaluated on "15 indicators related to the creation and commercialization cleantech start-ups" in the survey completed by the San Francisco-based Cleantech Group.
The report said that despite Israel's small population, it "generates a large number of potential cleantech start-ups with relatively little input to the innovative process from government or private sources."
The greatest challenges for Israel in the industry are a small domestic market and the lack of local expansion capital, according to the report.
Cleantech says it represents thousands of investors and companies worldwide in the field of cleantech innovation, and represents more than $3 trillion in assets.