Singapore retained its No.1 spot for innovation among Asian nations on the annual Global Innovation Index (GII).
Globally, however, it slipped one notch to seventh place, despite gains in innovation output and innovation efficiency - two indicators where it lagged behind before.
The slip can be attributed to other nations closing the gap, with at least three key Asian economies rising up the ranks. China was the top Asian gainer, up three spots at 22nd.
The index, released yesterday, is co-published by Cornell University, Insead and the World Intellectual Property Organisation, and surveys about 130 economies. Switzerland continued its dominance as the world's most innovative economy for the seventh consecutive year.
Singapore retained its top global position for innovation input, and advanced by three notches in innovation output to 17th place.
This helped to boost its innovation efficiency ratio, which measures how much innovation output an economy gets for its input, to 63rd place from 78th last year.
Innovation output includes criteria such as patent applications and business model creations, and even video uploads on YouTube, while innovation input includes the quality of human capital and research.
Mr Daren Tang, who is chief executive of the Intellectual Property Office of Singapore, said the agency was encouraged by the Republic's strong performance on the index.
He said: "The translation of innovation investments into enterprises that help drive our economy and create jobs is not an easy task. However, in a short span, we have improved our ability to do so, as evidenced by our improving scores in innovation efficiency as measured by the GII."
Singapore consistently comes out tops for innovation input, a reflection of strong government support. However, it had a weak showing in education, where it ranks 76th, for indicators such as expenditure on education and pupil-teacher ratios.
Mr Winston Nesfield, a partner at Strategy&, the strategy consulting arm of PwC, said that despite Singapore's historical strengths of strong government commitment and an open talent-acquisition policy, it cannot rest on its laurels.
"The race to lead the future economy is heating up, and there are early indicators of Asian competitors closing the gap. China registered high innovation outputs - the ability to translate knowledge creation into the fruits of innovation such as patents. This translates into real economic impact such as start-up businesses per capita."
He suggested that, given Singapore's market-size limitations, it must choose "high-value innovation areas", including intelligent automation and artificial intelligence, to lead Asia in terms of thought leadership, application and commercialisation of these concepts.
The Philippines was the region's top performer for information and communication technology service exports, while Vietnam led in trademarks by origin and education expenditure.