Some nations are better incubators for green innovation than others. In these locations, entrepreneurs have the ability to dip their toes in the cleantech pool, or even dive head first to make waves in the industry.

The Global Cleantech Innovation Index explores which countries show the most promise in commercializing clean technology innovations over the next 10 years. The following five countries exemplify best where sustainable innovations are emerging to benefit the planet, its occupants, and the economy.

1. Israel

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Photo: Yoni Lerner via Flickr.

Israel has long been acknowledged as a leader in the cleantech space. With no fossil fuels and less than ideal relationships with its oil-rich neighbors, the nation has been looking toward sustainable solutions since as early as the 1950s. Today, 90 percent of homes heat their water with solar energy, and the country is a world reference in treating and and recycling water.

The country topped the 2014 index due to its high measure of cleantech startup companies per-capita, a number which outperforms the rest. Israel Cleantech Ventures (ICV) is the leading VC fund for such sustainable business endeavors.

The small country is an ideal incubator for cleantech startups, with 19 companies in the past three years voted onto the Global Cleantech 100 Index. Israel has been praised for cultivating a culture of green innovation, but there appears to be ample room for improvement when it comes to funding, scaling, and implementing public policy.

2. Finland

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Photo: Jumilla via Flickr.

Another small country setting a brilliant example in cleantech innovation is Finland, which boasts a booming renewable energy sector. Like Israel, Finland is naturally bereft of fossil fuels and has a harsh climate — in this case, frigid winters instead of desert heat. Such conditions make cleantech a priority worth pursuing aggressively.

The cleantech industry in Finland currently employs 50,000 people, a number the report estimates will nearly double by 2020. The country’s Cleantech Finland organization is behind much of its success thus far, having united 2,000 sustainable technology companies and connecting them with investors. The country’s remarkable efforts have mobilized the workforce toward a low-carbon goal, and even reach cross-border to access markets in other geographies.

3. USA

San Francisco at night.

Photo: Derek Giovanni via Flickr

Though a big fossil fuel producer and consumer, the United States is also excelling in cleantech innovation — especially when it comes to attracting capital. Funding has flowed generously to American green technology startups from both domestic and international investors.

America’s states, of course, differ drastically, with California being the cleantech poster child: in fact, California has been called the “epicenter of the US cleantech market,” ranking number one in the country followed by Massachusetts. Implementation of green technology has been made effective by Silicon Valley and necessary due to the region’s ongoing drought.

When it comes to innovations and investments, the index warns that the momentous deployment of new Chinese initiatives may overtake the US’ ranking in the near future. China’s President Xi is pursuing cleantech in a big way, while the US faces some pushback against policies that aim to address and fund it on a federal level.

4. Sweden

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Photo: Magnus Johansson via Flickr.

Nordic nation Sweden tops the list when it comes to general innovation drivers, and alongside Finland bests the rest of Europe considerably. Cleantech research and development in Sweden are funded handsomely by the government, and its sewage treatment is (just about) second to none. Its green technology sector employs roughly 40,000 people.

Sweden’s Cleantech Inn is a major nonprofit initiative in the sector; it helps facilitate the success of early-stage green startups across the country by offering business development support and networking with investors and policy makers. Sweden is a major consumer of renewable energy, ranks first in the EU for organic food consumption, and is a world leader in recycling.

Though Sweden was recently ranked as the world’s most sustainable country, the index notes there is room for improvement when it comes to breaching the gap between innovation and commercialization.

5. Denmark

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Photo: Jacob Surland via Flickr.

Once ranking first on this index, Denmark now sits at a still-impressive fifth place. Along with Finland, Denmark has one of the highest cleantech investment budgets — in fact, in terms of cleantech investment alone, Denmark remains number one.

Denmark also leads the world in wind power, and like Finland, is pursuing cleantech partnerships in international markets including China. There are close to a thousand companies in Denmark’s cleantech field employing over 60,000 workers. According to the index, Denmark stands out for producing a large number of mature, publicly listed cleantech companies relative to the size of its economy.

So why number five? Denmark saw a drop in venture investments, patent-filings and cleantech-specific funds recently where Finland saw growth. Regardless, Denmark remains a leader in this field and will likely to continue ranking as high in cleantech as it does in happiness.