An index which measures countries' attractiveness to venture capital and private equity investors has shown that Ireland has dropped out of the top twenty most attractive countries.

The index, which covered 66 countries, was compiled by the IESE Business School in collaboration with Ernst & Young. Ireland dropped from 16th in the last survey in 2006 to 21st this year. The US topped the list, followed by Canada and the UK.

Among the factors cited for Ireland's fall were poor access to credit and the predominance of sectors that venture capital and private equity find less attractive - such as retail and construction. The depth of the Irish recession in comparison to other countries and an increase in company failures were also listed as factors which could stop Ireland becoming more attractive to investors.

But the report said there were opportunities to improve its profile, such as strong medical devices and pharmaceutical industries, the Government's focus on the so-called 'smart economy' and a drop in valuations.