Melbourne beat out an improved Sydney this year in the fifth annual Innovation Cities Asia Index, which measures cities as innovation economies.

Tokyo and Shanghai rounded out the top four cities in the index released Tuesday by analysts from innovation agency 2thinknow after collecting and assessing data for transport, universities, arts, design, sustainability, economics, start-up facilities, labour, technology and other indicators to measure of the opportunity cities offer their citizens.

According to 2thinknow Executive Director Christopher Hire, “Key cities will perform out of pattern with nations, as nations enter or exit economic malaise, or multi-speed economies."

Boston was number one globally for innovation, followed by the San Francisco Bay Area. Paris came next for innovation, followed in order by New York, Vienna, Amsterdam, Munich, Lyon, Copenhagen, Toronto and London.

In Asia, the analysts ranked Melbourne 17 globally, up two places from 2010, and three places ahead of a resurgent Sydney. Tokyo fell to 22nd globally, just ahead of a stronger Shanghai at 24 globally, and Singapore 26th globally. The top emerging city was again Abu Dhabi (59), ahead of Dubai (91) and a rising Cape Town (111).

In 2011, 331 benchmarked cities were scored on 162 indicators by 2thinknow based on their facility to generate product, process, service and other innovation types across an urban economy. Results are classified into five bands of performance including top-tier Nexus and Hub cities, followed by globally competitive Node cities. Globally the top 125 cities are ranked.

The United States grew the most globally competitive Node cities in 2011, as China's performance to date was reflected by the entry of cities like Wuhan and Chengdu for the first time. The analysts identified infrastructure investment as key to stronger Australian innovation performance.