Ireland is no longer favored as one of the top 20 most attractive global countries for investment according to research carried out by business school and financial specialists Ernst & Young.

The Global Venture Capital and Private Equity Country Attractiveness Index puts Ireland in 21st position. The Irish have dropped six places from last year’s high of 16th place.

There are six main criteria that ascertain a country’s world ranking. These are economic activity, the depth of capital markets, taxation, investor protection and corporate governance, the human and social environment and entrepreneurial culture and opportunities.

"Today’s top 10 list are all countries perceived internationally on the road to economic recovery,” said John O'Halloran, transactions director at Ernst & Young.

“For example, Australia would not have a strong history as an attractive location for this type of investment however; its relative stability in the international turmoil has attracted many risk averse investors.”

The report highlights Ireland's poor access to credit and low interest in investment. This further reinforces economists’ bleak outlook on Ireland's economic future, and provides additional evidence that the recession is further deepening in Ireland.

The retail sector is on the verge of collapse and large scale emigration has meant that a "brain drain" similar to emigration from Ireland in the 1980s may reoccur.

However, according to the report, the government’s decision to strongly develop Ireland's "smart economy" has led to some hope that Ireland's economy may recover faster than expected.