Innovation and Competitiveness

The performance of an economy results from a series of variables: At the micro level, competitiveness is determined by “hard” comparative advantages such as the location, the availability of primary resources and the cost of labour, as well as by “soft” conditions, e.g. the entrepreneurial competence.

Yet, competitiveness also is a function of value chain coordination and the existence of supporting agencies at the meso level. Finally, the business enabling environment determines the overall cost of business making. Taken together, competitiveness is expressed by measures indicating technical efficiency and profitability as well as innovation and investment rates.

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