Relationship between Competitiveness and Innovation: An International Business Perspective

J. Schumpeter coined a conflicting term ‘Creative Destruction’, destruction of the obsolete with new innovation. Since 1970s, endogenous growth models have insisted on creating an atmosphere which stimulates science-technology –innovation. Romer and Lucas are pioneers in this area. Philippe & Howitt (1992) have developed a model with vertical innovation that serves as a key element of growth. Their model is rooted in creative destruction. A distinguishing feature of continuous economic growth is observed for countries which have strategies aligned with science-technology-innovation (Sefer & Sarıdoğan, 2011). With globalization, consumers’ appetite is insatiable. Firms and nations try to fulfil these desires and, in the process, compete against each other. Thus, investigating the relationship between competitiveness and innovation in the context of international business becomes crucial.