Innovation and Competitive Power

Abstract

The efforts to liberalize the world trade that started with the General Agreement on Trade and Tariffs (GATT) on the one handand with regional integrations on the other hand after the World War II and the acceleration of globalization since the beginningof 1980s have caused the abolishment of borders among the countries. The developments in information and communicationstechnology and the increase of the movement of capital have caused the economic structures, legal systems and life styles ofcountries to become similar. With the disappearance of protective tendencies on world trade, there has been an increase in theexporting countries and exported products and also the similarity of consumption patterns along with globalization has alsoincreased the world trade. Therefore, as many countries produce and export similar products, the increase of internationalcompetition has become indispensable. Within this intense competitive environment, the necessity to produce highly competitiveproducts has caused to invent new products or to improve the existing products, which is called the process of innovation. Withinthis scope, the factor of innovation represented by R&D activities and Patents has become an important element of competitivepower. This study will therefore first try to reveal the relationship between innovation and competitive power, and this will befollowed by an analysis of Turkey’s situation.Keywords: globalization, innovation, competitiveness