Interaction Between Competitiveness and Innovation: Evidence from South-Eastern European Countries

Abstract

The traditional doctrine of classical economic theory mostly considers economic growth and competitiveness at the level of the national economy. The problem of competitiveness within this stream of economic theory is mainly approached as the need to find the answers why some countries develop faster and become richer than others, i.e. how an economy gains the ability of sustainable growth, which makes it more competitive than others. In contrast to this point of view, the neoclassical economic theory shifts the focus of the research of growth and competitiveness from the national economy to the field of resource allocation and enterprise efficiency. The logic is simple-competitive enterprises make competitive economy and vice versa, competitive economy creates an environment that encourages the competitiveness of enterprises. The research concept of this paper is based on the synthesis of these two approaches. The aim of the paper is to evaluate the importance of innovative activity in improving competitiveness. The paper provides a comparative analysis of the competitiveness of the Balkan countries, with special attention to determining the correlation between the indicators of innovative activities and the competitiveness of the observed countries. For the purpose of this analysis, a method of dependency analysis has been applied, as well as correlation analysis. Then, the analysis of the results of empirical survey on innovation activities of enterprises in Serbia is performed. It is pointed out to the lack of innovation activities in enterprises in Serbia as one of the main causes of their low competitiveness.