ABSTRACT
KNOWLEDGE AND COMPETITIVE ADVANTAGE Firms are becoming increasingly knowledge-intensive. The competitive ability is determined more and more by the effectiveness with which firms innovate their products, services and processes. The character of the chain of values is thus changing: from a sum of labour and capital to an increase of added available and new knowledge. Particularly in the case of the modern industrialised countries, competitive advantage and employment depend on the way in which they manage to exploit the knowledge intensity of their firms and institutions. The way back to pure price and quality competition seems to be cut definitively by the turbulently growing Eastern industry.
