ABSTRACT
This chapter considers innovation defintions and its importance for national competitiveness. It discusses two assumptions related to the importance of innovation in organisations. The first is that technological innovation in products and services provides competitive advantage. The second is that innovations in non-technological areas, some of which are factors for technological innovation, also provide competitive advantages. The next chapter reviews the topic of innovation, its issues, its processes, and selects a model. The competitiveness of a nation's organisations appears to be a key factor in the wellbeing of its society. In the classical theory of competition, technical advance has a role because some individuals, in their desire to maximise personal benefit, have been willing to invest in technical change. 'Austrians' see profits as an essential lure that attracts the creative and results in the creation of products, while this motivation to discover something new is taken for granted in the neo-classical view.
