Competitiveness Model—A Double Diamond

Abstract

Since Schumpeter, it has been assumed that innovation typically plays a key role in competitiveness at firm, industry and national levels. This assumption has been applied to firms both in developed and developing countries. However, the innovative capacity and business environments of firms in developing countries are different from these of firms in developed countries. It stands to reason that innovation and competitiveness models based on developed countries may not well be applicable to developing countries. Drawing on theoretical bases of competitiveness, technology, and innovation, the current research adds to the literature in three respects. First, it introduces a more systematic innovation-led competitiveness model in which higher productivity is achieved through higher efficiency in the global knowledge economy; second, it presents an empirical analysis of driving forces of innovation and competitiveness; third, it identifies the impacts of intellectual property rights protection. The innovation-led competitive advantage model extends Porter’s Competitiveness Diamond, in which a firm’s capacity in identifying, negotiating, networking with and improving its existing technological capacity is at the core of competitiveness.