What is it about?
While the question of how the different kinds of innovators have achieved growth or decline is discussed in Chapter 4, in this chapter 5 the relationship between innovation and growth are approached from another angle by focusing on the question of how small firms have achieved long-term competitive performance through innovations. The chapter starts by discussing on competitiveness and its elements in the context of small business. Based on them, a model for assessing competitiveness in small firms is designed. Thereafter, the different kinds of growers and their opposite counterparts, decliners, are identified. Finally, the competitiveness of these grower-decliner pairs are analyzed and compared by using the model designed in this chapter.
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Why is it important?
Traditionally small businesses have been dependent on local economies. However, in today’s globalized and uncertain business environment they should compete not only with their local competitors but also with international ones. Due to the fact that competition among small businesses has radically tightened over the years, their survival is increasingly dependent on created and sustained competitive advantage.
Perspectives
Innovation is regarded as a potential source of competitive advantage while competitiveness is considered as an ability of a firm to exploit this competitive advantage by competing successfully with its competitors. This leads to a general proposition that superior business performance emerges from superior competitiveness which in turn emerges from superior competitive advantage and innovation is an input for creating this competitive advantage.
Dr Helena Forsman
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This page is a summary of: Towards Superior or Lost Competitiveness, March 2015, World Scientific Pub Co Pte Lt,
DOI: 10.1142/9781783266340_0005.
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