Innovation in business as seen from different economic theories

Abstract

In a world of universal competition, "globalization", innovation has become vital for companies and economies which are currently characterized by a fierce competition and an increasingly demanding clientele. Thanks to innovation, companies and, consequently, territories can improve their productivity, profitability and economic growth. This paper contributes to the understanding of the determinants of innovation behaviour of companies consider the basic theories of innovation.

It is referring to the different economic approaches and theories of innovation. We present, firstly, the Schumpeterian theory which recognizes the role of the entrepreneur and market structures on the determinants of innovation; secondly, we move on to the discussion of the endogenisation of growth resources and the positive relationship between innovation, technical progress and economic growth; and we end up with the presentation of the evolutionary theory which emphasises the processual character based on learning, the trail dependency and the accumulation of knowledge which determine the factors of innovation.

JEL Classification: O30

Paper type: Theoretical Research