Innovation as a tool for global competition and cooperation for innovation

Abstract

One of the most important trends in the world economy has been the globalization of economic and business activity. Driven by a range of policy, economic and technological variables, international economic activity of all kinds has been on the increase. World trade has grown significantly faster than world output over the last few decades and foreign direct investment flows have grown faster than world trade. The globalization of economic activity and the tendency for firms in related lines of business to locate and operate in close physical proximity have become dominant forces shaping economic development. Globalization is shown to be consistent with the localization of competitive advantage in various industries and activities. Increasingly, the need to adjust to global competition, and the examples of prosperous regions whose economies are built on localized groups of firms, have caused local, regional and national governments to turn to policies based on enterprise clusters (a cluster is an agglomeration of firms in a related line of business, cluster development policies have proliferated in developed and developing economies, in central and peripheral regions, and in nations and regions with disparate philosophies on the role of government in economic development. As globalization has accelerated, interest in localized groups of firms in related industries has grown. This has been due to successful examples of such clusters" found in growing or prosperous regions