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National Competitiveness – Local Innovation?

Recent article from Future Cities Institute's CEO, Malcolm Fraser Many people have asked me for the reasoning behind, and the connections between, national competitiveness and local innovation…here are both.

National competitiveness is based on national productivity, being the capacity of the nation’s firms to achieve higher levels of productivity, and develop the capabilities to compete in more and more sophisticated industry segments.

Equally, as business success is now based on the paradigms of flexibility and entrepreneurialism, urban-based innovation development and entrepreneurship now generates national outcomes, with cities playing a significant role in overall economic productivity and national competitiveness.

Within this context, the Information and Communications (ICT) industry also demonstrates a positive impact on national competitiveness, where ICT production contributes to output, employment, and export earnings, and ICT use increases productivity, competitiveness, and growth across all industries in an economy. And while industries such as agriculture and tourism may in themselves not be knowledge-intensive, the innovation process, including knowledge inputs from outside industry firms and institutions, may indeed be.

The proposition is that national competitiveness and enduring competitive advantage in today’s global economy, increasingly lies in local things — knowledge, relationships, and motivations that distant rivals cannot match.

These local innovation ‘ecosystems’ are core to the creation and commercialisation of innovative products, processes, and services by entrepreneurs and reinforces the need for local indigenous skills, capabilities, and enabling ICT environments. It also reinforces the need for innovation programmes that focus on creating and supporting the complex stakeholder interactions that drive economic growth at local, industry and macro levels of an economy, to produce economic growth and social benefits for all citizens.