To emphasize the last part of the global competitiveness index we should
highlight the factors of innovation and diversification. They are composed of
two pillars that characterize business diversification on the one hand and the
degree of innovation on the other.
Regarding the first element, i.e. business diversification, in its analysis
we can highlight some key elements of major relevance in influencing
competitive environment. The number of bidders and their quality is a factor
worthy of consideration in the analysis of diversification. Another element is
the development of the organization as this factor in the competitive
environment may cause competitive advantage gain. Also the nature of
competitive advantage is in turn a factor influencing competitive
environment. In this analysis it is worth highlighting the value chain width
given that it comprises several components such as internal component,
operational component, external component, etc. However, if we mentioned
the external component, we can draw attention on the control of international
distribution as a determining element in the competitive environment
research. Diversification approach can also be considered the
“sophistication” of the market itself and the extent to which marketing
activity is involved and how to delegate authority would boost the
competitive environment perspective.
The last pillar of innovation and diversification factors evaluation is the
right innovation. So what should be stressed in this regard relates to the
innovative capacity of companies and to the quality of scientific research
institutions. The innovation lies in the company’s expenses and research and
development. Of course, an increase in expenditure in this sector would lead
to an increase in innovation. Another aspect of the innovation pillar is the
level of collaboration between universities and industries and companies in
terms of research and development. Also, government involvement is
particularly important in promoting innovation in economic activity. Thus,
increasing government spending in the procurement of high-tech products is
an engine of competitive environment development in that country. Finally,
an important role in supporting this pillar is the availability of scientists that
can cause the innovation activity development on the one hand and the
number of patents for innovation on the other.
Competition is no longer limited to the company against company but
rather supply chain against supply chain. Chain partners are members of the
same team that attempts to optimize value. If one removes another chain the