Page 14 - COMPASS - COMPETITIVENESS REPORT 2022 - COUNCIL OF COMPETITIVENESS IN GREECE

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FOCUS ON INNOVATION

The term innovation refers either to the creation of new products (product innovation), the application of
new production methods (process innovation) or even the implementation of new operational processes
in the delivery of services. Different types of innovation can be encountered singly or in combination. Fre-
quently, what is a product innovation for one company can be a process innovation for another. Both these
types of innovation serve the primary goal of a business, which is to maximise profit or minimise cost by
generating/creating added value. Either way, both types of innovation contribute to boosting a company’s
competitiveness and thus the competitiveness of the market as a whole.

Innovations are the result of business investment in research and development (R&D), not only to come up
with new products and production processes but also to develop their capacity to swiftly take up new tech-
nologies and leverage their potential. Two key factors drive investment in R&D. The first is profit maximisa-
tion, which incentivises companies to optimise production compared to competitors. Thus a better product
or an improved production process can increase a company’s market share or afford it a strategic/compar-
ative advantage over its competitors. Secondarily, if a company knows that its competitors are investing in
R&D, it acknowledges that its competitive position in the market is threatened and that changes need to
be made accordingly.

A business’s innovation capacity is enhanced when the business operates within a structured ecosystem.
An ecosystem is defined as a dynamic group of independent economic entities that create products or ser-
vices that together constitute a coherent solution to a business problem. We endeavour below to analyse
the structures, agencies and tools that support businesses in their efforts towards innovation, examining
the pertinent legislative framework, the country’s research community with which businesses must strive
to collaborate, financing tools, as well as the development of a startup ecosystem that makes use of new
technologies and opens up new possibilities for businesses.