Policy Paper: Competition, Innovation and Prosperity

In this EEI policy paper, Slovenian economist Rok Spruk makes a theoretical case for innovation and shows how it benefits from competition as well as R&D, using several interesting empirical examples.

In recent years, many have stressed the need for more creative and innovative societies, since they would lead to general improvements and increased prosperity. But what conditions should be in place to allow for an innovative society?

Free enterprise, free competition and research and development (R&D) seem to be very important. The creativity that leads to new innovations – in goods, services or organizational structures – is a consequence of freedom.

The Lisbon Agenda set the aim for Europe to become the world’s most competitive and knowledge-based economy in the world. For Europe to be innovative enough to reach that aim, obstacles to free enterprise, competition and R&D must be abolished.