Knowledge is becoming an increasingly important factor, both for the development of the individual company and for a country’s international competitiveness. Resources such as cheap labour or the availability of raw materials, which were once effective competitive factors, are now becoming accessible to all through greater mobility and trade liberalisation and are no longer distinguishing characteristics. On the other hand, knowledge and its application in innovative products and processes is becoming the most important competitive factor. Permanent innovation is needed in many markets and industries to maintain or increase competitive advantages. Technology is a key component of innovation, and a product of knowledge.

Economies differ in their state of development and their institutional and productive capability. The success of innovation systems therefore depends on a number of country-specific factors. These include market conditions, entrepreneurial capability, public infrastructure and cultural norms and values. At the same time, innovation systems are increasingly subject to external influences, such as foreign direct investment, international (trade) agreements and international research cooperation. This is why innovation systems are open systems. Their capability is dependent on how different actors work together efficiently and effectively in a system to generate and market new ideas.

GTZ accordingly follows an integrated, potential-oriented approach to promoting the enterprise innovation. We gear our approach to (national) innovation systems (NIS) within which innovation and technological progress form a central basis for knowledge-based economic development. Innovation systems include interactive networks made up of companies, institutions, government organisations and consumers. These generate and use knowledge, helping boost knowledge-based economic development. In the medium term, strengthening national innovation systems leads to technological progress by companies, boosting their productivity, opening up new markets, increasing turnover and thereby promoting economic growth.