International Competitiveness of Countries with Dynamic Innovation Systems

The group of countries known for their dynamic innovation systems includes five European countries (Ireland, the Netherlands, Switzerland, Finland, and Sweden) as well as Singapore—a small and very competitive Asian country. Dynamic innovation systems are characterized by a high innovative ability and an innovation position above average. The typical qualities of their functioning are a drive to develop knowledge and human capital resources, significant internationalization of business and research and development (R&D) sphere, high flexibility of institutions, as well as dynamic network connections between main entities of the innovation system. Within the group of a dynamic national innovation system (NIS), it is possible to distinguish two different approaches toward using those strengths in order to develop competitiveness. Finland and Switzerland focus on using and developing their own resources mainly on the basis of the internal factors, while treating the internationalization as an accompanying element. A similar approach can be observed in Switzerland, a country ranked among the most competitive economies but not a member of the European Union (EU). By contrast, Ireland and Singapore place emphasis on internationalization as the main factor of the development of internal resources.