An assessment of innovation system and its impact on national competitiveness in Kosovo

Improvements in institutions, macroeconomic stability, infrastructure and human capital are assessed to lead to significant gains for national economies. A similar argument has been advanced in relation to labour market, financial market and goods market. However, the risk of running into diminishing returns can be offset by investments in technological innovation. Innovation systems are particularly important for economies as they approach the frontiers of knowledge and the possibility of integrating and adopting exogenous technologies tends to disappear. Less advanced countries can still improve their productivity by adopting existing technologies or making incremental improvements in other areas. Firms in these countries must design and development cutting-edge products and processes to maintain a competitive edge. This requires an environment that is conducive to innovative activity, supported by both public and private sectors. This particularly relates to increased investments in research and development, the presence of high-quality scientific research institutions, extensive collaboration in research between universities and industry and the protection of intellectual property rights. The paper examines the innovation system and its impact on national competitiveness in Kosovo using the competitiveness methodological approach