Competition as the main driving force

It is too presumptuous to recommend that the promotion of competition should be introduced as one of the most important measures to drive innovation. Competition is a decisive motor, but it tends only to increases the pressure and cannot always improve the ca-pabihty for innovation at the same time. In some cases, havens appear to be important for the development of innovation. It is no coincidence that the application areas of the military, medicine and sport are highly significant areas for technical innovation. In these areas, the cost push tends to be secondary with the result that technical effectiveness can be concentrated on fully, at least for some of the time. The concept of regulatory induced initially limited lead markets for environmentally friendly innovations also refers to such learning areas where new ideas and concepts can develop first of all (cf on this latter subject e.g. Beise, Reimings 2003). 

However, it is not only the intensity of competition bnt also the type of markets and the qnality of competition in snch markets. In the absence of a scientifically based alternative, we considered two idealised market types initially  

Even on the basis of these very rough distinctions, the possibilities for action and restrictions on action for companies can be better comprehended in the case studies, by looking at the markets in which they are active. These competitive conditions constitute a broad scope for impact and vulnerabilities for companies or supply chains with regard to external factors that are closely related to effects arising from their position within the supply chain. 

The manufacturers of a mass product that is far from the end-user, such as cement or concrete, are under extreme price competition and slightest changes in, say, the cost stracture can be decisive. Elimination of water-soluble chrome-VI compounds that cause chromate-induced eczema would only increase the price of the product minimally. And even if the severe price competition did in fact permit this increased margin (which is highly probable in this example), there has been no significant iimovation push. Uirfortunately, this occupational disease is hardly perceived by the public and the costs incurred by this type of eczema evidently can be externalised by the cement industry (and covered by the employer s liability insurance). 

The sources of this distinction were e.g. Piore Sabel 1984, Freeman Perez 1988, Streek 1991, 1992, Hollingworth Boyer 1997. We did not have the time nor the resources for a more detailed analysis and differentiation of these market types . 

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The SubChem project has produced numerous interesting scientific perspectives which require further examination. In the area of framework conditions, questions arise relating to the quality of markets or the type of competition as the main driving forces of innovation. An increased comprehension of the markets where companies (or supply chains) operate also reveals a novel appreciation of their scope and restrictions for action as well as their vulnerability towards other external influences. For example, market research explicidy devoted to the types of competition would be beneficial and provide comparative observations for a more precise classification than we have been able to discern with our resources. 

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