The Challenge of Manufacturing Innovation: Industry, Rurality, and Competitiveness in the State of Georgia

In a globalized market environment, the competitiveness of manufacturing – which we understand as the ability to make and sell products while maintaining or increasing real income – is influenced by many factors, including the growth of productivity and the exchange rate. In this paper, we focus on the role and extent of innovation as a basis for maintaining manufacturing competitiveness. Innovation encompasses steps and activities involved in the introduction and deployment of new or improved ideas within and between companies. Innovation includes product design and development, the development of new processes, organizational innovation, innovative customer service approaches, and the development of innovative linkages with other firms. In understanding innovation, it is important to consider how firms identify, acquire, develop and implement innovations, as well as the context, resources, values, knowledge base, and leadership that contribute to innovation. Successful innovation not only affects the firm engaging in it, but frequently has important “spillovers”, leading to additional benefits for users, suppliers, and regional industrial clusters as well as to the innovating firm.