What Impact Does Innovation and Sustainable Entrepreneurship Have on Competitiveness?

1. Introduction

Entrepreneurial activities, as well as all of the factors underpinning their existence, and their influence on regional economic development, have all been the subject of study by various different authors (Birley 1985, Kirchoff and Phillips 1988; Storey, 1994, Lafuente, 2010; Ferreira et al. 2016). Similarly, the question of regional development has awoken the interest of a diverse range of national and international researchers (Cooke, 2002; Farinha et al, 2014). Entrepreneurship correspondingly seems to have emerged as a factor contributing to regional development (Parrish, 2010). In terms of the relationship between entrepreneurship and economic growth, Wennekers and Thurik (1999) conclude that understanding how entrepreneurship takes place is an essential factor for economic growth. The NCOE (National Commission on Entrepreneurship) White Paper (2001) maintains that the greatest contribution made by entrepreneurship at the local level stems from its innovation. Thus, innovation combined with entrepreneurship drives the following benefits at the local level: 1) quality of life; 2) generating new employment; 3) fostering economic competitiveness; and 4) boosting economic growth and wealth. Acs and Varga (2005) developed their research based upon two relationships: geography and technology, and entrepreneurship and technology with the argument that these relationships are fundamental to any explanation of economic development. They conclude that the effects of agglomeration on technological change, or should we prefer, on innovation, are positive and statistically significant. The interest of our research encapsulates contributing to the literature on this field of study approaching just how environment and innovation variables foster a greater impact on entrepreneurial activities. To this end, we applied aggregate data at the national level gathered by thee Environment, Population, International Trade, Labour and National Accounts Statistics, by the Organization for Economic Cooperation and Development (OECD) between 2005 and 2012 for its 35 member states. Our research findings convey how total patent numbers hold a statistically significant effect on Real GDP growth. As regards the three types of environmental patents, we may report that environmental management patents and environmental patents hold a statistically significant positive effect on Real GDP growth.