Innovation and Knowledge Based Competitiveness : Corporate Practices and Economic Policy in Hungary

International competitiveness of countries and corporations is the function of their knowledge-based economic performance. Economic positions among countries and inside countries are redistributed on the grounds of success or failure in knowledge based economic activities. It is not a coincidence that innovation performance is again in the limelight, for market success of companies can be maintained temporarily, only in the short run by cost-effectiveness and improved rate of return. Permanently positive market position can be achieved only by launching successful new products and services. Companies, especially in the times of economic crisis, have to meet two requirements at the same time. On the one hand, firms are to improve cost-effectiveness in order to be succeed in the price-competition, on the other hand they are to intensify their activities to launch differentiated innovative products and services in order to increase market potential, growth-rate and market success. Firms need to rethink their relation to innovation and customers. The key in this renewal process is the successful innovation management and innovation marketing