Analysis of relationship between technology and competition in network economy

While the process of entering the knowledge based society affectseconomy in all aspects, the opinion of the firms/industries about competition haschanged. Particularly the knowledge/innovation competition developed as abasis to the activities of using information intensively in the field of competitionand of research and development depends on making technological innovationof firms consistently. Technological innovations within the framework of thebasic feature of the network economy evantuate in parallel with networkorganizations based on the mutual interaction among firms/industries.At this point, in the empirical section of this study, technologicalinteraction model in the network economy has been edited and the hypothesis of?the main dynamic of industrial development aiming at explaining sustainablegrowth and sustainable competition is demand-pull and technology-pushinnovations arose from network economies (technological interaction) in termsof national economies? has been tested within the framework of the so-calledediting. In order to explain the technological changes in automotive industry inTurkey, the technological alterations in the sectors which have backwardlinkage with the aforesaid industry has been taken into account.To the findings obtained, the technological change in automotiveindustry arises from both sector itself and the technological changes in thesectors which have backward linkage with automobile sector in the networkinteraction. Besides the change in the automotive sector affects also the sectorswhich have backward linkage with the automotive sector. So, it can be said thatthere is a mutual interaction among the sectors in question. In accordance withtheoretical framework, it has been evaluated as technology-push innovationwhen the technological change in the automotive sector is affected by the sectorswhich have backward linkage with the so-called sector and it has been evaluatedas demand pulled innovation when the changes in the automotive sector causetechnological changes in the sectors which have backward linkage with it.Otherwise, it has been verified that there is a mutual interaction betweentechnological change and competition power by studying the effects oftechnological changes in automotive sector to its own competition power. But, ithas also been showed that the effect of technological change in the competitionpower is weak. Another point not to be sneezed at all is the opinion thatcompetition power of the automotive sector can be explained by the exogenousvariables besides the technological change.KEY WORD: 1) Network Economy, 2) Product and Process Innovation, 3)New Approaches in Competition, 4) Technological Interaction Model, 5) DEA andVAR Models