The efforts to liberalize the world trade that started with the General Agreement on Trade and Tariffs (GATT) on the one hand and with regional integrations on the other hand after the World War II and the acceleration of globalization since the beginning of 1980s have caused the abolishment of borders among the countries. The developments in information and communications technology and the increase of the movement of capital have caused the economic structures, legal systems and life styles of countries to become similar. With the disappearance of protective tendencies on world trade, there has been an increase in the exporting countries and exported products and also the similarity of consumption patterns along with globalization has also increased the world trade. Therefore, as many countries produce and export similar products, the increase of international competition has become indispensable. Within this intense competitive environment, the necessity to produce highly competitive products has caused to invent new products or to improve the existing products, which is called the process of innovation. Within this scope, the factor of innovation represented by R&D activities and Patents has become an important element of competitive power. This study will therefore first try to reveal the relationship between innovation and competitive power, and this will be followed by an analysis of Turkey's situation. (C) 2015 Published by Elsevier Ltd.