Capitalism:-

Capitalism can be defined as an economic system based on private ownership of the means of production and the creation of goods and services for profit. It is characterized by competition free market and the accumulation of capital.

Following points describe how capitalism encourage innovative and competition :-

1. Innovative activity in capitalist economy is much more pervasive.
2. Innovative spreads more quickly than in non market economy.
3. Capitalist provides incentives to the innovators which helps in the development and improvement of different sectors.
4. Capitalism encourage competition as it forces other businesses to increase their efficiency, provide quality products at cheapest price.
5. Capitalism encourage business to keep their innovation under wraps or hidden so that other businesses can not take those innovations and use them for their own benefit or profit.

Conclusion:-

Capitalism encourage innovation and competition in both healthy and unhealthy manner.
Because of capitalism innovation increase in business field. Business enterprise either it is small or medium maximize their efficiency, produce quality products and offer them at lower price.
Business hide their innovation from other businesses, develop their management to increase productivity.Private businesses compete to provide consumers with goods and services that are better, faster, and cheaper.Provide a powerful incentive to work harderInnovate more,Produce things more efficiently is what capitalism seeks to.