THE POSITIVE FUNCTIONS OF TRADE SECRETS: INNOVATION, COMPETITIVE ADVANTAGE, AND EXTERNAL ECONOMIC DIPLOMACY IN THE CONTEXT OF 80 FIELDS OF APPLICATION

Dr. Siddik ARSLAN

doi:10.5281/zenodo.17855255

Authors

Dr. Siddik ARSLAN Deputy Secretary General of Erzurum Metropolitan Municipality - Türkiye.

DOI:

https://doi.org/10.5281/zenodo.17855255

Keywords:

Trade Secret, Innovation, Competitive Advantage, External Economic Diplomacy, Corporate Knowledge Management

Abstract

This study examines the positive functions of trade secrets in the dimensions of innovation, competitive advantage, and external economic diplomacy within the context of eighty different application areas. In the knowledge-based structure of the global economy, trade secrets emerge as a fundamental legal and economic instrument that enables enterprises to gain competitive advantage by protecting their distinctive knowledge assets. The central research question addresses through which mechanisms trade secret protection strengthens innovation processes, enterprises' competitive capacity, and countries' external economic diplomacy effectiveness. The study hypothesizes that trade secret protection increases innovation capacity by encouraging research and development investments, consolidates competitive strength by supporting enterprises' differentiation strategies, and enhances external economic diplomacy effectiveness by establishing a reliable foundation for international cooperation. Designed as an analytical view article, this study presents a descriptive and analytical framework through a qualitative research approach. An interdisciplinary perspective has been constructed by integrating Schumpeter's creative destruction theory, Porter's competitive advantage theory, resource dependency theory, and institutional theory. The findings demonstrate that trade secret protection generates multi-layered effects extending from the micro level to the macro level, performing positive functions across a broad spectrum from small and medium-sized enterprises to multinational corporations, from supply chains to sectoral clusters. The research reveals that the concept of trade secrets is not merely a confidentiality mechanism but a determining variable in shaping economic development strategies, corporate governance practices, and international relations. The study provides actionable recommendations for innovation policies, competition law regulations, and external economic diplomacy strategies.

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