The process of globalization and technology development are the catalysts of innovations, productivity, and resulting of intensifying competition not only between organizations but also between entire nations. Because of this global trend in the modern environment a sustainable competitive advantage will only reach organizations that are able to more effectively raise the total innovative performances. To create an organizational culture that promotes the creation and free flows of ideas, innovation developing, open knowledge transfer with the continuous development of interactions with consumers is the basis of achieving sustainable competitive advantage of organizations. The growing importance of innovation in the process of achieving sustainable competitive advantage is the reason why the concept of innovation does not only imply significant improvement of products and processes, but increasingly includes organizational and marketing innovations as well. For the above reasons, this paper presents the conclusions of comparative analysis, as well as numerous examples of research projects where the results obtained indicate that the right innovation becomes the crucial factor of differentiation and achievement of sustainable competitive advantage of organizations, and they also show the current state of innovation in the European Union and in the economy of Republic of Serbia.