Two major occasions -

1. You fail miserably.
   
2. Your competitor succeeds spectacularly.
   

It looks to me that the second reason has bigger and profound impact on individuals and groups - even more than the first one.

Have a look at this article for a research paper on the subject.

Feel free to air your views.

Excellent read!

Innovation, in my opinion is fueled by an innate desire of an individual or organization to evolve. This desire in turn is catalyzed by external agents... Competition, no doubt promotes innovation and complacency invariably leads to decline. The classical case is that of Nokia. It reached the peak but failed to sustain due to an absence of innovation. While Nokia stuck to its core products and offerings, Samsung capitalized on the growing android mania and took away the entire market share. Samsung's might in the domain of innovation has reached such a level that it is giving tough fight to Apple, the innovation leaders of the past decade!!!

Whatever be the fuel, innovation is the key not only to succeed but also to beat the successful out of competition!!!!