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Innovation plays a key role in building competitiveness and sustaining economic growth.The reason of this increased competition has forced companies to develop new products and explore new markets in order to meet the needs and wants of consumers competitively. Knowledge sources play a crucial role to understand consumer needs and wants. This paper aims to explain effects of using knowledge sources on product and process innovation. Knowledge sources are specified as market sources (suppliers, customers, competitors, and consultants), institutional sources (universities, public research institutes) and other sources. Necessary data is gained by CIS–4 (Community Innovation Survey) which was based on the OECD’s Oslo Manual. This survey is implemented in the chemistry industry. In the part of the methodology correlation analysis is applied between knowledge sources and product innovation; knowledge sources and process innovation. Differences of using knowledge sources for product innovation and process innovation are explored. It is expected to find effect of knowledge sources to increase product or process innovation of firms.