In this modern world, the contribution of science, innovation, and new technologies is a decisive factor in social and economic development. With their help, the volumes of production of products, goods, and services and their variety are constantly increasing. At the same time, a huge amount of primary resources and energy is used, the negative impact of modern production and consumption on the environment is growing, the costs of the utilization of industries that have completed their life cycle are increasing. New generation technologies are focused on building up their progressive advantages and keeping the influence of negative factors of socio-economic development within the prescribed limits.
Definition of Innovation
All business leaders want to increase the return on innovation and cope with the best manufacturing challenges. Many of the necessary components are often already in place in a company, but innovation often turns out to be something like a roulette wheel. There is a solution to such problems – this is the so-called total innovation.
Many people interpret the concept of innovation in completely different ways. We believe that innovation is a new way to use knowledge, tangible and intangible assets to create more value. Innovation can take many forms: it can be new products, services, business models, processes, or management practices.
Total innovation implies the ability of managers and employees to consistently and continuously involve the entire company in the innovation process. However, success does not depend on the achievements of individual talented developers or teams. Companies that adhere to the principle of total innovation develop a special type of corporate culture that stimulates innovation: the process of evaluating new ideas and proposals is well-tuned, the project portfolio is balanced, representatives of different functional areas effectively collaborate in working groups and use new tools and processes to ensure optimal a combination of creative energy and discipline. Companies whose leaders believe that it is enough to innovate from time to time will not be able to implement the practice of total innovation.
According to Taxcloud, innovation is not the same as invention or R&D. R&D is only necessary, but not a sufficient condition for successful innovation. There is at best a very weak correlation between R&D costs and the return on them, or even between the number of patents issued and the financial results of a company, and often there is no direct relationship at all. In other words, increasing R&D costs does not guarantee success. Nonetheless, managing R&D costs is one of the key pieces of the puzzle.
Innovation is essential in any economic environment. Even the economic downturn should be used as an excellent pretext to rethink the direction of investment in innovation. The crisis prompts us to look for new opportunities for growth. There are many examples of how truly revolutionary innovations were born in an extremely unstable environment. Such as the introduction of the AT&T cordless telephone in 1947 or the famous IBM PC 5150 personal computer in 1981. These innovations were so important for their time that they completely changed the rules of the game in the high-tech market. Meanwhile, both 1947 and 1981 were periods of recession in the United States. Companies can reduce or increase their investment in innovation based on trends in the prospects for a particular product category or changes in the competitive environment, but there should be no talk of stopping investments altogether.
Main Elements of Innovation
The main elements of innovation are innovative technologies, programs, and projects, as well as the subjects of innovation that carry them out. As the most important subsystem of innovation, innovation infrastructure is singled out, which is focused on promoting and supporting innovation. Its main elements are, firstly, the Technology Transfer Center (TTC) – organizations that facilitate the transfer of intellectual property, under certain conditions, by its owners to companies for the production of goods and services.
Secondly, these are seed funds, the main task of which is to provide financial and economic support for innovative activities, as well as the process of financing scientific and technical activities. Third, “business incubators” which are catalyst centers, and outsourced engineering companies which are a key trigger of business development. For example, you can easily get mechatronics design services at Engre.co or come up with any technology solution at the platform. Fourthly, innovation and technology centers that support the technological development of entrepreneurship.
An innovative type of competitive behavior is a competition between entrepreneurs for more favorable conditions for the production and sale of products, for the opportunity to obtain the greatest profit by creating and introducing new goods and services to the market for the manufacturing and consumer sectors. Actually, the goal of those participating in the competition is to come forward and break away from the producers of goods (services) already familiar with the market. The innovations introduced at the enterprises are mainly aimed at the following economic, financial, and production aspects of the activity:
● Replacement of discontinued products;
● expanding the range of products;
● preservation of traditional sales markets;
● creation of new sales markets;
● reducing the cost of wages;
● reduction of material costs;
● reduction of energy consumption;
● ensuring compliance with modern costs;
● improving product quality;
● reduction of environmental pollution;
● increasing the flexibility of production.
It should be noted that time, which is currently the main criterion for assessing the competitiveness of firms, plays an important role in the development and implementation of innovative projects.