Innovation activity: types, directions, development and financing

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

With the development of industrial progress, the word "innovation" has become a very popular term. In everyday life, innovation has become a symbol of progress and progress. They have taken over almost every area of our lives. Innovative activity in education allows to get more professional specialists, in medicine - lower mortality, in defense - better protection.

Definition

This type of activity can be defined as the introduction of something new into a certain structure of any sphere of human life. Innovation in the economic sense refers to activities that are aimed at improving products and production technologies, as well as searching for new market sectors and expanding the product line.

Among the points of organizing innovation activities, three main ones can be distinguished: the search for weaknesses in the company, the implementation of the process and the organization of the introduction of innovations themselves into production.

Without innovation, the sphere of production cannot exist, due to the fact that any production wears out, and technologies become obsolete. Every large enterprise has its owna scientific complex that allows the company to carry out the development of innovative activities. This is necessary in order to avoid slowing down the technical process.

In addition to your own production, you need to pay attention to the market sector and keep an eye on competitors. It is also necessary to timely analyze your production process at the time of possible improvements and new forms of innovation. If a company is presented on the market with a meager assortment or an outdated product that has not been in demand for a long time, then it will immediately lose the competition.

The need for innovation can arise from various factors, it can be some kind of success of the company, for example, winning a tender auction or expanding the branch network. An important impetus to innovation occurs when there is a major change in the structure of the market, such as the emergence of a powerful competitor or an increase in demand for another product.

Types of innovation activities

Innovation is ubiquitous in all activities. They are given special attention not only in the business environment, but also in the field of education, housing and communal services, and even in the defense sector. This is due to the large state support for innovation. It is worth considering that among the forms of activity, many different types can be distinguished, but scientists distinguish only three main ones.

Sequential

Based on the name, all activities are carried out in stages in all divisions. After conducting innovative research andintroducing them into production, the results are transferred to the top management, which evaluates and decides on the feasibility of introducing the technology. Among the advantages of such a scheme, one can single out the repeatability of the analysis of new products at each stage of implementation, risk reduction and simplification of control.

Among the disadvantages of this method is the difficulty of correcting the shortcomings of innovations when the development has already gone to the next step. This implies an increase in the cost of correcting deficiencies and, as a result, an increase in the labor intensity of the process and an increase in the timing of its implementation.

Parallel

With this scheme, innovation activity is carried out in all departments at once, which allows timely adjustment of the process at all its stages. Among the minuses, one can note the difficulty of controlling the process, since it takes place simultaneously in several departments, therefore this scheme is most often used in small and medium-sized enterprises.

Integral

The previous two implementation schemes imply a complete reorientation of all departments towards innovation. At the same time, current production and the economy of the enterprise as a whole are seriously affected. In order to avoid losses, many enterprises create on the basis of the division, the so-called focus groups, which are engaged in the implementation of innovations, while the main division goes about its usual business. Such a system is called matrix.

Many large companies create on their basis special scientific andresearch teams led by the best specialists, who are often invited from outside. Such a system is recognized as the best in the field of innovation, as it reduces the implementation time, quality improvement, preservation of current production, and simplification of control. This system is suitable for large companies in which the introduction of innovations becomes a current task and innovation is carried out on an ongoing basis.

Venture funds

A special category is the creation of venture capital enterprises. It is one of the most popular forms of innovation financing in American corporations. They create special enterprises on their basis, the main purpose of which is research and development activities for a funding organization.

Usually, such firms are organized for risky innovations that have a high payback period, sometimes up to 10 years. The first venture capital organizations began to be created in the USA in the 70s and reached the peak of popularity in the 90s. They allow financing almost all areas of innovation.

Very often, VC funds are given almost unlimited freedom and funding, as the parent company has exclusive rights to any new product, and often the one who pays great attention to innovation wins the market.

Development Trends

Currently, among the highlights of the development of innovation can be identified:

1. Reduction of regulatory bodies,slowing down the functioning of innovation departments.
2. Creation of additional management structures and divisions that are aimed at strategic innovation.
3. Combining R&D with marketing and manufacturing into multifunctional, versatile structures that focus on testing and innovation.
4. Setting a target course and a motivation system focused on getting the final product in the shortest possible time.

Process

1. Research. Any introduction of a new product begins with the stage of market research, needs and opportunities for improving the product as a whole. This stage is carried out in special scientific centers or research groups within the enterprise. Depending on this, sponsorship comes from the state budget or the budget of the funding organization. Also at this stage, a theoretical testing of a new product for survivability in market conditions takes place.
2. Development. At this stage, the creation of the product itself is carried out, as well as development work is carried out, which reduces the risk of investing in research work, which is a high-risk asset.
3. Introduction. At this stage, the most interesting moment for investors takes place, namely, the commercialization of the project. The goal of any innovative activity in an enterprise is the further introduction of these innovations into production, the capture of a new market segment and, as a result, an increase in profits. This stageis the most expensive, as it requires retraining of personnel, a powerful advertising campaign to promote a new product, and sometimes re-equipment of the entire production. Often, the costs of the last stage exceed the costs of the first stages by dozens of times.

It is worth considering that research activities affect not only the manufacturing sector. Very often, research work is carried out in the marketing and economic spheres. Very often, companies engage consulting firms that have the necessary experience and knowledge to innovate in these areas.

Innovation analysis

A very important element is the innovation management system - it is a management system for all activities, departments that are involved in this and are connected by economic relations that arise in the course of any action. This type of management is part of functional management and an integral part of the whole process, without which the functionality of the activity would be greatly reduced. It is here that they analyze the ongoing changes, their quality and necessity. Analysis of the overall performance is carried out by examining the indicators of the unit that is engaged in innovation, the indicators of the new product and the effect of the introduction of innovations.

Performance Metrics

The indicators of departments usually include the volume of scientific activity, the volume of projects developed within the framework of this activity. The indicators of a new product include the indicators of itscompetitiveness, new product volumes, the number of new products, and economic indicators such as profit and profitability.

Indicators of the effect of innovation include:

1. Financial effect. This indicator is calculated as the difference between the profitability of a new product and the cost of its invention.
2. Budget indicator. Reflects the economic impact on the budget from which innovation was financed.
3. General economic indicators - calculate indicators such as revenue from the sale of the product, revenue from the sale of a license, various loans and borrowings for the implementation of activities.

Economic analysis

In connection with all these indicators, it becomes necessary to conduct an economic analysis of innovative activity at the enterprise, which occurs in the following sequence:

1. The first step is to assess the enterprise's innovative potential, its scientific and technical capabilities and on-farm reserves. Also, an analysis of investments in innovative activities is carried out, indicators of financial leverage are studied.
2. The second step is to evaluate the ratio of costs to the value of new innovations and projects under development. Also, this ratio is compared between the reporting and the past period, to identify the dynamics. After this step, additional reserves can be identified to improve the quality of innovation.
3. At the third stage, an analysis is carried outfinal product, conclusions are drawn for the reporting period and plans for the next year are adjusted.