Innovative development of the economy

The growth rate of modern society depends on the level and ratio of certain parameters of economic activity. An important role is played by the innovative development of the economy, which cannot continue without the development of science. The basis in this case is continuous technological improvement in the production environment. Initially, it is assumed that profits are formed at the expense of innovators and scientists, and not through the material base.

The emergence of the concept

For the first time, the Austrian economist proposed the theory of innovative development at the beginning of the 20th century. Based on his monograph, a new discipline gradually appeared. Many prominent scientists have made their corrections and adjustments. However, it was the founder who first shared the development and growth of the economy. He defined innovation and created a concept that included five key points:

1. Creating a completely new product that consumers have not heard of, or a higher-quality product.
2. Development of innovative production technology not tested in the industrial sector. It may also be a different configuration of the product’s commercial appeal.
3. Opening an unfamiliar market, where trade has not yet been conducted within the selected industry.
4. Search for a new source of production factors, regardless of whether it exists or is being re-formed.
5. Creating another industry organization.

The true innovative development of the economy began with the advent of capitalism, when creative entrepreneurs and individual states interested in new technologies were included in this sector. Discipline was created through high-quality human capital.

The main features of innovation

What principles and indicators are characteristic for an intellectual economy?

• A high indicator of economic freedom, the level of development of science and the quality of life and demand directly for innovation.
• A significant proportion of enterprises that successfully operate due to innovations and produce advanced products.
• Initiation and diversity of existing markets.
• Developed training system and high export of new personnel.
• The ability of an economy to function even in competitive markets.
• Substitution of capital.

The development of innovation is impossible without the formation of new markets. On them, the old structures are converted into a completely different quality. As a separate segment, a market for various developments of new organizational forms for firms and special structures is formed.

Financial incentive tools

The development of innovation is fully associated with the creation and introduction of new technologies, as well as the embodiment of fresh ideas. A number of financial instruments have been developed for stimulation. However, the current mechanisms are not very effective.

One of the basic financial instruments is the possibility of concluding government contracts from some government organizations for special events. In such agreements, the basic characteristics of innovative projects are consistent. Subsidies are often provided to support risky programs.

Of no small importance in stimulating innovative activity is the tax system. The mechanism must necessarily be adjusted to the needs of enterprises. The purpose of tax incentives is to facilitate the financial situation for a business entity.However, the legislation in the field of benefits is not perfect, so many enterprises do not use them.

Necessary infrastructure

Innovative development and stimulation of the process of creating a new market requires a certain infrastructure, as well as special institutions to support the process itself.

Certain institutions must be formed:

• high-tech sectors, industries and industries;
• expert forecasting organizations, networks and communities;
• educational centers, schools and institutes;
• places for technology commercialization and future developments;
• roadmaps to reduce the risks of introducing new systems.

The principle of substitution of capital

With the development of an innovative system, capital is replaced at each stage. Government agencies finance fundamental disciplines directly through grants. This allows attracting research teams competing with each other for the opportunity to receive funds for development and research.

The main goal of the event is to obtain innovative ideas. Although many of them will not be implemented, conditions for the replacement of capital are still present. Patents are acquired by private organizations whose shares are already bought by third-party investors for additional profit. This is how an intelligent economy gets financing in the next step.

After reaching a certain level, companies begin to become interested in more serious corporations. At this stage, foreign investors enter the business, acquiring the development on the basis of which they will create technological innovations. In subsequent stages, the replacement of capital is carried out with greater benefit. Often still non-existent ideas or some developments are laid directly on the basis of new markets.

The role of redundancy and competition

It is impossible to imagine innovative economic development without a large number of our own products or services, as well as agents at each stage of the process. It is redundancy that allows you to progress in a competitive environment, leading to improved quality characteristics of the product and a variety of assortment.

Initially, several markets are expected to grow simultaneously. Redundancy is possible only with a sufficiently high productivity and the availability of high-tech equipment. It is initiated directly by the innovation system, depending on consumer demand. However, competition between specialists allows creating a certain lead on the part of society and economic development over needs. It is in this that the proactive formation of human capital can be traced.

In the framework of the innovative development program, along with science and education, the creation of all kinds of companies acting as developers of advanced technologies is stimulated. High results can be achieved through the construction of specialized centers designed for the joint use of scientific equipment, special tax benefits and subsidies. In parallel, an excess of financial institutions should be formed to increase competition.

The process of creating new markets

Only through the creation of new markets does innovative development take place. On them, the old structures are transformed into a completely different quality due to intellectual property, special research and the release of high-tech products. Separate is the market for various developments of certain organizational forms for enterprises and other economic structures. This is necessary for the existence of corporate educational institutions, various small business clusters, and trading platforms in the field of innovation.

Other markets can be divided by field of activity.They can be different:

1. The market for innovative goods and services, as well as the results of their expectations, presupposes a form of trade relations between the consumer and the owner of intellectual property.
2. The market for services involves the operation or rental of sophisticated high-tech equipment. It is necessary to obtain a particular product.
3. The intellectual property market has a stimulating effect on scientific and technological progress. Objects of patents and licenses in this case are equivalent to ordinary goods.
4. The market of intellectual labor is not complete without labor. However, mental capacity is taken into account. The modern concept of intellectual work is determined taking into account the place in the system of division of labor.
5. An investment market is a platform for investing directly in products or developing intellectual activity. In this case, the investor gets the opportunity to apply them in entrepreneurial activity.
6. The knowledge and ideas market is not fully organized, so it is difficult to give examples of companies that have managed to fully implement the basic principles. However, it has great potential.
7. Innovation market implies the totality of trade relations that arise during the creation, transfer or development of certain technologies, products and services. It is highly technological.
8. The market of innovative managers and commercial agents helps to find people who are able to manage scientific developments.

Key Steps to Efficiency

The main task of any organization or any other structure is the proper management of innovative development. The whole process can be divided into several stages, at each of which certain functions are performed:

1. The development of market relations or the search for new opportunities allows you to clearly define the necessary needs. This is done by research and marketing departments.
2. The development of the basic concept is the prerogative of management services and design departments. They solve the problem that allows you to find successful technological solutions to determine the needs of the market.
3. Selecting a specific project for the implementation of future plans. At this stage, an analysis and consideration of possible risks is carried out. This is done by the leaders of the organization.
4. Refinement of existing solutions and product development. At this stage, products or any services are made attractive to end users. Engaged in the implementation of enterprise engineers and technology units.
5. The fulfillment of the intended goals is to create goods and transport them to places accessible to the consumer. Involved in the production halls and sales departments.

At all stages of the innovative development of the organization, two basic aspects can be distinguished - creative and organizational. The first of them analyzes the main problems of enterprise development and develops new solutions. With regard to organizational aspects, they consist in defining new functions and developing fresh concepts.

How is the management process built?

At the creative stages, scientific and innovative development should be carried out in a free mode, allowing free access to information resources to generate fresh ideas. At the organizational stages, it is desirable to completely debug and regulate all ongoing processes.

Thus, in order to increase efficiency, it will be necessary to create two modes at once - free and intense. The first of them is necessary for creative development, and the second - to implement the existing concept and bring products directly to the market.

The project selection stage can be considered transitional between the two above stages.The management of the innovation process must be built in strict accordance with the stage, otherwise its effectiveness at a particular stage may be significantly impaired. In any case, this will slow down the development of the organization.

The main factors of influence

The success of innovative development is influenced by a number of factors. You can evaluate them through a special analysis that allows you to correlate the level of enterprise readiness to use new technologies. The scientific and technical base supported by a competent investment policy forms potential opportunities. This process should include financial and educational units.

Innovative processes can proceed slowly if the company does not have well-functioning external communications. In today's market it is necessary to quickly respond to any changes from the outside. A correct assessment of the current situation is the key to the successful preservation and possible development of the existing potential.

Company policies must comply with certain rules. It involves the full use of creative and scientific resources. Of great importance is the ability of leading structures and marketing departments to analyze the information received and on its basis to implement a specific project.

The organization’s potential can be influenced by several factors:

• communication with the outside world;
• service life and operation of the created products;
• properties of the manufactured goods;
• the availability of information on the situation in the innovation market;
• coordination of the work of marketing structures;
• practical interests of the organization;
• personnel policy in terms of qualifications and technical education of employees;
• technical characteristics of the equipment used and options for modernization;
• internal microclimate.

Innovation development strategy

Any process requires a certain sequence of actions. When adopting an innovation development strategy, it should be borne in mind that any product has a specific life cycle, which is determined by the following stages:

1. The origin of the idea. In this case, some shape, scope and principles of the proposed product.
2. Creation of a product. At this stage, the idea is converted into specific products that appear in the public domain on the market.
3. Approval of positions. The finished product proves its worth in a competitive environment, gaining the trust of customers.
4. Product stabilization. The released product has reached perfection in the field of operation. There is nothing more to perfect.
5. Simplification of goods. Gradually, products begin to lose their existing qualities, as more technologically advanced products appear on the market.
6. Significant decrease in sales. There is an almost complete drop in consumer demand.
7. Attenuation of production activities. Production volumes are significantly reduced for conversion.
8. The restructuring of the production cycle. Special events are held to stop the line.

There are the following types of strategies that make it possible to engage in the development of innovative technologies:

1. Offensive. The task is to concentrate all efforts on the narrow direction of production activity. One highly effective product is being introduced into the market.
2. Defense. This strategy is mainly adhered to by enterprises occupying a stable market position. Their technological processes are usually debugged to automatism.
3. Intermediate implementation. In such a situation, a phased introduction into accessible market segments is expected. Initially, monitoring and analysis of possible competitors is carried out.
4. Absorption.Business in this case is conducted according to methods when not only our own developments are applied, but also the rights to innovative solutions of other organizations are acquired.
5. Imitation. The strategy boils down to the fact that the company copies the products of its competitor and brings it to the market. The characteristics are not changed.
6. Piracy. This option is quite specific. The greatest return is possible at the initial stage of formation.

Innovative development of Russia

Just a few years ago, all the talk about innovative entrepreneurship in the Russian Federation came down to whether it exists or not. Now tens of thousands of enterprises operate on the territory of the state, carrying out the development, production and supply of goods that are manufactured on the basis of intellectual property.

The development of innovative education has borne fruit. However, there are factors holding back the improvement of technology in Russia.

• Lack of a clear legal framework.
• The minimum number of areas for development.
• A small amount of investment resources for possible technological re-equipment.
• Weak development in the field of innovative entrepreneurship.
• Lack of quality financial mechanisms.

However, it should be said that the innovative development of Russian companies is a matter of time, since the Russian Federation has significant scientific and technical potential.