Article Review: Innovative enterprises
According to the process of innovation, there are different models of the innovative enterprises. One of the criteria for their separation is methods of raising capital for the innovative projects, funding scientific research and development of the new products. In case of successful commercialization, capital invested in the innovation projects can bring significant profits. The essence of innovation is not just an invention. It involves a skillful organization of implementation of innovations and creating of other ones. Furthermore, innovation requires a special innovative and anti-bureaucratic style of organization management, focused on innovation, coordination and harmonization of activities. It is essential in order to develop and implement innovations for all the structural links and services. However, investing in the innovation is considered quite risky.
Investing in an innovative project, company can have many risks. If it is so, then why so many companies invest in different projects and developments? It should be pointed out that there are many innovative investors, venture capital funds and state support of innovative business, which usually do that. In fact, an innovative business, comparing to any high transaction in the stock market, is very risky, but it usually brings a high profit. Venture capital funds invest in the innovative products such as the start projects that are already launched and those, which bring big profits (i.e. a project that pays for the costs of other projects, brings greater rate of investor’s profit and allows making further development of the new ideas and new products). They also include unsuccessful projects, which are expected to experience certain developments and cause large losses. The system of financing of the innovative projects is based on the principle of 1:10:100 increasing the capitalization of the project and income participants (Hasset, 2008). If, for example, in the initial stage investor invested $ 1, then the successful launches of the project give him at least $ 100. Under the very favorable circumstances, he can receive even more. According to the statistic, one of the 10 innovative projects usually makes a profit of 100 times greater and pays the costs of the other unsuccessful projects. Therefore, investing in the innovative projects is profitable business.
Introduction of innovations is one of the win-win methods of breeding business to a new level. The reason for this is simple. Indeed, each innovation implies something new and original. Thus, the competition in this business is minimized, and one can quickly gain the customer base and take one’s own place in the market. Innovation is a key to success and prosperity of any successful business. Davila et al. (2006) mentioned, "Companies cannot grow through cost reduction and reengineering alone... Innovation is the key element in providing aggressive top-line growth and for increasing bottom-line results". The main lines of the innovation are, first of all, making changes that improve the properties of an existing product and, second of all, the realization of the entirely new inventions and discoveries. In this case, one will spend less cost on production and realization of the product and receive more opportunities and prospects.
The experience of economic development of different countries confirms that the evolutionary process in the economy was gained through the innovation. Being the main way of development of the society, the innovations entail modernization and restructuring of the economy. Therefore, a country that stands apart the "innovation competition" ranks last in the hierarchy of the global community. Nowadays, an undisputed leader in this competition is the U.S., because it accounts for over 60% of all technical innovations (Heyne et al. 2010). Thanks to the innovation processes, the U.S. has become one of the richest countries in the world.
Taking everything into account, it should be mentioned that an innovative activity is an integral part of the industrial and economic activities of modern organizations that focuses on updating and improving of its productive forces, organizational and economic relations. Organizations, which become members of the innovation process, create competitive products that spread rapidly and bring commercial benefits to both innovators and society. Innovative activities are based on improving and modifying of existing products, finding other areas of their applications, distributing them to other market segments, giving them new properties, and making them serve the public need. Therefore, investing in various innovative projects will raise the country's economy and speed up the pace of progress of all mankind.
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