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What is innovation management?

The innovative activity of the economy has become a central socio-economic process of industrialized countries. Changes in the factors of production are expressed in the increase of the informational, intellectual, and innovative components. Innovation management is functional management, the object of which is innovation processes in all areas of the economy. Innovation goals are part of the overall goals of the system.

They are related to the need to update the processes carried out in the organization. The innovative development of production places new demands on the content, organization, forms, and methods of management.

This determines the need for management that is focused on managing the processes for updating all elements of the production system. The theory and practice of innovation management in a short time increased its importance in management.

Innovation management is a process of planning, organizing, motivating, and controlling

Innovation management is a process of planning, organizing, motivating, and controlling the processes for developing and implementing innovations from different levels, designed to achieve the innovation goals of organizations and administrative units at different management levels. Practical and scientific parts can be separated in innovation management.

The practical part is expressed in the implementation of specific management actions in the various functional areas. At the heart of these actions is a certain methodology, conceptual apparatus, approaches, the development of which relates to innovation. Innovation management is a process of constant renewal of various aspects of the company’s activities.

The essence of the concept of “innovation management” some authors consider in three aspects: “as a science and art of innovation management, as a type of activity and decision-making process in innovation management and as an apparatus for innovation management.” Such a comprehensive examination of the nature and principles of innovation management contradicts the narrow understanding of functional management.

Innovation management as a system is a set of formal and informal rules, principles, norms, statements, and value orientations that regulate the various areas of innovation. Functional innovation management is aimed at effective management of the processes of development, implementation, production, and implementation of innovations.

Tasks of the innovation management are ensuring the optimal functioning of the production system, synchronization of the functional subsystems, improvement of the personnel management system and control.

The goals of innovation management are related to the mission of the organization, its philosophy, traditions, and the life cycle of the organization. The innovation goals are related to the development of fundamental innovations, work on patenting and licensing, acquisition of know-how of new industrial designs, industrial signs, etc. Reference: Industrial Management.

Priority goals of innovation management are the activation of innovation, the active movement of new goods and technologies in the market, further specialization and diversification of production, economic development, and entry into new markets.

Planning is the main function of innovation management, which includes managing the system of activities to analyze the external and internal environment, forecasting the organization, selecting and implementing strategies to achieve goals, developing plans and their implementation.

The planning process is divided into long-term, medium-term, short-term; for planning purposes – R&D, production, supply, marketing, etc .; by factors of production – modernization of equipment, improvement, renewal of fixed assets, provision of raw materials, etc.

The organization of innovation as a function of management refers to the creation of organizational structures for generating and implementing innovations, providing them with the necessary resources to implement the strategy for enterprise development and implementation of planned innovation activities.

The process of communications in innovation management has increased requirements for the type and forms of communication in management. The nature of innovation transformations, the high risk of entrepreneurship, the alternative approaches and the variety of solutions requires a variety of forms and differentiation of types of communications in the process of creating innovations.

The future of innovation is closely linked to the proliferation of communication networks and the optimal organization of information channels. The control in the innovation management as a function of management includes reporting, quantitative and qualitative evaluation of the results of the organization’s work in the field of innovation.

Features of modern innovations

With modern innovations, the share of new products in the turnover of the organization is constantly growing, reducing the life cycle of the product (LCP). The time for market participants to react to innovations is also decreasing, while their radius of spread is rapidly expanding. Innovations are cyclical, with a repetition cycle of 50 years over the last 200 years.

There are also “eternally alive” products, for example, products of the cosmetics, ceramics, food industries – cognac “Napoleon”. The new generation of computers is morally obsolete in 2-3 years, while the duration of their physical life is about 30 years.

The essence of innovation

The concept of innovation was introduced into economics by the Austrian (later American) scientist Joseph Schumpeter (J. A. Schumpeter, 1883 – 1950) in the first decade of the twentieth century.

In his Theory of Economic Development (1911), he saw innovation as a means of overcoming economic crises. Based on the theory of long conjunctural waves for business activity, J. Schumpeter discovers a new opportunity to get the system out of a crisis by changing the process, as a result of creating and implementing innovations. According to him, with the help of innovation, the organization can use new competitive approaches, different from the old price forms of competition. J. Schumpeter understands innovation as “new combinations and changes in development”.

J. Schumpeter also introduced the concept of innovation cluster – a set of basic innovations at a certain point in time. There are many approaches in the literature to the interpretation of concepts related to innovation. In terms of ideological content, however, they are similar, but there are minor differences between them. The problem of innovation, seen as a key factor in industrial dynamics, is not new.

The concept of innovation first appeared in the research of foreign culturologists in the nineteenth century and was the introduction of some elements from one culture to another. The term “innovation” comes from the Latin word “innovato”, which means renewal or improvement. Reference: “What is Product Innovation“, https://mpmu.org/what-is-product-innovation/

In general, this term can be understood as a special cultural value, tangible or intangible, which at the appropriate time and place is perceived by the individual as new. The laws of technical innovations began to be studied in the early twentieth century. In some literary sources, the terms novelty, innovation, innovation are usually identified. Various inventions, new phenomena, types of services, or methods only gain public recognition when they begin to spread and now in their new quality become innovations.

The term innovation (from the English innovation) is synonymous with the Bulgarian word innovation. By novelty is meant a new order, a new custom, a new method, an invention, a new phenomenon. Innovation means that novelty is used. The phrase “innovation” means the process of applying novelty. Novelty is a potential innovation, a new solution before its implementation.

From the moment of transition to dissemination, the novelty acquires a new quality – it becomes an innovation (innovation). The process of developing an innovation is usually longer and more expensive than the process of creating innovation. The implementation phase sometimes lasts for years (even decades).

The process of implementing the novelty of the market is commonly called the process of realization. The time interval between the appearance of a novelty and its transformation into an innovation (innovation) is called an innovation lag. Innovation is the result of creative and investment activity, design, development, and distribution of new types of products, services, technologies, and organizational forms at different levels of government.

By Robert Brown

Robert Brown is a longtime manager of a technology organization and author of a management book. In his spare time, Mr. Brown helps students get a better education by helping to publish free study materials.

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