Innovation is a certain kind of innovation in the economic sphere of human life. Their role is quite high, as they are responsible for technical progress in production, which affects the quality of products. Innovation functions are the basic elements through which the concept manifests itself.
Essence of definition
The term combines two definitions - innovation and innovation. The meaning of the main concept is formed precisely on the basis of these two elements.
Innovation implies the emergence of something new that did not exist before. An innovation is a change already achieved, a certain result of the introduction of innovations.
The first option could be some kind of research, development, or specific we alth.
The second is formed by discoveries, inventions, patents or the results of some research. Simply put, the two processes are interconnected. As a result, they form innovations.
The concept and functions of innovationare strongly interconnected, as the latter show the main goals of introducing innovation to production.
The definition entity has the following features:
- this is a completed action, the result expressed by a material good;
- this is an innovation to improve production;
- an innovation that implies a certain investment of finances in equipment and technology.
Invention and discovery - correlation of concepts
The main functions of innovation do not include invention or discovery. It is important to understand the difference between all three concepts so as not to confuse them later.
The first means the latest appliances, equipment, parts or tools. They must be man made.
The second is formed due to the acquisition by a specific person of still unknown knowledge, random observations of phenomena or processes never seen before.
Innovation is generally accepted to be contrary to discovery.
Main differences between concepts:
- As a rule, a discovery or invention serves as the basis for creating something, and innovation takes place already in a well-established, established production. She upgrades him.
- Innovative processes are planned by a group of people for a considerable period of time, and a discovery can be made in a few minutes by one person. Sometimes, he does not even have to be an inventor, the main thing is to get to that time and place.
- Opening sometimes has no purpose if done without preparation, by accident. Innovative progress is achieved in order to benefit later, improve production, improve work efficiency, as well as product quality.
The appearance of the term
The concept and functions of innovation were introduced by the Austrian scientist Josef Alois Schumpeter at the beginning of the 20th century. In his study, the famous scientist was looking for new ways of economic development, considered possible new innovations, as a result of which he fully described this process. His work helped to change many industries for the better, it completely destroyed the established opinions regarding the ways of modernization.
The scientist suggested that there could be only five variations of changes:
- introduction of new technologies and technical means for production;
- creating products with hitherto unknown properties;
- using the latest raw materials;
- comprehensive changes in the production itself, as well as new methods of logistics;
- search for new markets.
J. Schumpeter began to apply the concept in the 30s, saying that the process is possible only if five points are observed, as well as taking into account the functions of innovation. He also believed that innovation is the main source of profit, which is why it is so important.
Today the role of the term has increased significantly. This is explained by the fact that it is a powerful weapon of competition in the market economy. Innovation leads to a number of consequences:
- The cost of goods decreases, respectively, and its total cost.
- Profit significantlyincreases due to increased demand.
- There are more and more needs.
- Financial savings of organizations are growing.
- Production status or rating gets higher.
- New markets are emerging. Particularly external.
Innovation features
The concept most clearly manifests itself in functions. They are responsible for ensuring that the properties of innovations manifest themselves in this plane to the fullest. They also show the main purpose of the definition in a particular country and its role in the life of every person.
Innovations of various kinds are a commodity in many markets, and they are often sold for money, that is, a kind of exchange takes place. Such funds perform a number of properties that help the entrepreneur or investor-seller in the future to continue to sell a similar product. This is due to the fact that the funds received are able to cover all costs and help in creating new innovations, they are profit, so a person has a motivation for further identical exchanges.
On this basis, innovation performs the functions:
- Reproductive.
- Investment.
- Stimulating.
It is the complex of all three that is very important for innovative progress.
Reproductive
The function of innovation management includes reproduction, which indicates that such progress is the main source for financing productionand its subsequent expansion.
All the funding generated from this innovation helps create entrepreneurial profits. The latter concept, in turn, is the basis for establishing the effectiveness of progress, as well as a source of various resources.
All amounts can be used to increase the volume of activities related to production and trade.
The essence of the function is formed from the constant profit from the implementation of innovations, as well as from their use as a basis for obtaining finance.
Investment
This function, as you can see from the name itself, is aimed at ensuring that the funds received as a result are directed to capital. This will become the basis for subsequent profit. Capital is used in all sorts of ways, often as an investment in investments or in the creation of new innovations.
The essence of the function of innovation of such a plan is the orientation of capital into investments.
Stimulating
This option is aimed at the fact that the businessman sets himself a specific goal, achieves it and immediately makes a profit. For example, he wanted to introduce an innovation into a specific commercial entity, and he immediately succeeded, since such a production needs urgent modernization.
Moments like these serve as a good motivation for an entrepreneur, because of which he will constantly monitor demand in the future, improve his offers using the latest technologies.
Sothe stimulating function implies that the businessman is motivated to follow up as a seller-investor.
