Innovation Management

This work is a review of chapter 1 of the book “Managing innovation: integrating technolog-
ical, market and organizational change” by Tidd & Bessant (2020). According to the authors, the
role of innovation in the economy is currently growing rapidly. It is impossible to imagine the mod-
ern world without both the innovations that have already been implemented and have become famil-
iar, and without future ones that contribute to further evolution. Most scientists agree that innova-
tion has become the main driving force of economic and social development.
Innovation is the final result of innovative activity, embodied in the form of a new or im-
proved product introduced on the market, a new or improved technological process used in practical
activities, that is, commercial benefits from practical use. An innovation developed but not imple-
mented in practice is called an innovation. In market conditions, a sign of innovation is considered
to be its consumer novelty. In modern conditions, one of the motivations for creating innovations is
competition in the market, that is, innovations are connected with the market. The relationship of in-
novation with the market is interdependent: unsatisfied market demand stimulates the creation and
introduction of innovations; in turn, the appearance of innovation in the market changes the ratio of
supply and demand, forms new market segments, generating new market needs.
The analysis of entrepreneurial activity in countries with developed market economies
shows that there are two models of entrepreneurship: classical and innovative entrepreneurship.
Classical entrepreneurship is a traditional, conservative entrepreneurship aimed at maximizing the
return of resources, managing the volume of production, where external factors (loans, protection-
ism) and internal factors are involved to identify the company’s reserves to increase profitability,
update the range of products. The maximum return on resources is achieved if the entrepreneur has
the following qualities:
• entrepreneurial spirit and willingness to take strictly dosed risks;
• detailed knowledge of the current needs of the market and the ability to guess its future
needs;
• exceptional performance and “iron” discipline;
• thorough knowledge of the case;
• ability to attract competent and capable employees;
• the ability to control the ratio between costs and profit, and if the company turns out to be
unprofitable, despite efforts to rectify the situation, then the entrepreneur should be ready to close
production;
• the desire to always be better than the competition.
Also in the work under consideration, much attention is paid to innovative entrepreneurship.
This is a model of entrepreneurial activity related to innovation. An entrepreneur usually creates in-
novations, namely goods and services – products, technologies, as well as methods of organizing
and managing a business. In this case, innovation is something that did not exist before and differs
from the well-known traditional methods of business management and the production of traditional
goods.
Thus, an entrepreneur who is engaged in innovative activities in business should take into
account that without modern technologies, increasing the range and improving the quality of prod-
ucts and services, the company will not be able to succeed in the markets and in competition. In ad -
dition, in order to maintain competitiveness, it is necessary that innovation activity become a per-
manent process, and not a one-time event. For the introduction and dissemination of innovations,
close contact with consumers is necessary. As shown in the work of Tidd & Bessant (2020), quickly
adapt to the market, take into account the new needs of buyers.
Entrepreneurs should change and reform production methods by introducing inventions and,
more generally, by using new technologies to produce new goods or used goods using new methods
in connection with the opening of a new source of raw materials or a new market for finished prod-
ucts to reorganize the former and create a new industry (DaSilva, & Trkman, 2014). In this paper,
the concept of innovative entrepreneurship is associated with the creation of “innovative business
models”. There is no consensus on the definition of a “business model”. The business model is the
sum of the answers that the company gives to the following three interrelated questions.
Thus, from the work under consideration, we can say that innovative entrepreneurship is the
process of creating and commercializing innovations. Innovation should be new not only for the
company implementing it, but also for the market as a whole, that is, something that no one else has
offered at the moment. The purpose of innovation activity is to occupy, possibly take away a certain
market share from competitors, as well as expand the existing market – to attract new customers or
encourage existing customers to increase consumption.
It should be noted that any innovative activity is entrepreneurial, as it is based on the search
for new ideas (from a new product to a new structure) and their evaluation; finding the necessary re-
sources; creating and managing an enterprise; obtaining monetary income and personal satisfaction
with the result achieved. However, not every entrepreneurship is recognized as innovative, but only
one that allows you to extract entrepreneurial income as a result of the creation, use or diffusion of
an innovative product.
So why innovation matters? From the work under consideration, we can say that over the
past decades, scientists and economists have taken the issue of innovation in entrepreneurship very
seriously, because innovation has already become an important factor in economic development to-
day. With the help of innovative processes, production increases, improving the quality and increas-
ing the number of new goods and services, and in a market economy they are the driving force of
competition, thanks to them it is possible to use modern technology and organization of production,
to ensure the success and efficiency of the enterprise (Jin, & Choi, 2019). Innovations have a posi-
tive impact on the development of enterprises and the economy of the country, therefore it is neces -
sary to promote the effective implementation of the innovation process, the systematic creation and
dissemination of scientific research and development, the implementation of which will determine
the competitiveness of domestic enterprises and the country as a whole.
Innovative entrepreneurial activity has a significant impact on the strength and sustainability
of the economy for two main reasons: innovative activity is the process of creating something new,
which is the foundation of entrepreneurial activity; as practice shows, in small companies, the de-
gree of “innovation” per employee is twice as high as in large companies. In addition, employees of
small innovative companies receive more patents than employees of large companies.
In the last two decades, the vector of economic activity has turned towards small innovative
companies, perhaps because of their unique ability to innovate and focus on solving specialized
tasks such as creating new jobs. Innovations created by entrepreneurial companies have a tremen-
dous impact on society.
Today, to gain competitive advantages, it is not enough to limit yourself to an innovative
product or process, new technologies, blurred boundaries of industries, changing markets, new com-
petitive players lead to rapid aging of products and processes, creates the need to act in all direc-
tions. That is why today we are talking about the penetration of innovations at all levels and spheres
of activity, strengthening innovative ties between various sectors of industry. The ability of a busi-
ness to both compete and interact with customers and partners is increasingly determined by how
innovative business models and organizational models are, not just products. Business innovations
are increasingly becoming complex, combining a product, a business model (as a way to create a
product), as well as an organizational model (as a way to implement a business model by employ -
ees). The level and intensity of innovative behavior can be different and depends on the potential
that the company has.
Considering the above, it can be noted that the need to introduce innovative changes is sup-
ported by the formation of sustainable competitive advantages for the long term and the creation of
potential for future development, therefore, these issues require further study.
 References

1. DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is
not. Long range planning, 47(6), 379-389.
2. Jin, S. H., & Choi, S. O. (2019). The effect of innovation capability on business perfor-
mance: A focus on IT and business service companies. Sustainability, 11(19), 5246.
3. Tidd, J., & Bessant, J. R. (2020). Managing innovation: integrating technological, mar-
ket and organizational change. John Wiley & Sons.