Innovative Development of Modern Economy: Basic Principles
This chapter analyzes the theoretical foundations underlying innovative development of national economy and gives the outline of the structure and the pattern of innovative development. In view of the cyclical nature of global economic processes requiring
- PDF / 343,973 Bytes
- 36 Pages / 439.37 x 666.142 pts Page_size
- 1 Downloads / 291 Views
Innovative Development of Modern Economy: Basic Principles
1.1
Innovation Processes: Subject Matter, Features, and Contribution to Business Activity
The notion of “innovation” first appeared in the nineteenth-century scientific studies to define cross-cultural assimilation of certain concepts. It commonly referred to introduction of European practices and organizational methods into traditional African and Asian societies. Patterns of technical innovations were only exposed to investigation in the twentieth century. General issues of economic implications and basic principles of innovation were studied by foreign and Russian scientists. In the book issued in 1911 and titled “The Theory of Economic Development,” Joseph Schumpeter renounced traditional economics, stating that the “norm” of healthy economics and the fundamental reality of economic theory and practice did not lie in balance and optimization but rather in dynamic imbalance caused by innovative activity; profit may be derived not only from alternation of price and avoidance of cost but also from radical replacement of output goods. Innovation is personalized in a business operator whose main function is to reform production through utilization of innovative ideas and resources in order to issue novelty goods (or produce conventional goods by engaging new methods of manufacture) and discover emerging resources for raw product, market outlets, redeployment, etc., i.e., rearrange ultimate factors of production or patterns of innovations. According to Schumpeter, innovation implies the following: – Producing goods unfamiliar to consumers or establishing new quality for certain goods – Implementing a method (means) of production atypical or novel to the given segment of industry, not necessarily based on recent scientific discovery and potentially involving a new means of commercial application of relevant goods
© Springer International Publishing Switzerland 2017 A. Chursin et al., Innovation as a Basis for Competitiveness, DOI 10.1007/978-3-319-40600-8_1
1
2
1 Innovative Development of Modern Economy: Basic Principles
– Developing a market outlet, i.e., a market that has not as yet been associated with the given segment of industry in the relevant country, irrespective of whether the market had existed earlier on – Procuring a resource for raw or intermediate product, equally irrespective of whether this resource had existed earlier on, or was just disregarded, or considered unavailable, or in the making – Effecting pertinent reorganization, such as securing monopolistic position or disrupting monopoly of external businesses Joseph Schumpeter examines innovative activity as an accelerating factor for economy. At that, great focus is placed on the bank—an institutional mechanism of creative potential that supports businesses looking for innovation or “creative destruction.” Innovation is ambivalent to economy: for one part, it opens up new vistas for economic upswing but then again precludes its further expansion within traditional domains. New deve
Data Loading...
