Docent Kobina
L.A.,
Candidate for a Master's Degree Churikova K.S.
South Federal University, Russia
Innovation activity as an
entrepreneurial function.
Innovativeness is
one of the entrepreneurial business’ basic characteristics, which requires
development and introduction of various innovations. Those innovations in their
turn cause significant changes in social practice.
Innovative way of thinking is very characteristic of
businessman’s cognitive style. Cognitive and motivational approaches consider
entrepreneurial business a complex process; businessman is described as an
intelligent person with analytical thinking and unique cognitive abilities.
Nowadays, there is no such thing as a commonly-accepted
definition of business and businessman (see in works written by R. Cantillon,
J. B. Say, F. Walker, J. Schumpeter, F. Hayek, R. Hisrich, etc.). However, we
can certainly say that entrepreneurship is always associated with innovations.
A number of ranking economists, such as J. Schumpeter and A. Marshall, paid
great attention to that aspect of economic activity. The way, in which A.
Marshall defined businessmen’ social function, is the following: it is not only
about them creating a new way of things, but also acceleration of certain
processes, which have been maturing in the society [1]. Schumpeter pointed out
that business and innovation are actually the selfsame concepts. Businessman is
destined to break down former production practice and forms of social
organization, for he or she is revolutionary energy in economy; businessman is
permanently carrying out “constructive destruction” into practice; it would not
be exaggeration at all to say that entrepreneur is a leading figure having an
impact on economic progress.
All of this leads to an idea that in the modern society
business and innovations are concepts strongly interconnected to each other.
Business is a specific form of economic activity (which in its turn is an
activity carried out in order to absorb interests), based on independent
initiative, responsibility and innovative business idea. So-called “innovation
moment”, such as production of new goods, changing activity profiles or setting
up new companies, is one of the main characteristics of business; new ways of
managing business, quality control and also development of industrial
engineering techniques or novel technologies are innovation moments as well.
Innovative function of entrepreneurship is dictated by
business nature itself: by the aspiration to score a success in the competitive
struggle and expand its own market segment. In the environment of tough
competitive business, putting into practice various achievements of scientific
and technological progress is almost the only way to reach that goal.
Innovative function
of entrepreneurship and pioneer work are strongly connected. Businessman creates new goods by previously
unknown means of combining and using traditional economic forces – land, labour
and capital. This forward-looking function is gradually becoming the leading
one, for businessman tries to foresee future requests. Rates of scientific and
technological progress are constantly accelerating, assortment of producing
goods is permanently expanding; those who produce goods try to stay in touch
with their consumers in order to be aware of their needs and be able to fill
them, (and, consequently, introduce and spread various innovations).
Consequently, «one
of the main aims of every businessman is to reform and revolutionize production
method by introducing inventions; in more general sense, such kind of
restructuring is carried out by using new technologies in order to produce
goods (both new and previous ones) with the help of new methods, which are the
following: discovering a new source of raw materials or new market of output production;
as a result, current industrial sector can be reorganized, or the brand new sector
can take place in economy» [2].
Innovative business function is all about constant search of
new approaches: challenging ideas, products, services, as well as the ways of
developing and introducing innovations. Therefore, the role of business in
society becomes dominating since innovations become the drive for growth and
progress. Thus, it is relevant to evaluate economy in terms of spreading
innovations in all its sectors.
Both trends, which are growth of technology and scientific
and technological revolution with its personal use machines, provide business
with an opportunity to spread innovations. Informatization of society as well
as the role of information services has been enhanced.
Individual and
social needs are constantly becoming more complicated, which helps business
remain one of the main providers of innovations in the whole society. This
process is based on technological progress: these times not only tools of trade
differ from the previous ones, but also produced goods. Needs of modern society
are so many-sided, that only business with its flexibility and responsiveness
is capable of satisfying them properly. Field of business activity expands due
to the requests of society that have to be satisfied.
Serving consumers
is one of the most important business characteristics. P. Drucker, qualified
specialist in business, pointed out the following: «There is the only one
reliable definition of business goal – “creating” of the consumer. Thoughts
concerning your own production are not “alpha and omega” for the future
business and its success. What your consumer thinks about goods you produce,
why he or she considers it valuable – this is what is actually critical for its
chances of success and what determinates its nature» [3].
Commitment to the
consumer makes the manufacturers pay more attention to innovations. If consumer
is not content with the product or service, businessman changes all his
strategies, behavior on market and conception of product or service, but not
only selling process.
Consequently,
entrepreneurship is not routine, but creative activity for those, who make
business; in such a manner, businessman is a person having a special view on
the world and philosophy.
Bibliography
1. Marshall A. Principles of Economics. M., Progress. 1983.
2. J.
Schumpeter. Theory of Economic Development. Capitalism, Socialism and
Democracy. EKSMO. 2007.
3. J. Pidlitch. Consumer
Behavior and Marketing Action. M., Progress. 1991.