Ýêîíîìè÷åñêèå íàóêè /6. Ìàðêåòèíã è ìåíåäæìåíò

Kurmanov B.K., Kurmanov G.B., Raimbaeva N.T., Sambetova Z.N.

Kazakh-British technical university,

 Almaty technological university, Kazakhstan

Some Aspects of Organization of the Innovation Process in    Industrial Enterprises

 

This report discusses factors, which are preventing industry's demands for the results of research and development of Kazakhstani scientific organizations, as well as questions of increasing the effectiveness of measures of the state stimulation of innovative activity.

Innovative activities of industrial enterprises - are actions directed on permanent establishment and spread of innovations through the implementation of scientific, technological, organizational, financial and commercial activities that enhance enterprise competitiveness and ensure its long-term and dynamic development. Susceptibility (sensitivity) of businesses to innovations - the ability for rapid and effective mastering of novelties, the perception of innovations in order  to meet the demand of consumers, it is affected by economic, organizational, psychological, social, technical, and many other factors.

Innovative susceptibility is determined with respect to innovations themselves and information about them, with respect to knowledge and best practices. It should be noted that in Kazakhstan, the main barriers to innovations growth depend on a number of other factors such as economic instability among the enterprises. The innovative activity of enterprises is significantly influenced by such characteristic as the size (small size limits the ability of large-scale innovations), belonging to a particular industry, type of competition (foreign competitors or domestic companies), etc. Very often, the type of competitor, not the level of competition itself, is more important for industrial enterprises. If competition is carried out with those who build their strategies on innovations (in the case with competitors from abroad, such assumption is quite logical), then the producers are forced to engage in active innovations, which include not only investment but also R&D (research and development). The probability of system realization of innovations as element of the development strategy is significantly higher in companies experiencing strong competition with imports.

With increased openness of the Kazakhstani economics, the integration processes of domestic companies to the world economy are becoming an important factor  of innovation activities in the industry. It should be noted that it is not so much in a smaller proportion of innovation-active companies among those for whom integration into the global economy is not relevant, but in significantly lower "quality" of the innovation activities of these enterprises, which is mainly situational, less dynamic and less closely connected with  research and development.

Analyzing the existing views and opinions of key players in R & D results, we can distinguish two polar points of view. Representatives of the proposal of R & D results, which, as a rule, are the domestic scientific organizations, believe that the domestic business is immune to the new technology, not interested in innovation and even more so in support of national science, although the quality of scientific research is largely consistent with  international standards. Representatives of industry and business, in contrast, argue that there is a lack of quality of scientific research and projects in Kazakhstan, and most scientific organizations are not able to provide high quality product, competitive to foreign analogues.

It is worth noting that the differences in terms  "quality" between science and industry may generate some confusion: "quality" in scientific understanding -  is a correspondence to norms and standards, the world's scientific level, foreign scientific developments. Whereas "quality" from the point of view of business and industry, could mean the possibility of using the development in production, compliance with its needs and requirements of a particular company, provision of full range of presales and after-sales service etc.

Data from different statistical surveys and polls demonstrates the following structure of obstacles: the main reasons, hindering innovation activity in Kazakhstani economics, are economic factors, among which the leading role is  played by a shortage of own funds. The second " echelon" of factors which, according to  industrial companies, impede innovations, consists of both factors of production activity of enterprises (for example, lack of innovative capacity, or problems with qualified personnel) and other factors such as lack of demand for innovation products from the side of buyers or  imperfect legislation. Infrastructural problems in this layout took place in importance among the factors of the third "echelon", such as lack of information about the sales markets, weak market of technologies, etc.

Overseas research uses the actual empirical work and numerous statistical and observational studies to analyze the reasons hindering the innovation activity of industrial enterprises [1]. For most Western countries the first place among the factors impeding innovation is taken up by a high cost of innovations themselves, second place – by a lack of funding for innovations, which is confirmed by studies based on data of the European innovation survey - CIS (Community Innovation Statistics) and data from other surveys.

Low demand of enterprises on the results of domestic scientific researches is increasingly determined not by their poor quality, but underdeveloped innovation and human resources infrastructure, as well as the fact that the strategy for commercialization of the results of R&D by national research organizations is characterized by a weak focus on the needs of industrial enterprises.

Various statements of representatives of the large industrial enterprises of key sectors of Kazakhstani economics show that the problem of low innovative activity and the lack of demand for domestic R & D results  lies not only and not just at the financial level. According to some experts, innovation infrastructure in Kazakhstan is underdeveloped and fragmented, so that information about the market as a result did not reach their destination or is heavily distorted. Given that Kazakhstan is characterized by preferential orientation of enterprises on the imitational innovations (not involving expenditure on R & D), a low level of relevance of the lack of information about the new developments is quite feasible.

In practice, the enterprises of Kazakhstan meet another difficulty in the realization of innovations: the borders between the initiative and design stages of innovation process are often blurred. It happens that the organization does not produce clear specificities of innovation. Thus, the implementation is attached by something that does not necessarily ensure the elimination of difficulties, and sometimes has no direct relation to the problem. Another common fact that can be met even more often is a neglect of the detailed plan of implementation of innovations, when work is began without carefully thinking through successive steps, and having a vague idea about it. It is clarified only on the way what is exactly being implemented, and what results should be expected.

There is another problem associated with the organization of the innovation process. It is known that the susceptibility of the organization to innovations is determined by two groups of factors: the potential for innovations (possession of information about new products as well as ways and means to apply them; real access to needed innovations, i.e. the possibility of the timely receipt of finished developments, placing orders for them or creating its own; the availability of resources, which can be directed towards realization of innovations without damage to current business operations) and communicational structure (the size of enterprises, i.e. their size and resources belonging to them; complexity or completeness, i.e. availability of specialists and direction of their vocational training; formalization of activities, i.e.  observance of strict prescriptions, rules and procedures, centralization of authority, i.e. the concentration of power in the hands of the few leaders and “verticalization" of information flows). Factors of the first group are the general background of susceptibility to innovations and are its prerequisites. In fact, if the organization does not know where to get the novelties it - by and large – has nothing to count on. If you know which ones are needed and where they are, but they have no real access, the practical chances of innovations are still low. Finally, if organization can get close to them, but there are not enough resources to implement them, we can hardly hope for an effective update of our activities. All these factors act in the same direction: the higher the value, the more receptive the organization to innovations. On the contrary, the lower the value, the harder it is  to achieve innovation goals.

Concerning the second group of factors, they act in different directions and sometimes make opposite contributions to the susceptibility of the organization to innovations. Thus, it is easier for large organizations to initiate innovations and develop a plan of its realization, but much harder to master the innovation - because their structures are cumbersome and communication problems are frequently occurring. For complex organizations (with a variety of competence) it is quite simple to put the problem and find a suitable innovation to solve it. But they face a barrier in the form of discrepancy and "inconsistencies" in the views of experts, when they start designing of innovations and its implementation. Centralization, which provides tight control over the execution, is very effective in the development of innovations, but it inevitably crashes during he design of innovation, and especially in its initiation. And in an organization whose activity is formalized, and where, therefore, the discipline is maintained, good work is done not only on the stage of development, but on the stage of design too. However, it is,  as a centralized organization, passes, as soon as there is a need to find a precise answer to the problem and identify the parameters of innovation, designed to become its solution.

Finally, the implementation of innovations is hindered by the weak competition policy of the state, because only the competitive environment stimulates innovations and improvement of the quality of goods and services.
It should be noted that the most common and clearly erroneous behavior model of enterprise is the pursuit to economic gain (profit) with fast results, which leaves the "shadow"  on and pushes the issues of innovation development "for later", to the best of times, which with such an attitude can no longer occur.

Nevertheless, let’s note that in recent years we observe some positive trends in the development of scientific institutions: their financial position has been improved, the demand for their services has increased, and the salaries of academic staff members have significantly increased. There is a prevailing trend towards increasing of the demand for research and development of Kazakhstani research organizations. We can also note the expansion of the scientific organizations that manufacture products on a turnkey basis. In this case, significant problems in the sequel expansion of the activities of scientific organizations are obsolete scientific equipment and a shortage of qualified personnel.

At present, in the interaction of scientific organizations with the business «non-contractual" forms are prevailing: in most cases there is a transfer of R & D results on a contract basis (excluding sales of patents, showing licenses). However, there are signs of the orientation of research institutions to significant expansion of the application of "contract" forms during the interaction with business in the scientific-technical sphere, which is coupled with the formation of the “postponed” demand for protection of the rights on the results of research and development (R&D).

In order to develop the scientific-industrial cooperation it  is important to ensure a balance of stimulation of demand and supply in  scientific field by expanding the use of mechanisms to stimulate demand of  business on research and development, including the one on the basis of  state co-financing of  companies’ orders  to conduct R&D , and to form additional tools to encourage the networking among participants of innovation processes,  to support the development of innovation networks and clusters, promoting the competitive long-term partnerships and consortiums by the priority areas of technological development.

To date, there are developed a series of regulations aimed at activization of innovation activities, including “The strategy of industrial-innovation development of Kazakhstan for 2003-2015 ".

Innovations are implemented within a complex dynamic system, the efficiency of which depends on the use of internal mechanisms, and on interaction with the environment. At present, there are three directions to innovations study: the first and least effective - the state sector of economics, where intermediary between the society with its needs and science   is the state; the second area - the relationship between science and big business, and the third - the creation of small innovation firms, aimed at finding new ideas, their evaluation and implementation.

In order to implement innovation solutions, country needs to attract considerable investment. To date, there is dominance by R & D funding from the state budget. Recently, however, there is a tendency to increase the volume of  funding of innovations in industrial enterprises with its own funds and customer’s money.

Each of the existing instruments of state support of innovation activities of industrial enterprises has its advantages and disadvantages. Thus, the mechanisms of tax stimulation (except for investment tax credit) are focused on the use by a wide range of businesses and  do not require complex bureaucratic approvals, providing feasibility studies, business projects, etc.,  they are more "market", that is,  suggest a lower level of state intervention to the economics. At the same time, support of  innovation activities in the form of co-financing of specific projects appears to be address (and not "smeared" by a wide range of enterprises), and its volume is determined arbitrary by the state and, generally speaking, may not even be limited by the criteria of economic suitability. In addition, during the selection of projects for support the state can be guided by considerations of their social significance, focus on increasing  the national security level, improvement of ecological environment, etc., which are extremely difficult to take into consideration in the case of "unascertained" fiscal instruments of innovations stimulation . In general, the most effective one is a rational combination within the state innovation policy instruments of both types. In this case, the tax measures contribute to the overall improvement "of innovation climate” in the country and to the increase of enterprises and organizations’ activities in the corresponding area, and the mechanisms of state co-financing ensure  the “point"support of the most important and priority projects

The reaction of companies to a variety of arrangements that stimulate innovation strongly depends on the duration of innovation projects, realization of which is needed to improve their competitiveness [2]. During long-term payback period of innovation the direct state support in the form of co-financing of innovation projects under the risk-sharing or crediting of import of foreign technologies are more critical and effective for companies. And tax incentives and mechanisms of budgetary co-financing contribute to the development of innovation activities, but in the second case the permissible duration of companies’ innovation projects increases, accordingly, the choice of suitable areas of innovation and long-term competitiveness of businesses expands. Thus, budget co-financing is more conducive to "launching” of new innovative projects by companies, while tax incentives encourage the expansion of existing projects.

From the standpoint of stimulation of demand of industrial companies on R & D results (especially those companies that had used the simulation model of innovations) budget co-financing orders for R & D seem to be very efficient, it reduces the risk to "start" the interaction with academic institutions for these companies. However, in relation to the instrument viewed there is a risk of "substitution" of private expenditures on public ones without substantial increases in overall R & D expenditures. Let’s note that for companies that already have R & D expenditures, the budget co-financing of such expenditures is less important than tax stimulation in the form of incremental benefits on R & D expenditures.

                                                                                               

References

 

1.     Innovation in Europe: Results for the EU, Iceland and Norway, 2004

2.      Zasimova L.S. and others: The problems of transition of industry on the way of   innovation development: a microeconomic analysis of the specificities of firms’ behavior, dynamics and structure of demand for technological innovation. -M.: Moscow public science fund, 2008