Entrepreneurship and Innovation - Essay Example

Entrepreneurship and Innovation Introduction Innovation in commerce and technology is at the core of policy debate in major parts of the world experiencing fiscal, globalization, and demographic challenges. The article identifies imitation and innovation as well as other strategies in pursuing development. Innovation is one of the primary objectives of business companies and in most cases, it guarantees development in business. In doing this, the company differentiates supply innovation that entails influences in the entire supply process from process or product innovation, which covers modification of the process of product. The traditional definition classifies innovations into two differentiating them based on those from the laboratory and those on the market that enhance innovation. The management of the company also comprehends the other aspect of innovation that differentiates incremental innovation from path-breaking innovative mechanisms guided by the magnitude of originality besides the capacity to attain innovation standards. Simply, the company refers to this as the distinction between discontinuous and continuous innovation processes. Discussion The process and techniques of innovation Technology, science and innovation remain important factors that drive the economic success of the Republic of Korea. Companies in the Korea both domestic and Multinational Corporations continue to invest massively in development and research as well as put money in innovative techniques. Through this, the Republic of Korea succeeds in developing a precise innovation system that helps in maintain its economic growth. The management of the company in the article follows various strategies in enhancing innovation systems including applying a development strategy that appears outward, engaging large production oriented policy, and proper utilization of human resources among many more. These resources carry the strengths of the company as well as demonstrate particular weaknesses within the innovation system. Innovation is an important policy debate regarding ways of maintaining hitherto economic growth and development in many areas falling within the definition provided by demographic challenges, main fiscal challenges, and globalization of competition. This includes among others the emerging markets that Korea and Oman fall. The company focuses on innovation and gives little attention to imitation despite the fact that a close relationship exists between imitation and innovation procedures. A company considers imitation copying and comes with negative undertones (BASANT, 1996, 192). Innovation constitutes a virtuous process while imitation is a parasitic engagement that makes use of ideas from other people. The company strives to avoid this process because the management holds that such process should not apply in systems that enhance economic development. The company borrows the idea of continuous improvement by undertaking investments to modify progressively and continuously from Japan. The developed culture goes for changing for the best always. The company strives to augment what most companies fail to do. They apportion almost equal effort in construction, design, and experimenting prototypes as well as pilot structures in the same measure they partake in defining models, laws apart from development. The company operates and constructs systems going by previous experiences and proceeds to innovate on them by modifying various aspects. They explore ways of making the production systems better. The company makes changes on the old system by learning-by-doing, trial and error, learning by applying, as well as muddling through the process to achieve success. The company considers development processes either intuitive or rational but important integral components of the process of research. The management applies the same to improve lying beyond capacities to innovate using computation and analysis. An activity in research and development carry the potential for innovation and entails various actions (BROCKHOFF, 1992, 453). A difference exists between development activities and research activities. However, the two elements are essential parts of steps that result in path-breaking innovations. It is important to invest in research besides discovering new processes in addition to put a lot of money in the development of innovation in order to attain innovation necessary in breaking current patterns. To realize novelties, the company takes the initiative to develop products of the research process making the engagement one of the most expensive ventures. Process of development take care of all aspects of performance, experiments, modifications necessary in facilitating effective use of economic invention within the business organization (ALCHIAN, 1972, 783). Processes of development cover all areas of innovation whether object or products in the business. The company covers product imitation under the principle of imitation. This concept aims at constantly improving the efficiency as well as effectiveness of processes and products. This process puts together marginal imitation and simple copying procedures. The latter deliberately aims at copying a process or a product in order to reproduce a similar one while the former copies the product or the process but gradually modifies the same to improve the outcome. Improving the product leads to another that is relatively new. Copying is part of the learning process and produces two results. First, it leads to an outcome identical to the primary process or product. This is the outcome of counterfeiting. Counterfeiting aims at tricking a third person in the production process that the product is original whereas in the first case, the producer knows that genuinely what is under production is similar to the primary product or process. In the first part, the producer intends to conceal the true nature of the product in order to achieve important margins (AGRAWAL, 1986, 77). The other aspect applied in the company is innovations coming together with supply imitations. Inherent features of a product determine the broad aspects behind novelty besides the existing processes. Furthermore, the method of promotional likely to be new in the market plays a crucial role. The company also believes in having new products to provide to the market that come out as new to the clients as well. The management of the company believes that opportunities for novelties exist as opposed to availability of the same in the industry. Imitations also apply for marketing and commercial departments within the organization (CAMP, and Sexton, 1992, 112). This also comes either through marginal improvements or copying. The aim of the former is improving the resultant product in the process of gaining a competitive advantage over the rivals in the industry. The strategy followed for Innovation management Though common to most companies in Korea, the company applies technology transfer in different perspectives that set it apart compared to other companies in the industry as well as the country at large. The company appreciates that may research studies exist regarding the relationship between technology and self-R&D in examining the efficiency and theoretical background. However, this section outlines ways through which the company develops a concrete measure of the company in the article to underscore the actual performance of the same organization in terms of growth arte and sales ratio. The developments revolve around elements of resources and abilities applied in resource-based theory in addition to the open innovation structure (BARNEy, 1991, 111). Rapid changes in the world economy makes innovation in the technology sector continues to become more central in the process of examining the trajectory path of technology. This covers among other things the globalization and the short life of most products in the market. This company, being one in the competitive business world acquires innovative methodologies to attain long-term success. The firm uses technology strategy as one of its foremost factors of making business decisions. The company applies technology in two perspectives to increase its competitiveness in the market constituting technology transfer as well as self-R&D. Self-R&D appears at the top of the priority list because the company has adequate financial capacities and technological prowess. This is the best way because it helps in developing unique innovations including processes and patents. This option comes with a few disadvantages among them being time consuming and costly besides being a risky alternative. It is difficult to take back efforts when failure occurs. Companies with little financial muscles cannot recover in such situations making unsuitable for application among them. Scholars define technology import as the process of purchasing R &D outcomes of other business organizations for the purposes of advantages and profits. Companies have various reasons for importing technology among them the desire to have a particular technology, acquiring technology presents the easiest method of a business organization penetrating a new market compared to using self-R&D, it reduces time taken while applying the self- R&D approach, and allows companies to use patents without legal risks. On the other hand, acquiring technology from other companies comes with various demerits. They include lack of adequate knowledge on the future risks offered by the technology, huge amounts of money spent on consulting as well as training of the company staffs, and limited use owing to rules provided in contractual agreements. In spite of these shortcomings, acquiring technology is an option to enhancing and taking over technologies from other companies (Chesbrough, 2003, 39). The methodology develops company technological prowess. Technology and Self-R&D share few contrasting features in the relationship. The company makes use of the two systems effectively because they contain substitute engagements. When the company adopts a strategy along the financial year, the company imports technology and in the process minimizes the self-R&D. The method best suits situations when the company is operating under already established and approved budget. Such budgets demonstrate that there is no room for additional funding towards new projects. However, it is important to mention that continued reliance on imported technology makes a business organization less investment in investing in facilitating company technological ability. Many scholars around the globe have taken the initiative to evaluate the substitute relationship existing between the two using empirical means. The complementary relationship counts as the other form of connection between acquiring technology and self-R&D. Defining this type of association, scholars hold that transferring technology goes a long way in speeding the ability of self-R&D. The process of importing technology stimulates the enhancements of technological abilities of the company (Chesbrough, 2003, 52). This information is much clear to the management of the company addressed in the article. The company believes that acquiring technology from other companies in this context accelerates the process of research and development internally. Self research and development is a significant in reforming and improving of technology accumulation irrespective of whether the source of technology was importing or not. The company takes the initiative to improve its ability to distribute transfer of technology and enhancing self research and development by upgrading the value of the company. A lot of literature is available for review regarding the influence of transferring technology on self research and development expenditure. Most of these literatures concur that there is complementary relationship between self research and development and technology transfer and proceed to confirm the existence of a positive effect in the ensuing association. Technology Transfer To transfer technology as applied in the company refers to providing license to cooperation in technology. In addition to being the simplest way that technology trades, acquiring technology is an important source of information. The approach allows the company to evaluate its share in the market and the present position occupied by the business organization in terms of technological development. Scholars posit that there are various ways of acquiring technology. Vertical transfer of technology and horizontal transfer of technology are the models of technology transfer defined by the academicians. When the acquisition of technology entails innovation and knowledge within organizations, projects, nations and industries it becomes horizontal transfer of technology. On the other hand, transferring innovation and knowledge from primary levels through to advanced degree constitutes vertical transfer of technology (BALDWIN, 2003, 212). The aim of this is to necessitate development by means of commercialization. This is a way of technological innovation and knowledge, concepts, as well as outcomes of research from the first reception of organization to the organization that aims at applying the same. Aspects of this method are technological cooperation and licensing-in. The two elements of transfer of technology puts into perspective getting knowledge and innovation from outside sources in addition to the process of exchanging knowledge in technology for both processes and products. Technological cooperation is a strategic alliance that constitutes sharing of resources, active cooperative association, and co-ownership between companies that relate closely. Various types of capital, resources, and technology cause the relationship between the companies. The cooperation aims at utilizing the economies of scale through co-manufacturing, co-research and development, as well as co-purchasing. Through sharing various things related companies improve their market power, rate of productivity, and the influence of learning. No wonder the number of companies applying strategic alliances continues to increase in the modern business environment. Establishing an innovative environment The existing structure can thrive using the open innovation model. This model refers to the use of resources outside the business organization and performers to attain innovation. This is common among most companies that continue to register success as they maintain a competitive edge over other companies in the industry. Through this, most academicians posit that investment in internal efforts have the ability to influence innovative performance largely. Companies that practice open innovation get more innovations from other sources other than internal resources. These companies carry out outsourcing on matters that cover their research and development programs core to the process of technological exercise of the business. The business organization adopts the processes of opening and searching capacities into the open innovation model. The article quotes Proctor & Gamble as one of international companies that applies the open innovation model in Europe apart from those applied in Korea. A case in point entails using a connect and develop framework to make the research and development more effective. This strategy applies external concepts and features. Scholars hold that the effectiveness of this model is beyond what internal research and development can provide. It is the responsibility of linkages and networks to engage a popular topic in the research process. The innovative system is the most popular presently among innovators because they depend on interactions with suppliers, users, as well as putting into perspective various institutions. This means that in the modern business environment, it is difficult to innovate individually without using elements from other innovators (ARROW, 1969, 33). Most researchers work in conjunction with many organizations and other persons either in unions or as teams. The guiding factor in this case is the trust existing between agencies and agents interested in working together. The company in the article needs to internalize that gains from self- research and development continue to decline therefore, relying on external borrowing of knowledge and ideas in the process increasing their quality while at the same time cutting expenditure on internal research and development will turn around the fortunes of the business organization under study in the article. The firm will succeed by borrowing knowledge from other parts of the world and professionals. In the process, the company will take the initiative to commercialize concepts from the outside environment by using routes external to the company and penetrate the market. The company can improve its performance by enhancing the degree with which it establishes relationships with others in the industry as well as the external environment. Organizations posit various reasons for importing technology among them the desire to have a particular technology, acquiring technology presents the easiest method of a business organization penetrating a new market compared to using self-R&D, it reduces time taken while applying the self- R&D approach, and allows companies to use patents without legal risks. On the other hand, acquiring technology from other companies comes with various demerits. They include lack of adequate knowledge on the future risks offered by the technology, huge amounts of money spent on consulting as well as training of the company staffs, and limited use owing to rules provided in contractual agreements. Analysis of the boundary-spanning findings shows that technological and organization limits interfere with the whole process of technological development. The influence of research becomes more relevant when it covers technological and institutional boundaries. Strategic implications Resources such as technology, human capital, and fixed-assets have a positive influence on the performance of businesses. Companies operating in the business environment of Oman can learn much from this. Resources with the greatest influence are fixed-assets and technology. However, it is important for companies in Oman to note that the process factor influences the sales ratio of the company in a negative way. With the exception of the capability of openness, finding and incorporating variables goes a long way in augmenting the performance of businesses. Openness capacity negatively affects organizational performance as much as the influence may remain insignificant. When business organizations apply multiple variables in their estimates, it is likely that they will find the controlling influence of capabilities having positivity on the value of the business. . Processes of development cover all areas of innovation whether object or products in the business. The company covers product imitation under the principle of imitation. This concept aims at constantly improving the efficiency as well as effectiveness of processes and products. This process puts together marginal imitation and simple copying procedures. The latter deliberately aims at copying a process or a product in order to reproduce a similar one while the former copies the product or the process but gradually modifies the same to improve the outcome. Improving the product leads to another that is relatively new. Copying is part of the learning process and produces two results. There is clear difference between businesses operating on large scale from the Small and Medium Enterprises. Process factors and fixed assets significantly influence the increased sales ratio in appositive way within large scale business operations. On the other hand, fixed assets and technology play the same role in Small and medium scale business operations. Similarly, clear distinctions exist regarding the controlling effect. Comparatively, searching technology appears relevant to business organizations that operate on large scale than small and medium companies. However, small and medium enterprises tend to benefit more from openness capability and absorbing compared to large scale business organizations. Conclusion Companies operating in Oman have a lot to learn from those in the Korea business environment. This includes learning about the influence of technology transfer locally and acquiring the same form the international market. These resources carry the strengths of the company as well as demonstrate particular weaknesses within the innovation system. Innovation is an important policy debate regarding ways of maintaining hitherto economic growth and development in many areas falling within the definition provided by demographic challenges, main fiscal challenges, and globalization of competition. Fixed assets influence the value of the firm positively if the company acquires knowledge and concepts from the local industry. On the other hand, human resources positively influence the performance of technology during transfers that entail business in the international market. The company focuses on innovation and gives little attention to imitation despite the fact that a close relationship exists between imitation and innovation procedures. A company considers imitation copying and comes with negative undertones. Innovation constitutes a virtuous process while imitation is a parasitic engagement that makes use of ideas from other people. The company strives to avoid this process because the management holds that such process should not apply in systems that enhance economic development. Bibliography AGRAWAL, A. (1986), Corporate Capital Expenditures and Managerial Stock Holding: Agency or Signaling? Mimeo. ALCHIAN, A. (1972), "Production, Information Costs, and Economic Organization", American Economic Review, 62, 777-795 ARROW, K. (1969), "Classificatory notes on the production and transmission of technological knowledge", American Economic Review, 59, 29-35 BALDWIN, J.R., (2003), Innovation and Knowledge Creation in an Open Economy, Cambridge: Cambridge University Press. BARNEY, J. B. (1991), "Firm resources and sustained competitive advantage", Journal of Management, 17, 1, 99-120. BASANT, R. (1996), "The effects of R&D, foreign technology purchase, and domestic and international spillovers on productivity in Indian firms", Review of Economics & Statistics, 78(2), 187-199. BROCKHOFF, K. (1992), "Instruments for patent data", Technovation, 12(1), 451-458. CAMP, S. M. and Sexton, D. L. (1992) "Technology Transfer and Value creation: Extending the theory beyond information exchange", Technology Transfer, spring-summer.  CHESBROUGH, Henry (2003), "The Era of Open Innovation", Sloan Management Review Summer, 35-41. Chesbrough, Henry (2003), Open Innovation, Cambridge, MA: Harvard University Press. Read More