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Studies on the innovativeness – Businesses ...

Diagnosis of innovation among businesses, universities, B+R, institutions in the business environment and local administrative entities

Diagnosis of innovation among businesses, universities, B+R, institutions in the business environment and local administrative entities is the second annual report resulting from a study to diagnosis innovation among firms and other entities in the Podkarpackie Province and is part of a monitoring and evaluation system of the Regional Strategy for Innovation in the Podkarpackie Province.

The studies were for analysis of the level of innovation and potential among businesses, policies supporting innovation and the significance of European Union funding as well as an analysis of the instruments supporting innovative business. Companies are the fundamental element of the innovative system which is why the greatest emphasis was placed on an analysis of innovative businesses. Supplementary to the study of businesses is a study of the universities, R&D centers, institutions in the business environment and local public administration units which are also part of the Podkarpackie innovation system.

Key findings

  • Among almost 31% of the entities surveyed during the 12 months prior to the study innovation had been implemented. To the least degree innovative were the micro firms with between 1-9 employees. 23.1% of these stated that in the past 12 months they had innovated. There were significantly more innovators among small firms – 36.3% and mid-size – 49.3%. The figure was slightly less among large firms – 43%.
  • Various company dynamics impacted strongly the level of innovation. Companies which could boast of the highest growth most often innovated. The advantage of fast growth in increasing innovation was relevant last year for 69.2% businesses.
  • The highest number of respondents – 15.3% – implemented process innovations. Most often these were new or significantly enhanced production or distribution methods or supporting activities in production or services, and therefore process innovations. A slightly lower number of the surveyed companies implemented product innovations – 11.5%. Among these innovations, dominated those that were new only for the firm (58.1%). Just about 6% implemented organizational or marketing innovations - about 6%.
  • Prognosis for the coming year is at the same level as this year. In the next 12 months innovation is planned by 32.8% of companies. Importantly, innovation over the next 12 months is planned the firms which innovated in the past 12 months. This shows a significant interest in innovation and prognoses that the number of innovative firms will be maintained.
  • The main stimulus to implementation among Podkarpackie companies was the retaining or improving of market position and improved quality of product or service. An equally important stimulus was the ‘forcing’ of innovation by customer demand. A positive aspect is that the decided majority attained their goals thanks to the innovation. Most often the link between the stimulus and the result of the innovation were indicated by companies in good and improving economic situations, which to a great degree helped in the success of their implementations.
  • The most important internal barrier to implementation of new or technologically different solutions in a firm was a lack or insufficient resources for the implementation. These limits mean a significantly lower ability and potential for innovation. Another equally significant barrier is insufficient technical facilities. External factors that limit innovation (those in the business environment) were not so clearly depicted although the most important issues can be distinguished.Limited influence of the business sector on creating innovativeness due in large part to public policy, local public administration and business-related entities were listed here.
  • Micro-businesses finance innovation mainly with their equity. Service firms more often used this kind of financing than those in industry. Because access to finance was given as the main barrier to innovation, and the capital which these micro-firms have is relatively low, this is one of the reasons why these firms don’t innovate.
  • External financing sources for innovation are mainly credit and loans. Next are funds from the EU and leasing. The remaining external sources play an insignificant role in innovation.
  • Businesses show a wide range of cooperation in their innovation. This is mostly with customers and suppliers. This is similiar throughout Poland.
  • Barriers to cooperation in innovation in their opinion are the result of difficult financial conditions and legal regulations. An important cause is also the lack of any will to cooperation or the lack or low quality of offers to cooperate.
  • Managers say the most important tool supporting cooperation with other entities are programs suporting technological growth at the regional level. A low rate of cooperation between business and R&D is correlated with a lack of expectations for it, which results in low interest as a potential partner in innovation.
  • Companies to some degree use consulting and research instruments supporting innovation. Most often this is in the form of scientific expertise or the use of external prognosis. 
  • Five of the nine financial instruments supporting innovation are known and used by over half of those surveyed – most often these are business angels and vouchers for innovation. To a lesser degree are used credit, loans and commercial guarantees which are also the least well known by managers.
  • Those surveyed in the majority know and use supporting information which could be helpful in innovation. Among those are known such instruments, as over half state, that they use them. This was in the form of getting assistance or information on national or international programs. Few firms used support on norms, standards or new technologies.
  • Most of those surveyed know all of the forms of assistance in the form of training supporting innovation. Unfortunately despite this knowledge they do not always participate. This is mostly related to training on how to access EU funds. However the training most often selected was on intellectual property protection.
  • Organizational innovation support instruments are relatively well-known. All of the instruments mentioned were known by at least half of those surveyed. They are most often interested in help in the commercialization of technology.
  • Innovation means for these businesses primarily cost. Its positive results are far off in time, although they have significance for the economic condition of the firm. The largest firms are the ones that can innovate, in a market situation that is at least stable. 
  • Financing of innovation by equity and credit or loans (consequently taking on the full cost burden of innovation) seriously impacts the view of innovation as a ‘whim’.
  • It is interesting that the innovators in the past 12 months as a main factor for their decision gave primarily their own economic situation, only further did the environment and finally knowledge of innovation support programs play a role.
  • For those who said that they will innovate in the coming 12 months the order of these factors was changed – primarily it is knowledge of support for innovation, further stability of the environment and finally their own financial situation.
  • Innovation is therefore a specific self-driving mechanism. At the moment of initial implementation great expense is incurred and it is also linked to a good deal of risk (mainly the impact on the economic stability of the business) however innovation brings measurable results. This is why those companies which are experienced look for support for their implementation of innovation.Innovation can be treated as a mechanism which enhances market position and provides a competitive edge – a mechanism which is accessible to larger and more stable firms which in the perspective of time leads to the strengthening of this position and further creation of competitive advantage for these firms.

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