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MANAGEMENT INNOVATION OF PRODUCTS AND SERVICES IN

STRATEGIC MANAGEMENT
Biljana Ilić
Megatrend University Belgrade, Faculty of management Zajecar, Serbia
biljana.ilic@fmz.edu.rs

Miloš Nikolić
Megatrend University Belgrade, Faculty of management Zajecar, Serbia
nikolic2206@gmail.com

ABSTRACT
Modern business environment is very dynamic, unpredictable, turbulent, characterized by: a
shorter life cycle of products or services, with expressive competition on a global scale,
transition of society from an industrial to a society in which knowledge is treated like a
critical resource in the economy, volatility of the market and economic conditions. Constantly
impose new challenges that the management of a modern organization faces to achieve
effective and efficient operations, which makes the manager's job more complex and dynamic,
in constant struggle to rich the business position and to improve it. Only those businesses
companies that are willing to promote innovation, change and continuously working on
improving the quality of its products and services know what success is. Otherwise, their
existence can seriously be in questione. Those companies that are not willing to innovate, will
hardly be able to keep up with the global competition. Nowdays, in new circumstances the
consumers in time, where their information are more accessible than ever, have a wide choice
and the possibility to decide what is most acceptable to them. Crude market conditions do not
forgive errors. Essential is to learning and to innovate in the modern business environment
and it can not be only a privilege of management, but it must become obligation and needs of
all employees. Organizations expected of employees that innovate becomes a state of their
consciousness and aware of its usefulness in the way that every day do something for their
environment and for their economic subject. By investing in employee skills, the company will
indirectly invest in improving their products and services.

Keywords: Business environment, Enterprise, Innovation, Lifecycle, Management, Products


and services.

1 INTRODUCTION
In order for human society to develop, it is necessary to constantly improve, modify both
material and intangible environment, such as changing people's awareness of it, overcoming
factors that influence growth, progression.

Innovation management is a wide process that encompasses the full spectrum of activities
and measures that need to be applied to allow the idea to be translated into business value.
This process can be applied to all kinds of ideas, whether it's products, processes, or services.
Managing innovations is a wide process that involves the whole spectrum of activities and
measures that need to be applied to enable the idea to be translated into business value. This
process can be applied to all kinds of ideas, whether it's a product, a process, or a service.

The main goal of Innovation Management is to provide a set of tools and tools that can
provide inventors and creators with ideas to respond to challenges throughout the whole
process and transform their ideas into innovations in the marketplace. The subject of this
approach on the topic of "Innovation management" refers to the research and presentation of
concrete facts about innovations in terms of concept, trends and phases of innovating
innovation. The subject of work is innovation as a key factor in acquiring and maintaining a
competitive advantage on the market. One competitive advantage is to learn and to change.
By changing their knowledge, employees change their attitude toward work and indirectly
improve their products and services

In the literature, there are different approaches for determining this phenomenon, ranging
from the mere observation of innovation as a technological phenomenon and at the end of
innovation as a process, a set of activities leading from the idea to its commercialization.
What can be concluded is that innovation is a key factor in achieving and maintaining the
competitive advantage of a modern organization as a condition of its successful business.
Considering that innovation and innovation in today's time are linked to the success of the
company, therefore, great attention is being paid to this area within each company. The main
goal of dealing with the topic of Innovation Management is to show how all the measures,
tools and skills are used by a business entity , so that it can provide relevant solutions to all
the challenges throughout the whole innovative process, in order to turn their ideas into
innovations in the market, which will be able to survive and / or make progress.

Managing innovation is the main direction and necessity of modern business. A key role
in this is the strategic management of a modern organization, because the challenges of the
environment need to be adequately addressed in order to achieve the set goals in the market.
The structure of the work is visible from the content, so it can be said that the content
structure of the work consists of an introductory part, in which we touch the subject, the goal
and the structure of the access work, then we are conceptually familiar with the topic. In the
second part where the importance of innovation and innovation in today's environment where
the definition and concepts of innovation and innovation, the classification of innovation, the
role of innovation strategy, innovation management, the definition of the scope of innovation,
networking with innovations, then what are the stages in innovation management. In the third
part of the ad hoc working paper, the latest information on trends in the field of innovations is
described, it describes innovations in the Republic of Serbia, as well as innovations in the
environment and countries in the region of Europe. The fifth part of the ad hoc work contains
conclusions about the topic addressed, and the last sixth part contains the professional
literature and sources used for processing the topic of access work.

2 THE IMPORTANCE OF INNOVATION AND INNOVATION INTO THE DATA


ENVIRONMENT

The business environment is very variable and as such has a big impact on the company itself
and thus their survival. The constant struggle of the company's owners with its management
personnel to find adequate solutions for better adaptation to the turbulent environment.
One of the most important rules for adapting the enterprise to a turbulent business
environment is investing in innovation, which gives an advantage to the market in relation to
other competitors. Very important innovations for the business of the company, and to see this
in the next part, we will address: the definition of innovation and concepts of innovation,
classification and division of innovations, role of innovation strategy, innovation
management, definition of scope of innovation - strategic coverage, innovation pace
management, networking with innovations, innovation management phases.
Definition of innovation and concept of innovation

In view of the fact that the importance of innovation is increasing, that is, the fight of
those who are studying their studies and the greater the connection, today in professional
literature can meet a large number of different definitions of the notion of innovation.

We can say that there is no precise definition of innovation and innovation. Innovation can
be defined as a set of activities undertaken by the enterprise, which are the source of new
products or production processes. Enterprise development is mainly related to the existence of
innovations. Innovation is the commercialization of a new idea, or its translation into a
specific product, process or service.

Innovation is something that relates to the notion of an entrepreneur who seeks to foresee
changes, reacts to them and accepts a high level of risk, and uses it as an opportunity in his
business. But in spite of that, large companies are precisely those who have the ability and the
necessary financial means to carry out innovations.

It is a process that, as with any other process, is necessary to manage the right way. There
is an expression of the role of managers at all levels and their ability to balance and optimize
all of the innovative activities in the company. "Everything is flowing, everything is changing,
only changes are constant", is a metaphor that completely reflects the modern business
conditions. In previous times, business strategies have been defined and implemented most
often in a reactive way in relation to processes in the environment, but also within the
organizations themselves. Today, most organizations act proactively, that is, they notice
possible events before their formation and react to them. Adaptation to numerous and varied
changes, growth of competitiveness and continuous improvement of performance are the
basic condition for the survival and success of modern companies.

Initiation of the innovation theory first of all, we are associating for the name of J.
Schumpeter, who in the first half of the last century marked innovation as the basic factor for
achieving technological and economic development. He most often thought of replacing old
technology with new technology, which he described as a creative destruction. According to
the aforementioned author, innovation signifies the pimple of new technological knowledge,
as well as market knowledge, with the goal of putting porters at the disposal of the products
and services they want.

Also, most authors believe that innovation is primarily related to technology and that they
are mostly realized in this field, ie, today we can talk about technological innovations. New
technology, as a result of innovation, results in the emergence of new business branches and
firms. Technological changes play a very important role in the competitive dynamics.

The changes they bring may have several outcomes:1

 Bring new products and processes with you;


 Change the value of the chain and the value of the company's constellation;
 Change the nature of rivalry between firms.

Stošić, Biljana. Menadžment inovacija - ekspertni sistemi, modeli i metodi. Beograd, FON, 2007
1
According to the OECD, innovation is the adoption of something new or significantly
improved product, service or processed new marketing methods or new organizational
methods in business, job creation ... Innovation must be a constant corporate activity because
those who do not innovate are unsuccessful and disappear forever, by Preser and the Branch .

We look at innovation as applying new knowledge to have new products or services that
consumers will want for themselves. Throughout this process, innovation is just the initial
step where a good idea is to be applied so that investment becomes an innovation. Innovation
is never viewed as a separate event, but it is a whole series of activities that together make the
process, and for the execution of the procedure only good management is needed.

We can conclude that there are different definitions, but all of them lead to the same that
they are activities that are different from those that were previously used.

Four things are important for successful innovation:2

1. New - something that previously did not exist or was created by a combination of
available resources in a new original way,
2. Better - introducing something new just because it's new and existing, it does not
make any sense and most often carries more damage than the benefits,
3. Needed - there must be a need to solve a problem or develop a new product or service,
4. Economically justified - in order to fulfill its purpose, the company must achieve
direct or indirect benefits from innovation.

Classification and division of innovations

There are different classifications of innovations depending on the criteria applied. Below
you will see three classifications of innovation.3

According to the character or nature of innovation they are divided into:4

Social (social) - include the introduction of newspapers within the framework of the socio-
political system and include: market (marketing) innovations; innovation in the field of
governance (which improves productivity, product quality and usability, and the quality of
work); political innovations (measures taken by the state, legislative measures) and
institutional innovations (new state institutions establishing with the goal of providing or
performing social services or functions).
Social-technological innovations represent a set of innovations generated and gathered
around a single centric product (eg, a personal computer, a series of social innovations
challenging it).
Technological innovations - basically have new technological advancements. These
include product and service innovation and process innovation.

According to the relative importance in the innovation process of innovation are divided
into:

N. Jagaš, Sustav upravljanja inovacijama, 2009, str.9.


2

Krstić, Gavrić, Skorup, Strategijski menadžment, 2018, str.134


3

Krstić M., Skorup, A. Teorija inovacija, 2011.


4
Incremental - means adjustments, improvements and improvements to existing products
and services, they are predominantly represented in the modification of products and
processes, and relate to the rapid embedding of customers' demands in the concept of products
and processes.
Radical innovations - imply the introduction of brand new products and services and / or
processes in the lead entity. In small business entities, they arise as a result of the owners 'or
managers' debts, and in the case of large ones, they result from investing in the complete
innovation space of the product, and they are larger in scope, while in small ones it is more
effective, as there is a significant reduction in costs, which enables competitiveness in the
market.

Prema području primene dele se na:

Inovacije u području strategije – uvđenje novina u strategiju privrednog subjekta;


Inovacije u području tehonolgije – uvođenje novena u proizvodni process;
Inovacije u podrčju proizvoda –uvođenje novog proizvoda ili usluge ili unapređenje
postojećeg.
Inovacije u području structure – uvođenje novena u rganizaciji privrednog subjekta i mogu
se odnositi na hijerarhiju autoriteta, ciljeve, strukturne karakteristike i administartine
procedure.
Inovacije u području organizacione culture (zaposlenih) – odnosi se na promene stavova,
ubeđenja, percepcija i ponašanja zaposlenih. Cilj ove inovacije je efektivniji zajednički rad.

Promene u jednom delu mogu proizvesti promene u u drugom delu privrednog subjekta.
Novi proizvod može izazvati promene u tehnologiji, koja dalje može zahtevati nove
kvalifikovane ljude, strategiju ili novu organizacionu strukturu.

The role of innovation strategy

Knowing the organizational strategy is very important for innovation, because it achieves
various advantages such as increased interest of the client, then easier overcoming
competition, starting new forms of business, etc. In order to develop innovative potential, the
company needs to apply the appropriate strategy. The company must choose between two
strategies:5

1. Leadership in Innovation - where the goal of the company is to be the first in the
market and based on technological leadership, requires strong affection for creativity
and risk taking ,

2. An innovation advocate - companies aim to put off the market, based on the
empowerment of technology leaders, demand strong commitment to competition
analysis, knowledge of reverse engineering, cost reduction.

5
Bevanda, V., Živaljević, A., Bulut, I., (2015) „ Uloga i značaj funkcije rukovođenja u poslovanju preduzeća“, LIMEN
konferencija 2015: Liderstvo i menadžment: država, preduzeće, preduzetnik, Fakultet za poslovne studije, Beograd
1. Managing innovation

Innovation is a process that takes place in stages. It begins with an idea that is new, and
when an idea develops, it becomes a proposal. Innovation arises when the proposal becomes a
reality and only then can one speak of innovation right. Since the idea has been formed and its
realization has been completed, it is a complex process, so it is logical to expect that without a
conscious management of this process, large deviations can occur which can lead to the
failure of the idea. It is therefore important to know the pace and stages of innovation
development.

Regarding the pace of innovation, it should be emphasized that the characteristic of


modern times is an increase in the number of innovations and a shortening of the time of their
application in practice. "It is so, for example, until 1914 for the transfer of knowledge from
discovery to production took 50 years, between 1920 and 1940 for this transfer took 16 years,
after 1945 the time was shortened to 9 years, and since 1972 it is only 7 years with the
tendency of further reduction.6

2. Defining the scope of innovation - a strategic envelope

In order to prevent economic operators from spreading innovative efforts towards


uncertain innovative projects or projects that go beyond the domain and interests of the
parent, it is necessary to define a strategic envelope, scope of innovation.

Focusing on technology, or acquiring skills and expertise in a particular technical field, is


one of the ways to determine which projects to work for. Businesses must precisely determine
what kind of innovation they are looking for and what to expect. It is not necessary to create
systems approach when assessing potential results and to learn from their innovative
initiatives.

3. Managing the pace of innovation

In addition to the need to define the scope of innovation, it is also necessary to define the
pace of innovation.

In incremental innovative projects, business entities are quite rigorously managing the
deadlines and goals, and the time required for this type of projects ranges from 6 months to 2
years. While more radical innovations are needed for more than 10 years, they begin with a
long-term research period with an unknown outcome, and that rigorous deadlines and goals
are unrealistic, often.

Managing the pace and rhythm in the innovation process can be an important condition, a
factor for achieving survival and long-term success.

Buble M., Klepić Z.: Menadžment malih poduzeća – Osnove poduzetništva, 2007, str.92.
6
4. Networking with innovations

We already mentioned that information, skills and knowledge are important for
innovation. In practice, it is simply impossible for a business entity to have all the information
within the organization and all the knowledge necessary to carry out an innovative process
from the idea to its commercialization. It is therefore important to turn to networking for
innovation.

Networking for Innovation is establishing cooperation with partners that can help us in the
realization of innovations, that is, all those who can provide us with all that knowledge and
skills that we do not have, which are necessary for the success of an innovative process.

Partners in an innovative project can be:


other employees within the unit organization,
employed in the same economic entity, but in different organizational units,
other economic entities.
Partners can also be from other environments such as university research centers and
active regional, national and international innovation stakeholders.

In the process of selecting a partner, business entities must develop specific mechanisms;
in deciding on the choice of partners, the key criteria are:

the rhythm and scope of innovative initiatives, the type of expertise needed by the
business entity and from which partner it can obtain, the contribution of partners in
innovation, how the revenue will be shared and who will claim the intellectual property right.

5. Phase of Innovation Management

A strategic approach is very important to every company that seeks to innovate in its
business. A strategic approach involves certain phases, that is:

INNOVATION SYSTEM-PROCESS

SEARCHING CHOICE IMPLEMENTATION SUSTABINAILITY

INNOVATION STRATEGY

Picture no. 1 A strategic approach to creating an innovative company


The first phase - search - its main feature is to look for an opportunity to innovate
something.
The second phase - the choice - where it is determined what exactly will be done.
The third phase - implementation - determines how something will be done and
Fourth phase - sustainability - the stage in which an answer is sought as a constant benefit
will be achieved.

These four phases constitute a strategic approach to the creation of an innovative


enterprise, where both the innovation system and the innovation strategy play an important
role.

There are also certain stages in managing innovation. Innovations can be managed
through the following phases: 7

Scan and search the environment to collect and process signals about potential
innovations,
Strategically choose from a large number of potential innovations those that could achieve
the greatest success,
To provide resources, buy new technology and know how to use them,
Implementing innovation, upgrading ideas up to the final realization,
Considering all previous stages and analyzing success and failure in order to learn how to
better manage the process and knowledge we have gained.

The stages of innovation management can also be divided in the following way:8

1) The first phase - Assessment of the current situation

The first phase is preceded by a NULL phase - called preparatory (team selection,
timetable, defining results and identification of major problems) - the first phase - which is
tasked with precisely and realistically determining what the current state of the company is.
This stage determines the position of the company in relation to innovation management in
relation to other companies, the determination of problems and recommendations to overcome
this problem.

2) The second phase - Defining the future situation

Some of the activities at this stage are:


development of implementation and action plan,
creating an image of an innovation system,
drafting of rules,
suggestion of improvement, etc..

3) The third phase - Implementation

Phase that ends innovation management. The activities at this stage are:
introducing all employees with an innovation system,
creating an innovation leader from selected company managers,

Buntak, Drožđek i Čovran, 2015. str. 105


7
8
Krstić, B., (2012) „ Uloga strategijske kontrole u unapređenju poslovnih performansi“, Ekomoski fakultet, Niš,str.185
support and application of technology in the innovation system,
inclusion in the system and the client and the supplier.

The key benefits of the implemented innovation system are:

increased loyalty of employees, associates, partners,


growth of motivation of employees and their performances,
systematic finding of responses to the intentions and demands of customers,
better utilization of own resources.
improving the quality of products and services.

All the stages of innovation management are interconnected and dependent on each other,
and the activity to be applied depends on the activity of the company, the characteristics of
the company, and its possibilities on the market.

NEWSPAPER INFORMATION ON TRENDS IN THE FIELD OF


INNOVATION

In today's world, different trends, types of trends are evidenced by many research, and one
of the trends is innovation. Only the area of innovation is very susceptible to the impact of
different trends that vary from country to country. Different trends are present in the countries
in the region, in countries from Europe and our country.

1. Innovation in the Republic of Serbia

In an era of accelerated technological development, innovation activities are crucial for a


stable knowledge-driven economy. Serbia understood this on time and, in 2011, launched the
"Innovation Fund" to promote innovation in the fields of science and technology.

The key component of the Fund is the "Innovation Support Project in Serbia", which aims
to strengthen the capacity of innovation activities; the project was launched in 2011, financed
by the European Union from pre-accession funds. The project encourages innovative
entrepreneurship and improves innovation activity in Serbia, which is crucial for long-term
economic growth.

In addition to providing the necessary funds, several "training companies" were organized
which brought the grant beneficiaries closer to the consultants from the Investment Fund and
to foreign experts in order to discuss together the best ways for the development and
commercialization of innovative products and services.

Serbia has a lot of potential for innovation in all areas of life and should be oriented in that
direction to improve business, announced the panel on the end of the Innovation Support
Program in Serbia, which was implemented by the Innovation Fund with the support of the
EU and the World Bank. The four-year Innovation Support Program in Serbia, aimed at
fostering innovative entrepreneurship in order to improve the competitiveness of the
entrepreneurial sector and long-term prospects for Serbia's growth, as well as to raise
awareness of technological development and innovation in the economy.

One of the biggest problems encountered by the economy in Serbia, Companies wanting
to innovate are primarily financial constraints, human resource constraints in terms of
availability to quality researchers. Modern business conditions are characterized by strong
competition, so it is increasingly difficult to get revenue, while costs are getting bigger. Bank
loans are expensive for micro small and medium enterprises in Serbia because they generally
have small capital and profit, which they can not provide assistance from the bank.

2. Indicators of innovative activities 2014-2016 in the Republic of Serbia

The data shown in the release number 197 of 20.07.2017. The Republic Institute for
Statistics, represent the result of the research on innovative activities in business entities in the
period 2014-2016. years. The survey was conducted on a sample of 3,587 business subjects.
In the research, innovative business entities are defined as business entities that in the
observed period introduced the innovation of products or processes, innovation in the
organization or marketing. The results of the survey showed that the participation of business
entities with at least one of the mentioned types of innovations is 41.2%.

The key factor for the innovative activities of a particular business entity is the size of that
entity. Two of the three big business entities are innovative, slightly more than half of
medium-sized businesses, while small business entities are slightly more than 38%.
Innovative activities are more prominent among business entities engaged in production,
where almost half of the subjects were introduced, while less than 40% of business entities
introduced innovation in service activities.9

Picture No.2 Business subjects towards innovation, activity and size


Businesses Participation
In total Inovators that did not innovators
innovate in%

In total 16957 6994 9963 41,2


Small business subjects 14174 5417 8757 38,2
Medium business subjects 2257 1228 1030 54,4
Big business subejcts 526 349 177 66,3
Production business
subjects 4723 2232 2492 47,3
Service business subjects 12233 4762 7472 38,9

Source: Republic Institute of Statistics, Republic of Serbia, Press Release, 2017.

Regarding regional representation, product / service innovation has the largest share and
are equally represented in regions, so more than a quarter of business entities introduced a
new product or service. Regional representation of innovations in organization and marketing
ranges from 20.9% to 25%, while process innovations represent from 17.4% to 25%.

9
http://www.stat.gov.rs/sr-Latn/oblasti/nauka-tehnologija-i-inovacije/inovacije30.11.2018.
- Business subjects by type of innovation and business sectors

The participation of business entities of innovators in organization and marketing amounts


to 30.2% and is less than the innovator of products and processes, where every third business
entity is an innovator. These two innovation groups mostly occur simultaneously in business
entities. Representation of business entities, who simultaneously introduced innovation of
products and processes and innovations in organization and marketing, accounted for 22.4%.
The largest representation of business entities of innovators is in the processing industry and
in professional, scientific, technical and innovation activities.

- Share in total revenue from product / service innovation

In the income structure of the business entities of the innovators, the share of income from
sales of unchanged or negligible slightly changed products is dominant, accounting for 32%.
The share of the sales of products / services that are new to the business entity and the
participation in the sale of products / services that are new to the market totals around 15%.

Financial assistance from state instances (financial support in the form of tax credits,
grants, subsidized loans or loan guarantees) received 12.5% of business entities - innovators.

- The market of selling products or services

The most numerous are business entities selling products / services on the local-regional
market, followed by those who sell on the national market. The share of innovators in relation
to non-innovators on the EU market, EFTA is twice as high, while in the markets of other
countries it is slightly higher.

- Expenses for innovative activities

Expenses for innovative activities include investments in the development of new


products, investments in the introduction of a new product on the market, funds aimed at
significantly improving existing products, services or processes, as well as funds for
innovation projects that have not yet been completed. Expenses for innovative activities
include current expenditures (salaries, equipment, materials, services, etc.), as well as
investment expenditures. The share of costs for the procurement of machinery, equipment and
software is over 71% and represents the largest share of total expenditures for innovative
activities of business entities.

- Significance of factors that were an obstacle to innovation activities

For most business entities, which are not innovators, 77% of them had no reason for
innovative activities, while 23% needed them, but did not innovate because of too many
obstacles. As the biggest obstacles to innovative activities, business entities assessed the lack
of their own financial resources for innovation and too high innovation costs.10

No.3 Significance of factors that were an obstacle to innovation activities

10
http://www.stat.gov.rs/sr-Latn/oblasti/nauka-tehnologija-i-inovacije/inovacije30.11.2018.
Importance
Faktori
High Middle Small Inappreciable

Nedostatak sopstvenih finansijskih sredstava za


inovacije 14,6 4,4 2,9 78,1
Nedostatak kredita ili privatnog kapitala za
inovacije 8,0 7,6 4,0 80,3
Previsoki troškovi inovacija 12,6 5,4 3,4 78,5
Nedostatak kvalifikovanih kadrova u poslovnom
subjektu 5,3 7,4 5,3 81,9
Nedostatak partnera za saradnju 5,5 7,2 5,5 81,9
Teško dobijanje državnih donacija i subvencija
za inovacije 9,5 4,6 5,3 80,5
Neizvesna tražnja na tržištu za vašim
inovativnim idejama 6,7 6,8 5,0 81,6
Prevelika konkurencija na vašem tržištu 7,0 6,8 5,0 81,3
Zakonska regulativa/propisi koji predstavljaju
teret 7,1 6,7 5,5 80,8
Zakonska regulativa/propisi koji stvaraju
nesigurnost 7,6 6,6 4,7 81,1
Zakonska regulativa/propisi koji nisu
konzistentni u celoj EU 5,0 5,1 6,0 83,9

3. Innovation in countries in the region and in Europe

In countries in an environment such as Croatia, Slovenia can be said to be an emphasis on


the innovation of small and medium enterprises. In Slovenia, small and medium-sized
enterprises introduce innovations in order to maintain the level of competitiveness or to raise
the existing level even further.

In Slovenia, innovation is mostly represented in products, while innovation in services has


a much smaller share.

When it comes to innovations, special progress in the Republic of Croatia occurred after
2003 when it began with certain research in this area. Earlier, it was considered that
innovation was an essential part of the company's business, but it was much less. In today's
business environment, company owners, together with employees, are becoming more aware
that innovation is a turning point that is essential to survive on the market, but innovations are
seen as a milestone for growth and enterprise development.

In the Republic of Croatia, "a new or significantly improved product or service was
introduced by 13.9% of enterprises, while 15.9% of the enterprises introduced the process
innovation. Innovative companies that have parallel product innovation and process
innovation are more characteristic of manufacturing companies than for service companies.
Large enterprises often have 14 parallel product innovation and process innovation
(40.6%) than medium, large (17.0%) or small enterprises (7.6%).11

11
Državni zavod za statistiku;str.1.;2014.
Innovation activities include all scientific, technological, organizational, financial and
commercial steps that aim to lead to the introduction of innovation. Procurement of plant,
equipment, software and buildings is the most common form of innovation activities for most
product and process innovators (80.8%), which are equally implemented by production and
service companies.

Manufacturing companies are more inclined to their own research and development
activities and design activities, while service companies are more inclined to acquire different
forms of knowledge on the market such as know-how, copyrighted works, patented and non-
patented inventions of another type knowledge.

One of the biggest obstacles to the market realization of innovation is the lack of money,
although innovators are skilled and it will be able to overcome if they know where they can
find the means for their promotion.

Cyprus has the highest level of innovation, while Spain has a level of innovation. New
products are quickly introduced by Cyprus, England and Italy. While Spain, Lithuania and
Greece are among the countries that introduce new products the slowest.

Conclusion

On the basis of everything exposed, we can pinpoint that innovation appears as a necessity
of today. Large oranges to survive in a turbulent bubble must constantly innovate their
products, processes and services, in the knowledge of their employees.

Innovation can be interpreted as a process in which product improvement is necessary to


achieve an increase in the production of the same product. In this process, the creation of
completely new production methods, as well as purchasing and distribution, there are changes
in the management, but also in the working conditions of the employees. In order for the
entire process to be successfully carried out, it is necessary to base all of its efforts on mutual
cooperation.

Today, companies apply different types of innovations. Regardless of the type of


innovation applied, it must be the key to growth and development of the company, but at the
same time it will be the power that will drive the economy of any country in the world. Since
competition is growing, both in the domestic and foreign markets of the company have
recognized the importance of applying different types of innovations.

Innovations have an important knowledge of the organizational strategy, because in this


way different advantages are achieved, such as the increase in client interaction, easier
competition, starting new forms of business, and more. In order to create innovation potential
in companies, it is necessary to apply the appropriate strategy.

The realization of innovations must be carried out in a very organized manner, and with
the constant supervision of the management in charge of innovation. He must control the
process, evaluate, correct the mistakes he finds himself on the road. Management has to
constantly listen to market pulses, first of all thinking of innovation demands.12

All organizations today should strive for an innovative organization, which is flexible,
creative, provides the opportunity to participate in decision-making and the opportunity for
individuals to prove themselves in organizations. Every organization in modern conditions
must be an organization that learns this continuously, and which has special mechanisms and
tools for applying its knowledge in business.

In today's business environment, company owners, together with employees, are


becoming more and more aware that innovation is a turning point that is essential for the
market to survive, but innovations are seen as a turning point for the growth and development
of the company.

Firms that do not innovate, quickly decay or disappear from the market. Even small
companies must do their best to avoid being deleted by big giants. The strategies it will apply
will depend on the size of the organization, their activities, the goals of business, mission,
vision. There is a wide range of strategies, but the essence is to adapt to current developments
in the environment, as only companies that succeed in it can expect a positive result in the
long run.

LITERATURE

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