Trends and challenges in the development of innovation entrepreneurship

Moscow States University of economics, statistics and informatics (MESI)

Ks. Scherbakova

DMG-101

Trends and challenges in the development of innovation entrepreneurship.

The subject of my report is ‘Trends and challenges in the development of innovation entrepreneurship’. To begin with, I would like to say that innovative entrepreneurship is becoming the cornerstone of economic growth in the developed world. It is the source of jobs and high living standards for individuals, as well as great benefits for society in the form of technical progress and economic development.

Today more than 79% of enterprises implement new innovation in order to extend the variety of their products and to get the segment of market. The main purpose of innovation active enterprises is to reduce expenses of production. Every innovation activity is entrepreneurial and it based on:

• research of new ideas and its valuation
• research of necessary sources;
• patenting and approval;
• development of new methods in production;
• marketing;
• adoption;
• and as a result getting cash income and personal satisfaction of achieved results;

However, not every business is innovative, but only one which allows extracting a business income as a result of creation a production and using an innovation product. In a market economy, the development of innovative business depends on consumer demand for innovation, the availability of advanced scientific and technological capabilities of the national economy, the functioning of venture capital firms and investors, who finance risky innovation.

Innovations are not definitely fixed structures so that there are some problems, which decelerate the adoption of new technologies in modern production. I suggest you to have a closer look on some of such difficulties:

• first of all, it is the risk of originality. It means that the investment in "disruptive technologies" is a very risky in terms of receiving desired results, ie really interesting new technology or product. Investments in basic science are particularly risky, therefore they usually concerns for a transfer competence of the state. However, investment in original technology is the most interesting, but only when a possibility of their practical application really exists and when the market is ready to accept products related to high technology.
• furthermore, it is the risk of technological inadequacy. There is a fundamental difference between technology as a product of intellectual activity and technology as the object of investment. Technology becomes attractive for investments, when it will be demanded by the market. When a developer announces that his technology is unique, a natural question is maybe this technology is generally not needed if anyone in the world did not work .in this area
• the next problem is the risk of intractability of projects. It is a well-known fact that, well conceived and originality of the project, skills and team spirit are equally important components, which are necessary for successful implementation of the investment project. In Russia, for example, and other countries these components are in a certain conflict with each other, because the professional qualities that necessary for the development of original technology are very different. A balanced mix of different specialists in the same team is quite rare phenomenon. The personal motivation of developers is highly important in the project. Commercial success in the market, creating a highly profitable company largely correlate with the investor’s objectives. And aspiration for seeing developer’s idea completely realized at any cost and proving his uniqueness may come into conflict with the interests of investors under certain conditions.

There are some ways to solve these problems and improve the efficiency of the large innovative companies. They are:

• the possibility of large-scale using of innovation;
• high initial costs in the production of innovative products;
• using complex technical systems, conducting long-term test procedures;
• testing, licensing and certification of product innovation;