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New ideas do not necessarily contribute to the success of innovative enterprises

Date:
January 9, 2015
Source:
Kaunas University of Technology (KUT)
Summary:
Extensive research has been conducted on dynamic capabilities’ impact on economic competitiveness with 450 innovative and non-innovative Lithuanian enterprises. There is a strong theoretical background supporting a claim that competitiveness of an enterprise and its financial results are related to its dynamic capabilities, that is – to its capacities to constantly integrate, create and reorganize human and other resources reacting to the changing environment. Although the dynamic capabilities in enterprises have been researched for more than 20 years, this is the first time when theoretical implications have been grounded by practical findings from Lithuanian enterprises.
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Kaunas University of Technology (KTU) researchers have conducted an extensive research on dynamic capabilities' impact on economic competitiveness with 450 innovative and non-innovative Lithuanian enterprises. There is strong theoretical background supporting a claim that competitiveness of an enterprise and its financial results are related to its dynamic capabilities, that is -- to its capacities to constantly integrate, create and reorganise human and other resources reacting to the changing environment. Although the dynamic capabilities in enterprises have been researched for more than 20 years, this is the first time when theoretical implications have been grounded by practical findings from Lithuanian enterprises.

Lithuania Among 'Moderate' Innovators in EU

Lithuanian in the EU's Innovation Scoreboard is among 'moderate innovators'. The research conducted by KTU School of Economics and Business answers the question what is characteristic for successful innovative enterprises and what capabilities are of crucial importance for Lithuanian enterprises wishing to develop innovations.

The enterprise dynamic capabilities can be divided into 5 groups: capability to monitor business environment and to notice the early signs of change (1); capability to recognise and to choose emerging new business possibilities (2); capability to distribute (often unsufficient) resources efficiently (3); capability to create and sell knowledge intensive new products and services (4); capability to obtain and to renew knowledge, skills and abilities (5).

Successful Risk Management Is a Predictor of Success

According to the head of Dynamic capabilities' research group, KTU Vice-Rector for Research, professor Asta Pundzienė, there are several instances distinguishing the successful innovative enterprises among others.

'The successful innovative enterprises tend to choose possibilities having higher added value, although it is often related to higher risks. Plus, these enterprises devote more time for searching for original ideas', says Pundzienė.

According to her, the trial-and-error method of testing numerous new ideas used by less successful enterprises is rarely efficient as it wastes a lot of time.

Pundzienė says that a successful enterprise is not the one implementing every new idea, but that which is capable to evaluate ideas, which invests in innovative project management and is continuously learning. Innovative projects tend to be related to higher risks, therefore enterprises which invest into project management competences, attraction of needed resources and thorough analysis of environment tend to be more successful.

Networking, Personal Involvement and Team Work Are of Crucial Importance

The research shows that many Lithuanian enterprises are not sufficiently active in creating local and international collaboration networks.

According to Pundzienė, successful innovative enterprises tend to actively participate in international professional networks, they have representatives in boards and councils of other organisations and enterprises, they partner universities and research institutions, collaborate with researchers and local communities. All this networking ensures the necessary information flow into the enterprise.

Moreover, an enterprise should devote no less than 10 percent of its time to unrelated activities. This ensures generation of new ideas.

Team work is also one of the success factors. The research shows that it is not common practice in many Lithuanian companies.

Personal involvement of employees is another characteristic of a successful enterprise.

'In a successful company its employees devote their personal time to search for innovative ideas, and they offer those ideas for implementation. These enterprises work according to the principle: if there is no leader for an innovative project, there is no project. The initiative in those enterprises rises from the employees and not from the management', says Pundzienė.


Story Source:

Materials provided by Kaunas University of Technology (KUT). Note: Content may be edited for style and length.


Cite This Page:

Kaunas University of Technology (KUT). "New ideas do not necessarily contribute to the success of innovative enterprises." ScienceDaily. ScienceDaily, 9 January 2015. <www.sciencedaily.com/releases/2015/01/150109084639.htm>.
Kaunas University of Technology (KUT). (2015, January 9). New ideas do not necessarily contribute to the success of innovative enterprises. ScienceDaily. Retrieved May 23, 2017 from www.sciencedaily.com/releases/2015/01/150109084639.htm
Kaunas University of Technology (KUT). "New ideas do not necessarily contribute to the success of innovative enterprises." ScienceDaily. www.sciencedaily.com/releases/2015/01/150109084639.htm (accessed May 23, 2017).

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