The theoretical aspects of innovation

Ключевые слова: инновация, нововведение, инновационное развитие, инновационная деятельность, стратегическое управление, инновационный менеджмент.

The actuality of the subject. The innovative way of development is a crucial component of economic growth of any country in the world today. Other countries' experience shows that only the widespread innovation introduction may fill both the Ukrainian and world markets with competitive domestic production.

The key condition for the development of Ukraine's economy is to promote the innovation process. The innovative reconstruction of the economic complex will provide increasing production rates, the implementation of successful market reforms. Ukraine has declared an innovative model of the economic development. Thanks to the intensive innovation processes, the necessary material, political and social conditions of a comprehensive transformation of Ukrainian society in the direction of European standards can be formed. The formation of market economy in Ukraine and, consequently, new economic relations implies that companies should find their own consumers, direct their activities to meet their needs and demands. And it must be done in a better and faster way than the existing and potential competitors do.

Nowadays, it is obvious that the majority of national companies overcome the crisis producing and marketing new products which are not just technically perfect and of high quality but those which are demanded by the consumers, meet their needs and by using it the enterprise can use its competitive advantages as much as practical.

But now there's a contrary situation: the domestic exports are mostly represented by semi low-level processing and raw materials instead of high-tech science-intensive products, which in turn is the most striking evidence of irrational use of natural resources.

In this regard, the most essential and appropriate innovation process is the replacement of many enterprises in the country and even entire industries; because the future shape of the national innovation system will largely depend on the capacity of the state time to mobilize its internal innovative capacity.

The analysis of the land research and publications. Works by many both Ukrainian and foreign scientists are devoted to the innovation problems. Foreign scientists such as B. Brian L. Gohberg, Schumpeter, G. Clarke, K. Friedman, P. Drucker, B. Santo mainly consider the theoretical aspects of innovation. Ukrainian scientists' researches by Zabolockij, Yohna, Stadnyk, Illyashenko, Kondrashyhin, Krasnokutska, Nebrat, Pavlenko, Fedulova, Mazaraki, Androschak, Chervanov are devoted to detecting the nature, types and classification of innovation, innovation stimulation etc. However, there is no strict definition of the term «innovation» either in foreign or in Ukrainian literature as it is developing constantly and dynamically because of the variety of areas, industry specifics and peculiarities of economic development.

The aim of the article is to study the history of the concept of «innovation» and innovation theoretical aspects.

The presentation of the basic material. It is important to analyze the theoretical aspects of innovation in order to understand the socioeconomic essence of innovation in ensuring sustainable economic development.

The research of innovation activities requires primarily a study of such basic concepts as innovation and its classification, innovative process and its components. The analysis of the nature and content of economic categories data and identification of the characteristics of development and implementation of new technologies will reveal the modern concept of innovation activities of business entities.

The definition of «innovation» first appeared in the scientific research culture in the XIX century and meant introducing some elements of one system into another. The principles of technological innovations were studied only at the beginning of the XX century. Later the definition and basic approaches to the interpretation of the term as the theory of innovation also underwent significant changes.

In the literal sense innovation (English Innovation) is translated into Ukrainian as the introduction of something new and means the process of using innovations or inventions (English Invention). That is a new idea or novation (English Novation) (since the adoption to its expansion) acquires a new quality and becomes something special. The process of this transformation is called the innovation process, which means the withdrawal of innovation to the market. To give life to a new idea in a way of a new technology or a new product, it must have scientific and technical novelty, marketability of production and economic efficiency.

The representatives of the classical school of political economy have contributed to the development of the theory of innovation. So Smith described the dependence of income growth on the degree of division of labor in society [29]. He noted that the division of labor encompasses all that is now called scientific technical process. Classifying innovation, Ricardo J. identified two main groups of factors: earth retaining that increases the yield from this area by applying the best possible rotation or by a better choice of fertilizers and retaining labor and capital, i.e. improving agricultural implements, etc [27].

The innovation acquired a new face of the problem in Sombart's works. The main function of the capitalist entrepreneur is seen as receiving income through the implementation of scientific and technological innovations in materialized form. According to Sombart, the spread of innovation is the foundation of the capitalist economy, and a businessman is the carrier of scientific progress [13].

The concept of innovations was introduced by the Austrian, later American scholar Schumpeter in «The Theory of Economic Development» in 1911. He wrote about the innovation processes as new combinations that are formed as a result of the reorganization of production through the use of new technology, the emergence of new types of raw materials, the introduction of new products, the appearance of new markets [36].

Later, different researchers began to treat innovation as an economic category in their own way. So, Schumpeter along with Valens believed that innovation is the «change» [4].

Utkin called a particular «object» as an innovation [31], Nixon as «a set of technical, industrial commercial activities, leading to the appearance of new and improved processes and equipment on the market» [24], and Valdaytsev said, it was the development of new product lines based on a specially developed original technology that was able to bring a product to the market that met the needs of unsecured existing proposal [3]. Gohberg, when he described innovation, used the term «result» [7]. Researchers Lapin and Twis considered innovation as «the process» [20, 30]. Zavlin revealed an economic category of the item as «the exploitation of results». He believed that the innovation can occur in the change of manufactured products, production processes, new marketing and new forms of organization. It is important to consider innovation wider than a purely technological innovation in terms of business practices in the tourism industry [10].

Hungarian scientist and economist Santo believed that innovation is the process of birth of new ideas for marketing, providing goods and creating better facilities for the economic benefit and profit growth in all areas of business entities [28].

Polish economist Huchek understood innovation in the implementation of any new things, news, and reforms and proposes to define innovation in three ways: functional, objective and attributive. For functional approach «innovation» is seen as a process (innovations in technological and organizational processes). Attribution is innovation as change (activity, product, etc., considering the social needs). A meaningful approach for innovation is seen as the result of innovation activities (product, service, procedure or method) [34].

Drucker follows a different idea concerning the interpretation of the term «innovation». In the «How to ensure business success», he defines innovation as a specific tool of entrepreneurs, the means by which they explore the changes that exist in the economy and society, in order to use them in business or in different areas of service [8].

Ukrainian scientists Illyashenko and Prokopenko understand innovation as the final result of the creation and use of innovations embodied in the form of improved or new products (goods or services), production technologies, management practices at all stages of production and marketing of products that contribute to the development and improvement of the enterprises, that are used [16].

Zabolotskii defines innovation as the formation of new thinking, creation, development, introduction to industrial use and dissemination of new technical, trade, systemic, social, and environmental or other solutions (innovations) which satisfy certain industrial, social needs or a national interest [9]. Pavlenko said that innovation was a sequence of interrelated activities of the birth of innovation in the form of the idea to create it in the form of products, services, technologies and dissemination [25].

Lapko notes that «innovation» considers two approaches:

1) static -where innovation is the result of innovation activities;

2) dynamic - where innovation is the form of innovative process [21].

Pokropyvnyy believes that innovation is a «business implementation of innovation processes into practice» [26, с. 24].

Kondrashyhin proposes to define innovation in a particular innovation space as a specific environment, where the subjects of innovation activities exist as well as the relationship between the obtained results and innovative products. It includes such items or components:

- objects of innovation - the main link in the innovation;

- subjects of innovation relations;

- a complex system of mutual relations between elements of innovation activities [18].

Antoniuk treats innovation as a new phenomenon, innovation or any change which is brought by an entity into its own activities in order to enhance competitiveness in domestic and foreign markets [1].

Chervanov defines innovation as the technical and economic process, which, thanks to the practical use of the products of intellectual labor - ideas and inventions - leads to the creation of the best new products and new technologies which appearing on the market as innovation can provide additional income [35].

Nebrat considers innovation and innovation as a matter of macroeconomic regulation with mainly financial means of impact [23]. Khariv believes that innovation is the result of activity reflected in the form of scientific, technical, organizational or social and economic innovations, which can be obtained at any stage of the innovation process [33].

Fedulova, Mazaraki, Androshchuk consider innovation as a core for forming the state policy of technical and technological breakthrough to a new level of economic life, as a leverage of certain subdivisions formation [32].

As it can be concluded, judgment on the term «innovation» by different scientists differs slightly, but all of them see quality changes in technology and organization of production, bringing an economic and commercial effect.

In our opinion, the most complete and comprehensive is the definition that characterizes innovation as the process of implementing new ideas in every sphere of life and human activities, contributing to meet existing needs in the market and bring economic benefit [11, 12].

The Ukrainian economy is still dominated by extensive factors of development which negatively affect the way out of the economic crisis in the country. Innovative management would be a market regulator of pulling the economy out of crisis. Innovations affect the dynamics of economic growth on the one hand, open up new opportunities for the expansion of the economy, on the other hand, make it impossible to continue this expansion in traditional areas.

Innovation Management in Ukraine today is characterized by multidimensionality and evaluation aspects of innovation. Lomachenko mentions that «innovation is defined as a complex process of creating, distributing new practical products (innovations) for a new or better meeting people's needs» [22]. The main focus of innovation management is the management of innovation. Basic methods of program-oriented life cycle management of scientific and technological innovations appear in the works by Ukrainian scientists. These methods of technological system are seen as a comprehensive innovation.

Today there are several approaches to the definition of «innovation management». The most common approach defines «innovation management» as a set of specific organizational and economic methods and forms of management of all stages and types of innovative processes at the level of not only primary, but also other parts of the economy, industrial areas of the economy as a whole.

Innovative processes taking place in the economic system are many new quality changes that occur continuously in time and space. The final result of any innovation process is innovations and their specific input into economic practice is defined as innovation.

Innovation Management is one of the areas of strategic management, which is carried out at a higher level of organization. The focus of innovation management is provided by the development of innovation strategy and measures aimed to implement them, so the development and introduction of new services and technologies are the basic attention. They create the priorities of the strategies and determine their further development. If the management is interpreted as methods of the influence on the object of the management through forward and backward linkages under the influence of destabilizing factors of external and internal environment to achieve the intended result, and the science of management as the most efficient organization and managing the staff in order to obtain the intended effect, then you can define innovative management concept as well.

Vasilenko and Shmatko define innovation management as a set of specific organizational forms and methods of economic management of all stages and types of innovation processes with maximum efficiency [5].

According to Ilyenkova, Gohberg and Yahudyn [14], innovation management is a set of principles, methods and forms of innovative process, innovative activities and staff engaged in this activity.

Zavlin examines the meaning of «innovation management» according to three aspects: as the science and art of innovation management, as an activity, and as a business management [10]

Gerchikova considers innovation management as one of the areas of strategic management, which is carried at a higher level of the company management. Therefore, the focus in innovation management should be concentrated on the development of innovative strategies and means of their implementation. The development and production of new products at the same time is a priority of the company, as it defines all other areas of development [6].

Balabanov said that innovative management examines the nature of innovation, innovation process, innovation and mechanism of these processes. Based on the fact that innovation affects all the spheres of human activity and affects the economic process, it is necessary and possible to control it [2].

Kovalev determines innovative management as the system controlling the economic development. This management includes not only economic and technical problems, but also the problems of ideology as the global trend is sweeping changes associated with global explosion of innovation [17].

According to Krasnokutska innovation management is a set of informal and formal rules, principles, norms, practices, values, organizational forms, links and economic relations that regulate different areas of innovation activities [19].

Yohna and Stadnik consider that innovation management, like any other system has the following characteristics as the relationship and interaction of all system components; integrity, consistency and synchronicity in time, coordination in the mission and goals of the organization; adaptability, flexibility to changes in the environment; autonomy elements of organizational structure, management functions; versatility and multidimensionality, realized through the ability to setup, reorient, update according to changes in the environment [15].

Output. Many scientists pay attention to innovation management as a functional management system and see it as a type of functional management, which is the target of innovation processes in all economic sectors.

Functional innovation management focuses primarily on effective management process, implementation, production and commercialization of innovations, and the important point is to synchronize functional subsystems, improving the coordination of actions of the operating system, HRM and control the innovation process.

Innovation management (as the science and art of management) is based on theoretical positions of general management and the works on the problems of management of scientific and technological progress, science and technology development, as well as managing research and development.

During innovations people understand the final outcome of innovation, which has received realization in the form of new or improved products sold in the market, new or improved processes used in practice, including business. Innovative activity is the work of design and innovation, the process of creating a new product from forming ideas to the development of production, production, sales and obtaining the commercial effect (profit). Innovative activities include creating and identifying innovations (knowledge, technology and information) and their implementation for new or improved products (work, services), method of manufacture.

The study defines necessary and sufficient conditions when innovation activities are possible to develop. Sufficient conditions need financial support, which can be done using project finance. In the course of further research more attention should be paid to motivating investors' participation in project financing.

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