Increasing the level of innovation on both a macro and micro scale has been included in both the Lisbon Strategy and the “Europe 2020” Strategy as a key factor for the economic growth of the European Union. Innovation activity is treated as an important element of sustainable development. The article attempts to analyze the possibilities of building a competitive advantage for Polish SME sector enterprises based on innovation, identifies the main areas of their impact, and points out the barriers hindering innovation activity.
Innovation activity and enterprise competitiveness
Among the factors shaping competitiveness, innovation plays a key role, i.e., the ability to introduce new or improved products (goods or services), new or improved processes, or new organizational or marketing methods to the market.
According to the definition adopted in the Oslo methodology, an innovative enterprise is considered to be an enterprise that has introduced at least one technical innovation (a new or significantly improved product or a new or significantly improved technological process) to the market during the period under study (usually three years).
The development opportunities of SMEs are largely dependent on innovation activity. Thanks to new products or processes, a company can gain an advantage in the market.
The impact of innovation is manifested in many aspects of an enterprise’s operations. They allow, among other things, for the improvement of product quality, the expansion of the range of offered goods and services, the adaptation of the offer to customer requirements, as well as cost reduction. The introduction of innovation aims to increase the efficiency of the enterprise’s operations. Entrepreneurs most often cite increased sales, increased profit, an increase in the number of customers, increased labor productivity, and an increased market share as the most important benefits resulting from the introduction of innovation (Chart 1).
However, despite the visible benefits that innovation brings, only a small share of enterprises in Poland implement new or significantly improved products or processes. In the years 2006 – 2008, their share in the total number of enterprises was 21.3% in industry and 15.6% in services. It is clearly visible that the largest number of innovative companies is found in the group of enterprises employing over 249 people. Small enterprises are the least innovative (according to the Central Statistical Office, in the years 2006 – 2008, the share of innovative enterprises in this group was only 14.6% in industry and 12.5% in the service sector – Chart 2).
Research conducted by PKPP Lewiatan shows that a very small percentage of SME sector enterprises in Poland (only 0.2% in 2008) build their competitive position based on innovative products. To a greater extent, entrepreneurs compete by using specialized knowledge or by adapting production or services to customer requirements. The quality of products and services and the quality of customer service play a significant role among the factors determining competitiveness. Polish entrepreneurs still build their competitive position primarily based on the price of their products (Charts 3, 4).
Innovation activity is a very costly, time-consuming, and, above all, extremely risky activity. Conducting innovation activity largely depends on the decisions of the management staff. Compared to 2006, the share of entrepreneurs from the SME sector who assess conducting innovation activities as useful for their enterprise has decreased (from 57.4% in 2006 to 33.8% in 2008).
The article comes from the “Logistyka” magazine 2/2012.