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Innovation Essay

1637 words - 7 pages

Question
Innovation is an important component of economic policy. Discuss

Answer

1.0 Introduction

“Today, more than ever, INNOVATION is central of survival” (Peter Drucker).
Innovation has been an important component for economic growth, national economic competitiveness and economic policy for many country. It can occur in any sector of the economy, including government services such as health or education. Supporting nowadays with the rapid growth of technology industries, many policymakers in many nations have increasingly come to see technological innovations as a key driver of economic growth. This is why so many nations have made the promotion of innovation and new technologies a ...view middle of the document...

Innovation can arise at many different points in the production process, including conception, R&D, production and deployment or marketplace usage. In addition, innovation can be about cutting costs and improving efficiency or about developing new products or services. It can simply said, innovation is a combination of both technological and non-technological elements and improving of existing or the creation of entirely new products, processes, services, and business or organizational models. Is clearly a much broader notion than R&D and is therefore influenced by a wide range of factors, some of which can be influenced by policy.

2.0 Why innovation is important?
2.1 Drives and contribute in economic growth
* Innovation is widely recognized as a key driver of national economic growth. It has been determined by various economists that technical change has a strong impact on the growth of economies throughout the world. All over the world, companies are trying to improve their technologies in order to progress their company, and to also progress the world economy. Economists have determined that approximately 1/3 of economic growth in most countries in the world is influenced by technological change. That is why innovation and technological advancements are critical to the survival of the national economies.

2.2 Innovation makes technology affordable
* Consumer technologies for example personal computers and mobile devices make all of people lives easier, allowing people to quickly connect with other people across the world and retrieve information regardless of their location. The price of these technologies has decreased rapidly because new computers are so much more powerful than older model. The latest computer may be more expensive than the previous model but relative to what the computer has to offer, the cost is lower.

2.3 Provides Ongoing Competitive Advantage
* In today’s highly competitive environment the goal of each organization is to defeat competition and win new customers. Individuals who are holders of knowledge represent a tool for the generation of innovations. Thanks to their personal creativity, their knowledge, skills and abilities it is possible to generate new innovative ideas that will help organizations to achieve a competitive advantage.
*
2.4 Raise productivity, wages and living standard
* When workers can produce more, they earn more. Means labor productivity can increase compensation (wages and benefits). These improvements in compensation and the rising living standards they afford reflect innovations that have made businesses and people more productive.
3.0 Innovation as a component in economic policies

3.1 Science and R&D policies: Spur Innovation
* R&D are important not just for pushing back the frontiers of knowledge but also for keeping up with global trends, acquiring knowledge, adapting knowledge to local circumstances, and advancing knowledge.
* R&D can boost...

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