Imacs 2016 imecs 2016 Proceedings (Preliminary version) of the 4
THE SELECTED MEASURES OF INNOVATION
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- 48.Introduction
- 49.1 Goals setting and process solutions
- 50.2 Coefficients of innovation
- 2.2 Coefficient of innovation for the more difficult and complex objects
- 52.Conclusion
- 53.References
THE SELECTED MEASURES OF INNOVATION47.Jozef Chajdiak - Mária Glatz Ďurechová – Branislav MišotaAbstract The introduction of new production and sales methods, use of the new materials and changes in the organisation of the market position, are closely connected to looking for the new approaches how to measure performance of innovation. Measurements of innovation referred in this document as the coefficients, are universal. They can be used not only at the macro and micro level, but also at different stages of innovation activities. The essence of the measurements is the pro rata indicator, which compares the volume of sales (production) of the innovative activities carried out in the overall volume of all sales carried out of the individual subject (production). The total volume of sales has a universal character. A particular problem constitutes a determination of innovative sales and even the importance of a variety of innovative sales innovation. Innovation coefficient has a universal use, it can be used on the macro and micro level. Key words: Innovation measurements, innovations, monetary coefficient, natural coefficient JEL Code: O31, O32 48.IntroductionIn the professional literature, there is not an accurate guide to the measurement of the innovation effectiveness, due to the uniqueness and specificity of each innovation. Effective innovation should contribute not only to the development and growth of the enterprise, but also to elimination of the non-effectiveness of the business processes (Vlček, 2011). We cannot forget that innovations create very difficult process in steps (Tidd, Pavitt, Bessant.2005). The first step represents a monitoring of the internal and external environment of the enterprise, the second step represents the applied research and development, following step of the pre-production and production phase results in the implementation itself (Tidd, Pavitt, Bessant, 2005). Effectiveness of innovation is appropriately measured by selected financial indicators, because they reflect costs and benefit changes (Pitra, 2006). The financial reports do not reflect the indirect consequences for the decision in detail. It is therefore the administration's assessment of the innovation using the indicators associated with the quantity of risks. (Pitra, 2006). When optimizing the innovation business (Žižlavský, 2012) we need to consider the complex system of indicators, so called innovation scorecard (Skarzynski, Gibson, 2013). It is not enough, however, just pick a few areas, use the random variables and expect to have all the relevant information for the evaluation of innovation. Such an approach can lead to the incorrect conclusions. The basic rule of innovation says: ". .. that just linking strategy and innovation performance measurement system through several administrative indicators ensures a clear picture of performance". (Davila, Epstein, Shelton, 2012). The selection and content of the indicators for evaluation must be always clear and understandable. Problem of all virtually available metrics is that the measurement of innovation should bring relevant information to the management (Hadraba, 2005). For the assessment of the capacity there is required the overall look. Innovations represent hierarchically organized system. In this context, there are important effects of the innovations systems. Valenta (2001) distinguishes simple effects and complex effects created from the simple ones. Hauschildt & Salomo (2011) recommend to carry out the measurement of the value of the innovation on the basis of three criteria: technical, economic, and others. Hierarchically organized system of innovations in the evaluation of their efficiency presumes conformity of goals themselves and market economy (on the way to maximise the volume of sales or profit or minimization of costs per unit). It holds chart effects (Dvořák, 2006). In our opinion it creates the scheme of the effects on hierarchic scheme with impact on highlighting the position and calculation of the economic indicators. The starting point for the search for methods of evaluating the performance of innovation has become our primary research: VEGA č. 1/0536/10 „Innovation as a strategic base of raising the competitive ability of the Slovak Republic. Direction, measurements and support of innovation processes." (Zajko 2011) (Chajdiak, Arbe, Novotná, 2011), VEGA č.1/1164/12 Possibility of applying information and communication technologies to increase the efficiency of international co-operation of small and medium enterprises in the Slovak Republic in the field of innovation (Zajko, 2014), VEGA č.1/0335/13 Statistical analysis of the selected indicators of the competitiveness on a series of enterprises in the Slovak Republic using double-entry bookkeeping (Chajdiak, 2015). In the processing and evaluation of the results, we found out that a significant part of the small and medium-sized enterprises still do not have an effective system for the objective measurement of innovative products. The possibility of quantifying the benefits associated with the implementation of innovation and fairness, is directly dependent on the extent of specific implemented innovation. In the case of innovation of the evolutionary nature, the outcome of the evaluation can be fairly reliable, but in the case of "revolutionary innovations", mentioned conversions are often very unrealistic (Zajko, 2014). Practical experience shows that enterprises are not able to estimate the costs on the development and implementation of innovation sufficiently and accurately, they are not able to estimate its final outcome as well. 49.1 Goals setting and process solutionsThe aim of this paper is to present the process of measuring innovation activities resulting from our multi-annual innovation research. The coefficient (a measure) of innovation in this paper is based on the ratio of innovation (innovative production, sales from innovations) to the parameter unit of the economy, including the innovative elements: (total production, total revenue):  (1)
In the essence, it is a monetary indicator. Our outcome is based on the conditions of market economy, which has a universal character. Its essential aspects are measured in monetary units. Its objective is to maximize total production and this way to maximize the amount of profit (extensive road) or to maximize the amount of profit by reducing the unit costs (intensive way). This is valid for the market economy as a whole, but also for its individual content or organizational parts (practically in almost any direction structure). Manufacturer produces with the aim to maximize profit; he sells the product to the consumer. The consumer buys a product from a manufacturer with the aim to maximize usefulness. Another manufacturer produces a product that is sold to another consumer. Again, in order to maximize profit. This cycle is decisive in our methodology to measure innovation. The mentioned operation “sale – purchase” fulfils determining characteristics and conditions for calculating the rate of innovation (we know the volume of total sales and also the individual volume of innovated sales). Operation “sale and purchase” in monetary term practically ensures the size and efficiency of production by producer and buyer. The buyer by paying for the amount of goods or services confirms, that the quantity of the goods was in such volume as paid and also that the relevant part of production has an innovative character. This way it obtains the “confirmation” about the meaningfulness of production of the certain goods or services. Seller returns embedded resources into the production process. Through collected sales he obtains funds for the additional manufacturing and for their personal consumption. Failure to pay in the operation sale – purchase” does not fulfil the essence of the market economy. A manufacturer is usually not willing to produce or sell any goods for zero costs and if the buyer does not pay, it means purchasing of goods or services for zero price, nothing is changed on the value of innovation (the size of the numerator and the denominator by adding or subtracting does not change). Declaration on the side of the purchaser that the goods or service is innovative will not change anything on the value of the numerator and the denominator of formula (1) (the act of purchase and sale was not completed-sold volume of goods or services are outstanding, with all consequences). The volume of the numerator and the denominator will be changed to zero and in the cased of the seller the cost of production (personnel costs, depreciation and cost of materials) become non-productive costs and decreasing income. The issue of this methodology is an award of the numerator in respect of (1), i.e. specification in the natural form what was upgraded (the status before the upgrade and after upgrading) and size determination of the turnover for this innovation. In natural units, we can construct a large number of indicators measuring the extension of the innovation. Those have admittedly simple explanatory power and may be homogenous and heterogeneous. When we talk about heterogeneous, we have to use monetary units.
51.2.1 Simple coefficients (rates) of innovationWe can split them in to natural, useful, efficient, economical, and we could also name the others. In the text we will focus on economical natural and economical monetary indicators. Principles of market economy make key indicators on innovation from the economic indicators and from the other natural indicators only helping additional explanatory economic indicators. Coefficients structure can be split to simple innovation coefficients and more complex coefficients, or the procedures of measurement of innovation. An essential aspect of the measurement of innovation is to define what is innovated in the measured object and what is not upgraded. Implementation of this aspect creates a range of factors (rates) of innovation or their values. It is important which part of production or production procedures of this process is considered to be innovated, and which not. The aspect is the comparison of the upgraded production volume to not-innovated production volume, or to the total volume of production (the sum of the non-innovated and an upgraded production volume). Financial coefficient of innovation Q represents a fraction, the numerator of which is the upgraded production revenue specifically defined by the manufacturer, the denominator is the total value of sales. The second version represents the percentage, the numerator of which is monetary profit from the innovative production, and the denominator is the monetary profit of the total production. The formal correctness of these two numbers is confirmed by the customer. The proof of the correctness and their amount is their real payment. There is valid relationship: While the money represents the total volume of production of the product X in the monetary terms. The upgraded production of the product X constitutes of imoney indicator (the volume of the upgraded production of the product X in monetary terms). Non-innovated production of the product X represents the cash volume of nmoney. On the expression of the monetary indicators we can also use the designation isalesiQ (volume of sales for the upgraded volume of sold production volume of the product X), ip(price in upgraded sold natural unit of the product X) and iq (natural amount of the total volume of the production of the product X). The monetary coefficient of innovation Q represents the ratio:  (3)
while the total volume of production of the product X represent as indicators money, sales (volume of the sales for the total volume of the produced volume of the product X), p (the price of the natural unit of the product X) and q (the natural amount of the total volume of production of the product X). It is virtually the same coefficient as the coefficient of natural innovation. The calculation is based on the natural (the coefficient of natural innovation) or cash units. It acquires values from 0 to 1 or from 0% to 100%. The results of the natural coefficient of innovation and financial influence of the same product X may not always be the same under the influence of inflation. In any case, the financial version of the coefficient of innovation Q acquires the values from 0 to 1. Monetary coefficient of the innovation Z: It represents more precise measurement of innovation than financial (monetary) coefficient of innovation Q. The primary objective of the market economy is profit. Sales are only a tool for reaching it. The advantage of using innovation coefficient Q there are also non-economic (social) aspects of sales indicator compared to a profit. In practice, it is also possible to achieve the loss. The results when interpreting the loss represent mainly the causes of loss than the innovation evaluation. Process of tax “optimization” of profits may also have its influence on the robustness of the reported results of economy. To illustrate the previous text we present the following example, where we applied coefficients of innovation in engineering company that supplies components for the car industry. In 2014 and 2015, we evaluated the innovative property by the weight of the product X in kg with the required direction of development of decrease. In 2014, there was invoiced a total production volume of product X equalled to 563 weight units in 2015 there was invoiced a total production volume of product X equalled only 516 weight units. From the produced volume of 563 products X in 2014 there were upgraded and sold 214 weight units and in 2015 there were 288 weight units. In 2014, the price of the upgraded component was € 21.80 per weight unit and in 2015 was innovated price of € 22.76 per one weight unit. Price for non-upgraded product in 2014 was equivalent to € 25.20 per weight unit and in 2015 remained unchanged. Calculation of the coefficient of natural innovation of the product X in 2014 and in 2015 is in table 2 in the line marked with the inov = inatur/natur. Quantity of non-innovated weight of the product X in 2014 and in 2015 is in table 2 in the line marked with the nnatur = nq. The coefficient calculation of the financial innovation coming from sales is mentioned in table2 in the line marked with inov=iQ/Q. In the lines of natur, inatur, nnatur and inov there are values used for calculating the coefficient of natural innovation. Table2: Calculations of the coefficients of innovation and its components
Source: own research In 2014 it was equal to 0.38 (38%) and in 2015 increased to 0.44 (44%). Sales for the upgraded product in 2014 were € 4665.2 and in 2015 they were 5189.28 Eur. The volume of non-innovated production of the product X in 2014 was 349 kg and in 2015 it was 288 kg, in the financial terms, the volume of the non-innovated product X in 2014 was equal to 8794.8 €and in 2015 it was equal to € 7257.6. The financial volume of the upgraded production of the product X was 4665.2 € in 2014 and 5189.28 € in 2015. Financial innovation coefficient Q was equal to 0.34 (34%) in 2014 and in 2015 to 0.42 (42%). In Tab. 2 there are provided the data necessary to calculate the coefficient of financial innovation Z. From the financial statements reporting of the company (profit levels, costs and revenues, together in € and sales quantities of components in weight units) monetary (financial) factor Z from 2014 was equal to 0, 45 and in 2015 it was 0.58, it means 13 percentage points higher. With revenues it was only 7 percentage points and in natural measuring about 6 percentage points only. The order in the event of a positive economical result is following: profit, sales and nature; in the case of a negative economic result is the order: sales and nature. 2.2 Coefficient of innovation for the more difficult and complex objectsIn the previous section we derived from the production of a single type of the product (X). In the case of sales the natural aspect of innovation has manifested in the one natural indicator (e.g. kg). In the light of the required development of the indicator, which is important for the task analysis solution, there exists only a single variant of its development: growth or otherwise decrease. The production process, however, is more complex. The number of various products, which have their natural reporting unit (kg, litres, pieces...), it is not possible to count (for example, 5 kg of product X and 3 litres of product Y). In such case there are used monetary units to express the measurements (5 kg of production of the product X has value 100 € and 3 litres of production of the product Y has value 180 €, which means in total there is 5 kg and 3 litres (two data), but regarding the financial expression of the value it is 280 € (=100€ +180€).Adding two different kinds of numbers does not make sense, but two or more financial numbers expressed in euro make a sum in euro. When X1, X2,..., XM represents volumes of the production M of various products in natural units. By selling these products from the natural amounts we get the financial award appropriate natural volumes X1, X2,...,XM in euro Q1, Q2,...,QM. Then the total volume of sales for all products is equal to:
where, there is: Q – the total volume of production in euro (total sales), QJ – volume of production of the J-product in euro (partial sales for J-product), pJ – volume of the unit of the J-product, qJ – natural amount of the J-product, J = 1, 2, ..., M – description of the J-product. The total volume of production can be split to the part of upgraded iQ and part of non-innovated nQ production volumes or Total monetary coefficient of innovation inovQ is equal  (8)
The coefficient acquires the values from 0 to 1, respectively from 0% to 100% and reflects the extent of innovation in the relevant set of products. As in the previous cases there are mentioned the following example for a better clearness of the above text. Let us have three products (A), (B) and (C). The necessary data is listed in the following table 3. Table 3: Calculation of the coefficients of innovation for the various productions
Source: own research The total financial value of the coefficient of innovation is mentioned in the last line of table 3. The task was to calculate from the first part of the table no. 3, from the values in natural terms the individual values of the coefficients iinov. Natural values of the coefficients are equal to 0.5 (50%), 0.125 (12.5%) and 0.4 (40%). It does not have a sense to count the line total from the natural values. From the figures from the individual sales the products (A), (B) and (C) in the natural term and the unit price of products (A), (B) and (C) we calculate the volume of the sales in euro mentioned in the second part of the table. Finally, we calculate the data about the financial individual coefficients of innovation and the total coefficient of innovation for the entire file. Individual financial innovation coefficient are equal to 0.5 (50%), 0.125 (12.5%) and 0.4 (40%), i.e., identical to the individual natural coefficients. The total financial innovation coefficient is equal to 0.238 (23.8%). 52.ConclusionThere is a fairly extensive range of innovation measurements. Some of them we have described in our article. One of them is the coefficient of innovation, which can be used on various levels, on the product level, financial level, management level, to the global entity level and through to the level matching, for example to the Eurozone. Financial coefficient of innovation represents the share of the sales from the innovative production to the total sales in monetary terms. In the conditions of the market economy a seller requires from the buyer the corresponding cash amount for the offered goods (innovated and non-innovated production). Buyer confirms by paying the total volume of sales and within this volume of sales for innovative products the structure and declared form.Although the mechanism of market economy allows the seller to demand any price for the offered goods in the given structure, but also has to take into account the interest of the buyer to buy the offered goods in the given structure for the lowest possible price. Qualified calculation of the coefficient of innovation requires the financial experts who are able to split production on upgraded and non-innovated, which is in some cases very difficult to reach. The above methodology for calculating the innovations we are currently testing in two start-up companies operating in the car industry. 53.ReferencesDavila, T., Epstein, M., & Shelton, R. (2012). Making innovation work: How to manage it, measure it, and profit from it. FT press. Dvořák, J. (2006). Management inovací. Vysoká škola manažerské informatiky a ekonomiky. Hadraba, J. (2005). K problematice členění a hodnocení inovací. Inovace: jediná účinná cesta k úspěchu v globální ekonomice, 31. Chajdiak, J. , Arbe, T., & Novotná, E. (2011). Konkurencieschopnos inovácií v SR. Bratislava: Statis Chajdiak, J. (2015). Konkurencieschopnosť podnikov podľa výsledkov za vybrané ukazovatele z výkazu súvahy a výkazu ziskov a strát za rok 2010 v SR. Knowler. Hadraba, J. (2005). K problematice členění a hodnocení inovací. Inovace: jediná účinná cesta k úspěchu v globální ekonomice, 31. Hauschildt, J., & Salomo, S. (2011). Innovationsmanagement. Vahlen. Pitra, Z. (2006). Management inovačních aktivit. Praha. Profesional Publishing Skarzynski, P., & Gibson, R. (2013). Innovation to the core: A blueprint for transforming the way your company innovates. Harvard Business Press. Tidd, J., Pavitt, K., & Bessant, J. (2005). Managing innovation: integrating technological, managerial organizational change. New York. Valenta, F. (2001). Inovace v manažerské praxi. Velryba. Vlček, R. (2011). Strategie hodnotových inovací: tvorba, rozvoj a měřitelnost inovací. Professional Publishing. Zajko, M. (2011). Inovácie: riadenie, hodnotenie, podpora, financovanie a transfer. Bratislava. Zajko, M. (2014). Inovačné procesy a konkurenčná schopnosť malých a stredných podnikov v SR. Knowler. Žižlavský, O. (2012). Manuál hodnocení inovační výkonnosti. Brno. Akademické nakladatelství Cerm.
Jozef Chajdiak Institute of Management, Slovak University of Technology in Bratislava, Slovakia Vazovova 5, 812 43, Bratislava, Slovakia jozef.chajdiak@stuba.sk
Institute of Management, Slovak University of Technology in Bratislava, Slovakia Vazovova 5, 812 43, Bratislava, Slovakia maria.glatz@stuba.sk Branislav Mišota Institute of Management, Slovak University of Technology in Bratislava, Slovakia Vazovova 5, 812 43, Bratislava, Slovakia branislav.misota@stuba.sk Directory: wp-content -> uploads -> 2015 2015 -> Police Militarization 2015 -> 2015 ihbb championships: hs history Bowl Round 4 – Prelims First Quarter 2015 -> Wrtp/big step · 3841 W. Wisconsin Ave., Milwaukee, wi 53208 2015 -> Rao bulletin 1 December 2015 html edition this bulletin contains the following articles 2015 -> Darton College 2015 -> Training Workshop on Planning and Implementation of Multi-Sectoral Development Programme (MsDP) in Bihar Date : 6th 2015 -> Rao bulletin 15 June 2015 html edition this bulletin contains the following articles 2015 -> Rao bulletin 1 September 2015 html edition this bulletin contains the following articles 2015 -> Rao bulletin 1 August 2015 html edition this bulletin contains the following articles 2015 -> Science, and transportation united states senate Download 2.73 Mb. Share with your friends:
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