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OPTIMAL TIMING OF INNOVATION AS A PRECONDITION OF SUCCESSFUL INNOVATION ON THE GLOBAL MARKET

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The global marketplace today is characterized by profound social, economic and technological changes and innovation facilitates the process of adaption to many of these changes. Innovation management is now considered as an integral part of the management of companies, which would like to be at the market for a long time. This paper focuses on an important characteristic which significantly affects the operation of the innovation process the role of time in seeking the optimum timing of innovation. The paper describes two main ways: continuity and discontinuity in innovation. In the next part the paper describes temporary parallel discontinuity and time gap discontinuity, which are two options of discontinuity in innovation. The last part focuses on the sustainable growth of innovation
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15th International Scientific Conference Globalization and Its Socio-Economic Consequences
University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of
Economics 7th 8th October 2015
254
OPTIMAL TIMING OF INNOVATION AS A
PRECONDITION OF SUCCESSFUL
INNOVATION ON THE GLOBAL MARKET
Katarína Janošková1,a,*, Pavol Kráľ2,b
1Žilinská univerzita v Žiline, Fakulta prevádzky a ekonomiky dopravy a spojov, Katedra ekonomiky,
Univerzitná 8215/1, 010 26 Žilina, Slovenská republika
2 Žilinská univerzita v Žiline, Fakulta prevádzky a ekonomiky dopravy a spojov, Katedra ekonomiky,
Univerzitná 8215/1, 010 26 Žilina, Slovenská republika
akatarina.janoskova@fpedas.uniza.sk, bpavol.kral@fpedas.uniza.sk
*Corresponding author
Keywords: Innovation, Management of innovation, Optimal timing of innovation, Continuity
in innovation, Discontinuity in innovation.
Abstract. The global marketplace today is characterized by profound social, economic and
technological changes and innovation facilitates the process of adaption to many of these
changes. Innovation management is now considered as an integral part of the management of
companies, which would like to be at the market for a long time. This paper focuses on an
important characteristic which significantly affects the operation of the innovation process
the role of time in seeking the optimum timing of innovation. The paper describes two main
ways: continuity and discontinuity in innovation. In the next part the paper describes temporary
parallel discontinuity and time gap discontinuity, which are two options of discontinuity in
innovation. The last part focuses on the sustainable growth of innovation.
JEL Classification: 030, 031, 039
Introduction
The current global market is characterized by significant social, economic and technological
changes. Changes are ubiquitous, such as innovations that make it easier to adapt to these
changes. As a result, innovations play an important role in the national economies of all
countries in strengthening and maintenance of high company performance, increasing their
competitiveness, improving living standards and creating a better quality of life
(Gopalakrishnan, 1997).
Innovation is generally considered to be a key competitive advantage of any company
(Volberda, 2007, Yamin, 1997, Mol, 2009, Michie, 1995) and as a prerequisite for the
attainment of the goals of sustainable development policy. Innovation is a driver of the current
economy and positive change in society. It is what any economy needs. (Zaušková, 2014). They
are considered to be one of the key factors in the development of modern society (Zaušková,
2012). It is very closely related to the course of economic cycles, while the opinions on the
issue of the relationship between innovation and economic cycles vary. Many economists tend
to believe that real innovation lead to economic cycles. Opponents of this theory are those who
believe that innovation is just a consequence of alternating economic cycles and consider them
only as a way to adapt to economic development, competition, globalization and the increasing
demands from customers. Nevertheless, we acknowledge their mutual connections and
15th International Scientific Conference Globalization and Its Socio-Economic Consequences
University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of
Economics 7th 8th October 2015
255
dependence. Economists are agreed that the impact of innovation on the national economy is
significant (Gabryšová, 2014).
A significant factor on which we follow links between innovation and the business cycles is
the time (development time). In both cases there is a gradual shortening of their duration.
Economic cycles and environmental innovation cycles are becoming increasingly shorter,
which forecasts very quick trends. This fact confirms the significant dependence. And this time
aspect represents a core criterion by which we analyse innovation in this contribution.
The main objective is to emphasize the importance of the time factor in one of the key areas
of innovation management - finding optimal timing of innovation.
Optimal timing of innovation
Innovation management is the result of applying of new knowledge from outside of the
internal environment of the company (Mol, 2009). One of the most important decisions in the
context of innovation management is the decision on the appropriate timing of innovation.
Any promising innovation may not produce the expected result if it is not implemented at
the right time. The principle of the correct timing of a new innovation on original object
(product, service, process, technology, etc.) can be represented based on the sequence of
S-curves, which express the correlation of innovation performance and time. Taking into
account the time factor, theoretically there may occur several situations:
continuity in innovations in terms of time
discontinuity in innovations in terms of time:
o temporary parallel discontinuity in innovations
o time gap discontinuity in innovations.
In industry, the timing of innovation is more or less abstract, as it is considered the
advantages and disadvantages arising from pioneering or discipleship (Gilbert, 1996). In
general, a company can choose from three options for the timing in relation to competitors:
leader (pioneer), follower or imitator (Xu, 2013). The timing of innovation is less abstract in
other disciplines, such as marketing and strategic management (Gilbert, 1996).
Continuity in innovations in terms of time
Innovation can follow each other continuously in terms of time (Fig. 1) - the original object
of innovation is replaced by a new one at certain point in time (ts - swap time). In terms of
practical application this is a wrong way because it is possible that at some point in time the
original object was replaced by a new one, without delays, which is caused by the adaptation
of a new object of innovation in the new environment.
15th International Scientific Conference Globalization and Its Socio-Economic Consequences
University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of
Economics 7th 8th October 2015
256
Figure 1: Continuity in Innovations in Terms of Time
time
Efficiency
of
innovation
ts
New object of
innovation
Initial object of
innovation
Source: own processing
Discontinuity in innovations in terms of time
Innovation can follow each other discontinuously in time. This approach is based on the
theory of discontinuity, which justifies the application in the management of Peter F. Drucker
in 1968 in his work Age of discontinuity. In this respect, there are two ways.
Temporary parallel discontinuity in innovations
The principle of discontinuity in the context of innovation management applies under
implementation of the new innovation object before the end of the existence of the original
object of innovation (Fig. 2). This means that at a certain (short) period of time (ts1 - ts2) both
objects of innovation (original and new) coexist.
Paradoxically, precisely the principle of discontinuity ensures the continuity of operation of
the object, because at the end of life of the original object the new object of innovation is already
established (in case of successful innovation) in the new environment smoothly and without
loss of time it replaces the original object, which is eliminated. In global competition, the best
chance for long-term growth precisely those companies that can create new S-curve before the
destruction of old one. The new S-curve should be established even before the old start falling,
which requires constant ingenuity and creativity.
To ensure success, it is essential to have the ability to think in the dimensions of the next S-
curve. Companies must think ahead and be ready to leave the past. Otherwise, they find
themselves captive of the current S-curve. It is important that the company does not leave the
first curve before it builds a second one, resulting in a temporary coexistence of present and
future (Košturiak, 2008).
15th International Scientific Conference Globalization and Its Socio-Economic Consequences
University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of
Economics 7th 8th October 2015
257
Figure 2: Temporary Prallel Discontinuity in Innovations
time
Efficiency
of
innovation
ts1
New object of
innovation
Initial object of
innovation
ts2
Source: own processing
The issue of the correct timing of innovation (that leads to the related decisions on the length
of time when there are both original and new object in a parallel coexistence) is complicated
and opinions on it vary. In general principle, the later innovation is introduced, the lower are
the costs and the lower is its implementation risk of failure. Indirect costs are growing by the
later introduction of innovations due to lower corporate productivity, old technology or product,
it also reduce the competitiveness (Kovac, 2011).
Time gap discontinuity in innovations
Discontinuity principle in this approach is understood in terms of implementation of the new
object innovation after the completion of the existence of an original object (Fig. 3). The
company, applying this approach, usually awaits full potential of the original object and then
deals with other options (successors).
It is the least appropriate approach because there is a time gap (tg1 tg2), during which there
is no longer available the old object nor the new one. This arises due to the failure of strategic
innovation management in the company.
Figure 3: Time Gap Discontinuity in Innovations
time
Efficiency
of
innovation
New object of
innovation
Initial object of
innovation
tg2
tg1
Source: own processing
15th International Scientific Conference Globalization and Its Socio-Economic Consequences
University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of
Economics 7th 8th October 2015
258
Sustainable growth of innovation
Despite the tendencies of replacing the original objects by the new ones, all the approaches
mentioned above are being criticized, because the old object requires the liquidation regardless
its usability. That is the reason why companies often tend to prefer the possibilities of using and
improving the original object than to design a new object. (Kováč, 2011).
Figure 4: Sustainable Growth of Innovation
time
Efficiency
of
innovation
Launching
Growing
Stagnation
End of life
Growing
again Second S-curve
First S-curve
Sustainable growth of innovation
Source: own processing
That possibility is referred to as the strategy of sustained growth innovation. The situation is
characterized by continuous S-curve both in terms of time as well as innovation performance
(Fig. 4). Sustainable growth through innovation is most often carried out by the search and the
exploitation of opportunities in existing or new markets, or by creating new markets.
Conclusion
Based on the evaluation of chosen field of innovation management, which is the optimal
timing of innovation, we can say that time is a characteristic significantly influencing the future
success of the innovation. Only a company which is able to identify the perfect moment of
innovation, can be considered to be successful, especially in terms of innovation management,
and can gain a significant competitive advantage.
Acknowledgment
This paper is prepared with the support of the project "Education quality and human
resources development as the pillars of a knowledge society at the Faculty PEDAS,
University of Žilina in Žilina.“, ITMS project code 26110230083, University of Žilina.
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15th International Scientific Conference Globalization and Its Socio-Economic Consequences
University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of
Economics 7th 8th October 2015
259
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The Approach to Knowledge and Innovation of SMEs of Moravskoslezsky Region and of Žilina -Administrative Region
  • M Gabryšová
  • J Vodák
Gabryšová, M. and Vodák, J. (2014). The Approach to Knowledge and Innovation of SMEs of Moravskoslezsky Region and of Žilina -Administrative Region. 17 th International Colloquium on Regional Sciences. Brno, CZ: Masaryk University, p. 217-223.