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Vol. 3 No. 3, 2022
is is an Open Access article, distributed under the terms
of the Creative Commons Aribution CC BY 4.0
1 Vinnytsia National Agrarian University, Ukraine (corresponding author)
E-mail: baldynyuk@gmail.com
ORCID: hps://orcid.org/0000-0001-9014-8866
DOI: hps://doi.org/10.30525/2661-5150/2022-3-4
FEATURES OF INNOVATION MANAGEMENT
AT MODERN ENTERPRISES
Vasyl Baldynyuk1
Abstract. The article is aimed at substantiating the peculiarities of managing the innovative activity of
enterprises in modern conditions. Methodology. The article substantiates the importance of innovation activity and
innovations for modern enterprises. The review of statistical data on sources of nancing of innovation activity
in Ukraine is carried out. The reasons that led to the actual state of innovation in the country are indicated.
The main stages of innovation management at enterprises, shortcomings and the most pressing problems are
determined. Results. Considering the issue of innovation management, it is worth noting that currently there is
no country where economic competition for leadership in world markets would not be associated with innovation,
the innovation impetus, to a greater extent, concerns Ukraine. As never before, Ukraine must be ready to use
innovative chances, increase competitiveness in order not only not to suer losses, but on the contrary – to
take advantage of new opportunities associated with EU enlargement. Under such conditions it is necessary to
increase the eciency of production factors, develop new competitive advantages that should ensure successful
integration into the European and world markets. Practical implications. Innovation activity involves the
development and implementation of new products, goods, technologies, organizational and managerial
innovations through the development and use of the innovative potential of the enterprise. That is, development
based on innovations enables enterprises to keep up with the times. Value/originality. It should be noted that
the process of managing the development of an enterprise on an innovative basis includes the processes of
introducing and using new equipment, technologies, management, organizational and other types of innovations
carried out through the coordination, organization, streamlining, regulation of innovation processes and
innovation activities of the enterprise. All this is aimed at preserving, maintaining and strengthening the
competitiveness of the enterprise as a whole.
Key words: management, innovative activity, management of innovative activity, innovation, management
process, enterprise.
JEL Classication: M11, M21, O31
1. Introduction
In modern conditions, the main way to increase
the competitiveness of industrial goods, maintain
high rates of development and protability of
enterprises is the introduction of innovations. However,
innovations are a source of development only under
the condition of their active and eective use, as well
as the creation of a favorable environment for their
implementation. us, of particular importance is
the strategic management of innovative development
of corporate enterprises, which focuses production
activities on the needs of consumers, allows for
a more exible response and timely changes, to achieve
long-term competitive advantages. at is why the
strategy of innovative development of an enterprise
can be dened as a set of actions and methods
of innovative activities that provide competitive
advantages through the development and
implementation of innovations. e ability to create
and use innovations today is recognized as the most
important factor in the formation of competitive
advantages of the company. e acceleration
of innovation processes has contributed to the
emergence of a new category of companies for
which innovation is the main activity, which leads
to an increase in competitive position. For these
companies, innovation can be interpreted as a factor
that precedes changes in the external environment.
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2. e essence of innovation processes
management at the enterprise
e innovation process is the preparation and
gradual implementation of innovative changes.
e result of this process is innovation as a change
that is implemented and used.
In general, the innovation process consists of
three stages – preparatory, production and market,
each of which contains separate stages.
e innovative activity of the enterprise is aimed
at creating and aracting innovations from the
external environment, which contribute to increasing
its competitiveness, strengthening its position in
the market and provide development prospects.
However, the ability of dierent companies to aract
innovation varies signicantly, which is mainly
due to existing resource constraints. Management
of innovative activity of the enterprise should be
carried out, on the one hand, taking into account
the potential of innovative activity in the formation
of competitive advantages, and on the other – taking
into account the investment opportunities of the
enterprise (Telenchuk, 2022).
Management of innovation activity is a component
of the management of a modern enterprise, which
includes planning, organization and stimulation of
innovation activity, implementation of innovative
projects aimed at gaining competitive advantages and
strengthening the market position of the enterprise
(Stadnyk, 2006).
According to the Law of Ukraine "On Priority
Areas of Innovation Activity in Ukraine", innovation
potential is considered as a set of scientic and
technological, nancial and economic, industrial,
social, cultural and educational capabilities of the
country (industry, region, enterprise, etc.) necessary
to ensure innovative development (Law of Ukraine
"On Priority Areas of Innovation Activity in Ukraine",
2003). At the same time, such a potential component
as innovative culture, which characterizes the level of
educational, general cultural and socio-psychological
preparation of the individual and society as a whole
for the perception and creative implementation of
the idea of developing the country's economy on an
innovative basis, is separately distinguished.
A high level of education and intellectual activity,
a pronounced sense of self-esteem, initiative,
independence and independence of views, inherent
creative inspiration, high eciency, interest in
obtaining results, the ability to perform labor
functions at the level of world standards are important
for the implementation of innovative activities.
e more creative tasks and intellectual functions
are involved in the work, the more noticeably the role
of intangible incentives in the process of innovation
increases.
Management of innovative development of a
business entity should be focused on achieving its
goals (winning a larger market share, increasing
prots in the current period or in the future, ensuring
high rates of sustainable economic development,
etc.) in a competitive environment, even when the
goals of other enterprises may not coincide (and
usually do not coincide) with their goals (Cherep,
Oleynikova, Cherep, Tkachenko, 2012). is conict
of goals must be duly taken into account, and the
goals outlined must be reconciled with the possibilities
for achieving them.
In today's economy, the role of innovation has
increased signicantly. is is due to the fact that
in a market economy innovation is a weapon of
competition, as innovation leads to lower costs, lower
prices, increased prots, the creation of new needs,
the ow of money, to improve the image (rating)
of the manufacturer of new products, to open and
capture new markets, including foreign ones.
3. Features of innovation process management
e main fundamental principle of economic
prosperity of any enterprise and the country as
a whole is the constant implementation of innovative
activities and creation of industrial property objects –
the basis for the production of new competitive
products, the introduction of new competitive
technologies, providing super-prots.
e peculiarity of innovative activity is that it is
an activity of increased risk compared to ordinary
entrepreneurship (which is also carried out at one's
own risk). is increased risk is due to the novelty,
the creative nature of scientic and technical work,
the possibility of obtaining both positive and
negative results, so most entrepreneurs do not want
to engage in innovation (Steblii, Tuvakova, 2016).
e peculiarity of innovation management is to
ensure quality decision-making under conditions
of uncertainty and risk. However, the successful
implementation of this task in most cases is
hindered by the creation of the necessary
organizational structure, which is especially
relevant for large enterprises. In this regard,
it is advisable for the laer to pay aention to
the exibility and adaptability of small rms to
constantly changing conditions (Tomashuk, 2020). In
such cases, the eciency of innovation management
can be signicantly improved by creating special
units or structural units on a permanent or temporary
basis, for example, such as an internal enterprise.
Adaptation of the organizational structure of a
large enterprise to the specics of innovation activity
will contribute to its eciency and eectiveness.
e process of management of innovative activity
involves the implementation of certain functions
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related to the organization, planning, motivation,
regulation and control of the implementation of
innovation. To ensure the eectiveness of this process,
domestic enterprises should create appropriate
systems for the implementation of these functions,
that is, it is necessary to pay special aention to the
formation of an eective mechanism of innovation
activity management, both in theory and in practice.
4. Innovative activities of industrial enterprises
Eective management of innovative activities
involves the implementation of the following
basic steps:
1) determination of the most risky areas of the
enterprise's activity;
2) use of various sources of innovative ideas;
3) determination of the quantitative goals to be
achieved by the innovative project;
4) determination of the main stages of work on the
implementation of the innovative project, while
the transition to the next stage is impossible until
the previous one is completed. Table 1 shows the
number of innovatively active enterprises in Ukraine
by type of economic activity.
In practice, the investment activity of industrial
enterprises decreases from year to year. For example,
the share of the number of innovation-active
industrial enterprises in 2017 was 16.2%. In 2019,
782 enterprises carried out innovative activity in
industry. At the same time, the share of the number of
industrial enterprises that implemented innovations
(production and/or technological processes) in the
total number of industrial enterprises was 15.8%.
Of the total number of innovatively active
enterprises were: internal and external GDRs – 24.4%;
purchase of machinery, equipment and soware –
64.7%; acquisition of external knowledge – 4.5%;
other work – 20.6% of enterprises. By types of
economic activity, the largest shares of innovatively
active enterprises are food production – 16.8%,
machinery and equipment production, n.i.i.o.g.
(not included in other groups) – 10,2%.
e dynamics of changes in the number of
innovatively active enterprises in Ukraine is shown in
Figure 1.
Table 1
e number of innovatively active enterprises by type of economic activity
e number of innovatively
active enterprises, units
Share of innovation-active enterprises
in the total number of enterprises, %
2016–2018 2018–2020 2016–2018 2018–2020
Total 8173 2281 28,1 8,5
Industry 4060 1550 29,5 12,9
Mining and quarrying 107 26 21,9 10,7
Processing industry 3626 1452 31,8 13,1
Supply of electricity, gas, steam and air conditioning 143 37 20,0 11,5
Water supply; sewerage, waste management 184 35 15,8 8,9
Transport, warehousing, postal and courier activities 568 133 15,5 3,6
Information and telecommunications 619 121 31,5 6,4
Financial and insurance activities 222 12 38,3 6,5
Source: formed according to the data of the State Statistics Service of Ukraine
1462
1679
1758 1715
1609
824 834 759 777 782
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Number of enterprises, units
Years
Figure 1. Number of innovatively active industrial enterprises in Ukraine (2010–2018), units
Source: formed according to the data of the State Statistics Service of Ukraine
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Based on Figure 1, it can be concluded that in
recent years there has been a signicant decrease in the
number of innovatively active industrial enterprises
in Ukraine, which can be partially explained by
the fact that part of the country's territory with
industrial production has become beyond Ukraine's
control and, in general, by the deterioration of the
cyclical component of the industrial products market.
5. Financing of innovative activity
Development and implementation of innovations
requires investment resources, which are necessary
to nance research and development, initiation
and implementation of production of innovative
products, their implementation and improvement.
Eective innovation activity is possible only if the
optimal amount of investment resources is aracted.
e conditions for aracting investments depend
on the investment climate of the country, region
and enterprise. Today, the pace of investment in the
country is low, and the distribution of investments
by regions and sectors of the economy of Ukraine
is uneven. To a large extent, investment activity in
Ukraine is constrained by low eective demand
of the population.
e analysis of statistical data on the sources of
nancing of innovation activities showed that only
a small share of the costs of innovation activities is
covered by the state budget (Table 2).
e innovative activity of industrial enterprises
in Ukraine directly depends on the results of their
economic activity, as the largest source of nancing for
innovations at industrial enterprises is their own funds,
which in 2020 amounted to UAH 12,297.7 million.
General trends in the development of market
economic systems show that the most eective is the
activity of business entities that choose an innovative
model of development. For successful management
in modern economic conditions, strengthening the
position of the enterprise in the market, it is important
to constantly improve existing products, production
technologies, methods of their implementation,
introduce technical innovations, develop new products
and bring them to market (Steblii, Tuvakova, 2016).
e enterprise, which relies on innovations, is
forced to improve the production base (logistics,
structure of the distribution network, system of
goods movement) and restructure the organizational
structure of management in order to nd strategic
ways to increase competitiveness. On this basis, the
adaptability of the enterprise to the dynamics of the
market environment is expanding. e direction
(development) of innovation development should
correspond to both the internal and external
environment, which is determined by the market
Table 2
Sources of nancing of innovative activity of industrial enterprises
Year s
Expenditures
on innovations,
UAH mln
Including at the expense of
own funds
of enterprises state budget funds funds of non-resident
investors
funds from
other sources
UAH mln UAH mln UAH mln UAH mln
2000 1757,1 1399,3 7,7 133,1 217,0
2001 1971,4 1654,0 55,8 58,5 203,1
2002 3013,8 2141,8 45,5 264,1 562,4
2003 3059,8 2148,4 93,0 130,0 688,4
2004 4534,6 3501,5 63,4 112,4 857,3
2005 5751,6 5045,4 28,1 157,9 520,2
2006 6160,0 5211,4 114,4 176,2 658,0
2007 10821,0 7969,7 144,8 321,8 2384,7
2008 11994,2 7264,0 336,9 115,4 4277,9
2009 7949,9 5169,4 127,0 1512,9 1140,6
2010 8045,5 4775,2 87,0 2411,4 771,9
2011 14333,9 7585,6 149,2 56,9 6542,2
2012 11480,6 7335,9 224,3 994,8 2925,6
2013 9562,6 6973,4 24,7 1253,2 1311,3
2014 7695,9 6540,3 344,1 138,7 672,8
2015 13813,7 13427,0 55,1 58,6 273,0
2016 23229,5 22036,0 179,0 23,4 991,1
2017 9117,5 7704,1 227,3 107,8 1078,3
2018 12180,1 10742,0 639,1 107,0 692,0
2019 14220,9 12474,9 556,5 42,5 1147,0
2020 14406,7 12297,7 279,5 125,3 1704,2
Source: formed according to the data of the State Statistics Service of Ukraine
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(market opportunities and threats), taking into
account the pace of scientic and technological
progress and is determined by changes in the micro
and macro environment.
For an industrial enterprise, the technological and
product innovations that have the greatest impact on
its sustainable economic development can be divided
into the following main categories:
1) innovations related to the method of manufacturing
the product;
2) with a change in product characteristics;
3) with a change in the range of products.
Management of innovative activity is an integral
part of the production and economic activity of the
enterprise, which carries the impetus for development
based on new approaches to solving ordinary
production problems (Tychynsky, 2006). e optimal
combination of production and innovation activities
allows not only to constantly improve the production
process and products, but also to act proactively,
identify new promising areas or forms of business,
diversify activities to meet new social needs.
6. Expenditures on innovation activities
In 2020, enterprises spent UAH 14,406.90 million
on innovations, including UAH 10,185.11 million on
the purchase of machinery, equipment and soware,
UAH 3,486.30 million on internal and external
research and development, UAH 37.49 million on the
acquisition of other external knowledge (acquisition
of new technologies), and UAH 1,079.45 million on
other work related to the creation and implemen-
tation of innovations (other costs) (Table 3) (Ministry
of Economy of Ukraine, 2022).
Consider the structure of expenditures on innovation
by type of economic activity (Figure 2).
By types of economic activity, the largest amount
of funds for innovation activities was spent by food
production (2927.252 million UAH), metallurgical
production (1924.217 million UAH), production of
basic pharmaceutical products and pharmaceuticals
(1868.092 million UAH).
7. Implementation of innovations
at industrial enterprises
In 2020, the Ukrainian industry introduced
4066 units of new products, see Table 4.
Among the most important areas of innovative
development of industrial enterprises should be
highlighted further improvement of products in
terms of integration into its characteristics of modern
digital technologies related to the operation of
products. Expanding the range of products with
dierent price-quality ratio will also contribute to
reaching a wider range of consumers (Kolomiets,
Tomashuk, 2021). It is important to change the
priorities of industrial production development
in favor of those industries that are able to create
high-tech products and move away from the raw
material model of national economic development.
e innovation policy of the enterprise should take
into account the specics of the industry to which
it belongs, try to ensure the ecient use of available
resources, build partnerships with all potential
participants in the innovation process. At the same
time, when making managerial decisions, it is impor-
tant to determine the eects of the introduction of
innovations in the areas of their formation (economic,
technological, social, environmental). Among the
promising directions of increasing the innovative
potential of an industrial enterprise, it is necessary to
note the need to develop teamwork methods among
Table 3
Innovation expenditures of industrial enterprises
Year
Expenditures
on innovations,
UAH mln
Among them
scientic research
and development (GDR)
including other innovation costs
(excluding GDR)
GDR performed
by own forces
GDR performed
by other enterprises
UAH mln UAH mln UAH mln UAH mln
2010 8045,5 996,4 818,5 177,9 7049,1
2011 14333,9 1079,9 833,3 246,6 13254
2012 11480,6 1196,3 965,2 231,1 10284,3
2013 9562,6 1638,5 1312,1 326,4 7924,1
2014 7695,9 1754,6 1221,5 533,1 5941,3
2015 13813,7 2039,5 1834,1 205,4 11774,2
2016 23229,5 2457,8 2063,8 394,0 20771,7
2017 9117,5 2169,8 1941,3 228,5 6947,7
2018 12180,1 3208,8 2706,2 502,6 8971,3
2019 14220,9 2918,9 2449,9 469,0 11302,0
2020 14406,9 3486,3 2650,4 835,9 10920,6
Source: formed according to the data of the State Statistics Service of Ukraine
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Vol. 3 No. 3, 2022
2927,3
581,8
1025,2
1868,1
1924,2
525,5 1358,5
Production of food products
Production of beverages
Production of chemicals and chemical
products
Production of basic pharmaceutical
products and pharmaceutical
preparations
Metallurgical production
Production of electrical equipment
Figure 2. Structure of expenditures on innovation by types of economic activity
Source: formed according to the data of the State Statistics Service of Ukraine
Table 4
Implementation of innovations at industrial enterprises
Year
Share of the number of
industrial enterprises
that implemented
innovations
(production and/
or technological
processes) in the total
number of industrial
enterprises, %
Number of types of
innovative products
(goods, services)
introduced in the
reporting year, total
units
Among them
Share of the volume
of sold innovative
products (goods,
services) in the total
volume of sold products
(goods, services) of
industrial enterprises, %
are new to the market were sold machines
and equipment
2000 14,8 15323 - 631 9,4
2001 14,3 19484 - 610 6,8
2002 14,6 22847 - 520 7,0
2003 11,5 7416 - 710 5,6
2004 10,0 3978 - 769 5,8
2005 8,2 3152 - 657 6,5
2006 10,0 2408 - 786 6,7
2007 11,5 2526 881 881 6,7
2008 10,8 2446 840 758 5,9
2009 10,7 2685 719 641 4,8
2010 11,5 2408 606 663 3,8
2011 12,8 3238 900 897 3,8
2012 13,6 3403 672 942 3,3
2013 13,6 3138 640 809 3,3
2014 12,1 3661 540 1314 2,5
2015 15,2 3136 548 966 1,4
2016 16,6 4139 978 1305 … 4
2017 14,3 2387 477 751 0,7
2018 15,6 3843 968 920 0,8
2019 13,8 2148 418 760 1,3
2020 5 14,9 4066 691 647 1,9
Source: formed according to the data of the State Statistics Service of Ukraine
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the sta, to improve the skills of those employees
whose activities are related to innovative developments.
8. Conclusions
us, it can be stated that the innovative activity of
the enterprise is the key to its eective functioning.
However, innovation activity, like any other, requires
systematic management through a mechanism that
should be an element of the overall mechanism of
strategic management of the enterprise. Innovation
activity is one of the main components of the process
of ensuring the successful functioning of enterprises.
erefore, modern economic conditions require
intensive innovation activities, eective organization
of research and development, implementation of
innovations, reduction of innovation risks, strategic
management of innovation activities of each enterprise.
Intensication of innovation activity of domestic
enterprises will contribute to strengthening the
competitive advantages of the industry both in
domestic and foreign markets through the
implementation of scientic and technical potential,
which will be manifested in:
1) increasing the quality and, accordingly,
competitiveness of products due to the use of new or
modernized production methods;
2) capturing new markets and increasing the
volume of product sales through the introduction of
innovative technologies in the sales organization and
positioning of goods on the market;
3) improving the nancial results of enterprises due
to the increase in cash receipts from the sale of
innovative products;
4) optimization of business processes and rational
use of the enterprise's production capacities by
launching advanced innovative technologies.
Industrial enterprises in Ukraine are the
main subjects of the market economy, and the
competitiveness of the national economy as
a whole depends on their competitiveness. erefore,
the introduction of innovations at industrial
enterprises should be considered as a continuous
process aimed at creating products and organizing
production processes that are more ecient
than their existing counterparts in the market
environment.
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Received on: 5th of September, 2022
Accepted on: 10th of October, 2022
Published on: 31th of October, 2022
