Innovation Commercialization: Pathways, Types, and Economic Impact

Enhancing Innovation: Beyond Per Capita Income

Innovation is much more than just increasing per capita income.

The role of Entrepreneurial Firms is to promote change and progress in the structure of business and society, thereby promoting innovation.

What Innovation Leads To

• New products
• Stimulating market interest

Economic Effects of Innovation

Supply Side Effect

The new capital created expands the capacity for growth.

Demand Side Effect

An increase in demand for new output.

The Product-Evolution Process

The product-evolution process describes how innovation develops and commercializes through entrepreneurial activity, which consequently stimulates economic growth. It starts with foundational knowledge in the base technology and ends with products or services available in the marketplace.

Iterative Synthesis: The Critical Intersection

The difficult part of this process is called iterative synthesis. This is defined as the intersection of knowledge and a recognized social need. Crucially, this point often fails to evolve into a marketable innovation.

Types of Innovation by Degree of Uniqueness

Innovation varies significantly in its degree of uniqueness. There are three primary types:

• Ordinary Innovations: The vast majority of innovations introduced in the market, characterized by little uniqueness.
• Technological Innovations (Incremental): Refer to new products featuring significant technological advancements.
• Breakthrough Innovations: Involve the development of new products resulting in enormous technological change and market impact.

Commercializing Innovation: Pathways to the Marketplace

1. The Government

The government is responsible for technological transfer: commercializing laboratory technology into new products.

Government Role: Pros, Cons, and Solutions

• Advantage: Financial resources.
• Disadvantages: Lack of business skills (market commercialization), high bureaucracy.
• Possible Solution: Entrepreneurial training and partial privatization.

2. Corporate Entrepreneurship

This refers to entrepreneurial activity occurring within an existing business structure.

Corporate Entrepreneurship: Challenges and Strategies

• Advantages: Financial resources and marketing skills.
• Disadvantages: Highly bureaucratic structure, short-term profit focus, overly rigid organization.
• Solution: Implementation of Strategic Business Units (SBUs).

3. Independent Entrepreneurship

Nowadays, this is one of the most effective ways to commercialize an innovation and navigate the entire product evolution path.

Independent Entrepreneurship: Flexibility and Funding Gaps

• Advantages: No bureaucracy, flexible organization.
• Disadvantages: Lack of financial resources, difficulty interfacing with all necessary entities.