THE MODEL OF MODERN INNOVATION INFLUENCE TO COMPETITIVENESS AT RECESSION

Abstract

The article deals with influence of modern innovations on enterprises competitiveness. The different concepts of competition, from D. Ricardo and H. Adams up to M. Porter and Kim Chan and R. Mouborgne are analysed. The results of comparative analysis are provided in table 1. Different models of competition and competitiveness are analyzed. There is stressed that very important role plays M. Porters‘ 5 market forces, Diamod and Dubble diamond models and latest modifications made in the model. Some drawbacks of competitiveness models from K. Lancaster up to A. Rugman and latest authors as well as the author are submitted in table 2. The weakness of the Diamond model discovered and modification of Diamond model is made by incorporating the innovation in the model as it is proposed in picture 1.
The importance of innovations for competition of enterprises is disclosed. The definitions of innovation and competitiveness of different authors are submitted. Innovation as risky process in competition from J. Shumpeterian economic view to innovation up to P. Drucker and McMeekin and D. Soutterton commercionalization as well as EU innovation policy are analyzed. Short analysis of Lithuania’s position in the EU economy on innovation is made.
The G. Brennan’s optimistic idea on innovations at recession period that innovation could be a chance for companies to leapfrog their competition is stressed. Some data from Fray’s analysis demonstrating the idea mentioned are provided in the article. According to Ch. Frey, founder and editor of Innovation tools, innovation climate has improved in 47,5 % of companies, and only for 25,9 % of respondents – has worsened at recession. But because the customers even at recession tend to the innovative, reasonably priced and hyped-up products and because the markets at recession are tightened, it is good time to invest in research and renew the products, processes, structure and management as main elements of competitiveness, as it has been recommended by Lisbon strategy. The impact of main areas of innovation on competition criteria (goals) is shown in picture 2 and impact of main elements of management improvement is shown in picture 3. Thus model of interaction between main innovation management factors shows direct and indirect influence of innovation on reengineering, competitiveness and employees satisfaction.
The importance of innovative enterprises of Lithuania for the competitiveness of Lithuanian economy is stressed. It well demonstrates analysis of activity of innovative enterprises a UAB “Five Continents”, UAB “ Alna”, UAB “Information Technologies Centre”. But main point in the article is methodology for construction the model of direct and indirect influence of segregated elements of innovation management on segregated criteria of organizational competitiveness. The main suggestion is to enhance the activity of organizations at recession by improving strategies mainly by restructuring, training the personnel and management.