engleski

Innovation in transition countries: how to catch up?

Innovations are a core competence today (Loewe, Dominiquini, 2006). Dobni (2006) found more then a thousand recent books and articles on innovation that show a recent positive trend in this field of research. There are breakthrough innovations, and there are incremental innovations. There are innovative new products and innovative new technology. According to Hamel (2006) technology and product innovation tend to deliver small-caliber advantages, unlike management innovations that create long lasting advantage. McKinsey (2005) urges that Asia is no longer a competitor based on low-cost labor rather that it is fast becoming a source of competitive advantage based on management innovation. Reichstein and Salter (2006) on the contrary, consider that no innovation is possible without an accompanying process innovation. A crucial question is how to foster innovation, and what specific innovation strategy to pursue. It is an important question even for developed countries and it is even more important for small countries like Croatia, still looking for its sustainable strategy. In this work we present a portion of results obtained on the Croatian sample. This whole research project called European Manufacturing Survey is conducted in most European countries and led by Fraunhofer Institute from Karlsruhe, Germany. The survey instrument is developed by Fraunhofer Institute and is conducted in parallel by all participating countries in order to facilitate cross-country comparisons. In this work we only consider questions addressing innovation and try to find in which way should Croatian companies seek and foster innovation given the fact that Croatia highly lack investment resources. Questions we address are divided into four groups which will later become latent variables. First variable is a construct from thirteen questions on process innovation ; second variable is constructed from thirteen questions addressing management innovations ; new product variable is constructed from five questions addressing new product launch and development and finally the fourth latent variable are results measured by four questions on financial results, namely, R&D investments, exports, return on sales, share of overhead costs in total costs. Our primary hypothesis is that Croatia should pursue management innovations by educating their managers, because that raises the probability of a management innovation. It seems that of all three types of innovation this one might be cheapest and yet bring better benefits. So we constructed a model with these three variables – process innovations, management innovation and new product. With structural equation modeling we investigated the impact these variables have on the result variable. This paper focuses on the whole innovation process rather than on only one aspect of innovation activity like the most explored and most attractive product innovations. Secondly, the paper explores Croatian context, for which previous researches in this domain are nonexistent. Finally, this work will be the base for cross-country comparisons. Preliminary results show that Croatian companies do not have resources for radical innovation. New products (products new to the market) are launched but not for growth but for mare survival. And these new product launches are mostly in low innovation sector defined by Cozzarin (2006, p. 10). Croatian companies concentrate on incremental innovation, depend on leading technological providers for process innovation, and are starting to cooperate with universities on management innovations. Unfortunately, benefits from management innovations are not as high as expected.

manufacturing companies ; innovations ; Croatia

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