Innovation as a Leader in Economic Development and What Is Needed to be Successful

Innovation is commonly defined as the “carrying out of new combinations” that include “the introduction of new goods, … new methods of production, … the opening of new markets, … the conquest of new sources of supply … and the carrying out of a new organization of any industry”. (Wikipedia). So, when innovative ideas are implemented, they can change the markets and the economy of the countries in which they take part.

by Thanos S. Chonthrogiannis

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There is therefore a common field of action that young scientists and entrepreneurs of a country meet, both strongly motivated by discrimination through the application of their ideas.

The main driver of further development is the funds available and more generally the funding available to support the development of innovative efforts. In developed countries it is common before the success of the final objective of an innovative effort not to allow further funding, so that these innovations are sold to others, who have more effective mechanisms for their development.

To create a framework in developing economies in which innovative ideas systematically become commercial successes, it is necessary to:

A. These innovative ideas have a global

B. To support them throughout their development, people of the highest innovative-scientific level.

C. To provide the holders of innovative ideas-efforts with strong personal motivations.

D. There should be ample funds for the continued financing of the projects at each stage of their development.

The higher the degree of innovative approach an innovative idea presents, the greater value and recognition the market attaches to it. Let us look at two typical examples:

1. TeslaMotors(Tesla) produces about five hundred thousand (500,000) electric cars a year and its stock market value reaches $692bn. Higher than the stock market value of the world’s eighth largest automakers.

2. QuantumScape, which produces solid state lithium-ion batteries for electric cars, which they have a large capacity and with its stock market value reaching $19,3bn when America’s automotive symbol Ford has a stock market value of $34bn.

The characteristic of QuantumScape is that innovation in its production continues and feeds it with constantly innovative ideas a galaxy of universities, research centers and other types of companies that aim to continuously achieve the completion and continuous upgrading of the new approach expressed by this company.

The coherent link that marries commercial innovation with continuous research allowing this galaxy of production of theoretical and empirical knowledge to materialize, is the continuous funding that venture capitals can provide.

How to achieve this link

To develop and make innovation strong in an economy, the three main factors that make it successful must be fully connected and organised with other support organisations/enterprises with clear guidelines. These three main factors are:

1. The basic/initial and unstoppable Research & Development.

2. The implemented Development

3. The financing

How a State Creates and Sustains Innovative Development

A strong pillar of innovative development requiring continuous supply of innovative ideas/products are the defence industry sectors, autonomous/electric driving, communications, robotics, green energy production, agricultural production, tourism, etc.

All these above-mentioned industrial sectors must be for a State sectors of focus-focal points of the economy, which will also be the main pipelines through which innovative ideas will move towards the market with the main aim of over-covering existing competition with the aim of recognition at both national and global level.

Through these focal points of the economy, a State succeeds in channeling the necessary funds on a regular basis. This is the first of three necessary strands to make innovation a success in a country.

The second part of this effort is that companies that are active in business on innovative ideas. This is called ambition-motivation, but it should always aspire to gain the size of a global presence.

Since the first two parts are superlative, the third and final part is the whole effort to be financially supported by both the public and private sectors, respectively.

This third required strand is achieved when the government of a State incentivizes and co-finances in these two directions (second and third parts respectively).

How governments incentivise and co-finance innovation

The way in which this is achieved by a government is by simultaneously, among other things, systematically supporting R&D funds in universities, research centres and start-ups.

The goal of the government with the above financial actions should be to continuously feed all the specific processes with new innovative ideas.

Once this objective is achieved, the necessary link is created that unites the pillars of innovative effort by steadily creating the required volume of new possibilities each time that will act as a magnet for the participation of ever larger venture capitals that will finance the transition from innovative idea to commercial success.

What we would recommend to developing countries is that to make innovation a successful driver of the economy and a major pillar of national competitiveness requires experience that can be adopted by other developed countries accompanied by coordination of universities, research centres and enterprises together with funding.

That is why we would suggest the creation of an independent authority, in the standards of the US Office of Science and Technology, to enhance the effectiveness of what we have just said.

Only with such realistic policies will innovation and its development become self-directed and self-enhanced with clear objectives, enhancing the country’s competitive advantage, with the aim of creating innovative global champions.


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