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What is innovation?

Having ideas is easy, having good ideas is more complicated, but what is really a strategic challenge for companies is to continuously generate good ideas and turn them into commercially successful products or services in the market. This is what is known as product or service innovation. But innovation is also achieved by changing the way things are done within the company, redefining or incorporating new management and/or communication processes. 

The Oslo Manual (OECD, 2005), a bibliographical reference on innovation, defines the following four types of innovation: 

  • Innovation in product/serviceIntroduction to the market of new (or significantly improved) products or services. It includes significant alterations in technical specifications, components, materials, the incorporation of software or other functional characteristics. 
  • Innovation in processImplementation of new (or significantly improved) manufacturing, logistics or distribution processes. 
  • InnovationorganisationalImplementation of new organisational methods in the business (knowledge management, training, human resources evaluation and development, value chain management, business re-engineering, quality system management, etc.), in work organisation and/or in external relations. 
  • Innovation of marketingImplementation of new marketing methods, including significant improvements in the purely aesthetic design of a product or packaging, pricing, distribution and promotion. 
INNOVATION IN COMPANIES 

All companies innovate in one way or another, as their competitiveness and continuity depend on it. However, few companies are aware that they do so. There are various situations in which companies are aware that they innovate but do not have control over it, i.e. they generally undertake innovation on an ad hoc basis or, if it is habitual, driven by customer or market demands without anticipating these demands. Innovation, like all business processes, can be managed and controlled and it is this control that helps to maximise the results of the resources invested. 

IMPORTANCE OF INNOVATION PROJECTS 

The innovation leverages resources for greater economic, social and/or reputational benefits. It is therefore essential to be at the forefront of needs and trends, as well as to use tools to optimise processes, offer new products or services and position oneself strategically in the market. 

Business innovation is not a fad or an option for companies, but a real necessity in a society that is advancing at a giant leap and needs companies that advance at least at the same speed. Among the most important reasons for undertaking an innovation process are: 

  • Customer focus. Companies that are committed to innovation are characterised by offering the market, on a more or less continuous basis, new products or services in order to satisfy the changing needs and expectations of their customers. To do this, it is essential to continually look at the market to find out exactly what is in demand. In addition, listening to your customers will make them feel considered, which will further improve your positioning. 
  • Another important perspective on innovation is its ability to become a real source of business cost savings. Innovation in company processes can significantly improve their efficiency, allowing for the optimisation of the resources used. These savings can be important for improving profitability levels, and can even be the key to designing more competitive pricing strategies. 
  • Differentiation. When the range of products and services on offer is as wide as it is today, it is necessary for companies to differentiate themselves from the competition by bringing something different to the market, not only at the supply level, but also in other areas such as marketing, communication, etc. 
  • Contribution of innovation to the talent retention. Generally speaking, staff motivation tends to be higher in innovative companies, so that the feeling of belonging is also improved. 
  • Supervival on the marketIf a company does not innovate in order to continuously evolve, it is doomed to failure, as it will lose its level of competitiveness to other companies that do innovate. 
PUBLIC FUNDING OF INNOVATION PROJECTS 

Public administrations are aware of the effort that innovation management entails for companies, as well as its importance for their competitiveness and, therefore, for the development and growth of the territory in which they carry out their economic activity. This is why they set aside funds to implement programmes to support these activities, thus encouraging organisations to undertake this type of initiative.  

There are various funding schemes developed by regional, national and European administrations, responding to the priorities of each of these bodies. Any company that meets the particular conditions of each programme (usually related to size and sector of activity) can submit a proposal and benefit from these grants, which usually take the form of non-repayable grants, low-interest loans with a non-repayable tranche or access to facilitating tools.  

In La Rioja, subsidies are announced and administered by the Economic Development Agency of La Rioja (ADER), which offers various financing instruments depending on the degree of maturity of the project and the specific needs of the companies. For example, one of the aids are Cheques for external consultancy of R&D&I projects

At national level, the reference body is the Centre for the Development of Industrial Technology (CDTI), which promotes the innovation and technological development of Spanish companies, channelling applications for funding and support for Spanish companies' R&D&I projects at national and international level. 

At the European level, there are different funding programmesThese include the framework programmes, multiannual instruments that are divided into different thematic areas depending on the European Commission's priorities for each period. These programmes contain a wide variety of instruments, the main objective of which is transnational collaboration and access to the European single market.

 

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