Innovation as a way out of the crisis? Challenges for the CEO
Companies conducting R&D activities in Poland are not among the world’s leading innovators. According to a survey carried out for Ayming by Opinia24, in 2019 only 60% of them developed a new product and one in five developed a new service. 38% of respondents did not use any form of intellectual property protection. The main challenges faced by managers in companies developing innovations include e.g. obtaining external financing, developing an innovation strategy and developing an innovative culture – according to the report by Ayming Poland “The Road to Innovation and COVID-19. Challenges for the CEO”.
Challenge: financing innovation
The Ayming report states that 93% of respondents finance innovation on the basis of their own resources. More than half of the surveyed companies have a separate budget for R&D activities. Interestingly, it is sufficiently large for 70% of them. As far as forms of external financing are concerned, entrepreneurs in Poland mainly use EU subsidies – in 2019, 40% of companies applied for them. Tax relief for research and development was used by 21% of the respondents, while loans and credits by 23%.
– It is also important to obtain funding for the implementation of the already developed innovations. The most common way is to sell research results or to grant licences. Another option is to reach business partners who will be interested in the developed solution. The third way to commercialise an idea is to incorporate the developed solutions in the company’s production activities. This is usually the most cost-intensive way of implementation, but may prove to be the most profitable. Entrepreneurs can take advantage of financial support under the R&D relief and – depending on availability – also from EU subsidies – explains Marek Dalka, Manager of the Innovation, Relief and Subsidies Department at Ayming Poland.
Challenge: innovation strategy
Merely 27% of companies confirmed having an innovation strategy and 34% are in the process of preparing it. One in three companies is of the opinion that they do not need such a document at all. The authors of innovation strategies are usually the Management Boards (85%), R&D Departments (52%) and Financial Departments (30%). One in four companies is supported by external entities. A developed strategy does not only serve as guidance in business. Enterprises that have implemented it make more conscious use of available external instruments for financing innovation. Almost half of the entities with a strategy finance their R&D activities with the support of national subsidies, while 38% settle the R&D relief.
Challenge: creating the culture of innovation
An organisation which displays the characteristics of an innovative culture undertakes and develops innovative activities to a greater extent. These characteristics include e.g. openness, mutual trust, partnership, eagerness to acquire new knowledge and encouraging people to take initiative. 73% of companies surveyed by Ayming promote innovative attitudes among their employees. For more than half of the respondents, it took the form of financial reward, while for every fifth of them, the superiors used praise as motivation.
– It is very important to accept mistakes and failures. If the CEO does not openly communicate this message, those responsible for developing innovation will not propose their own ideas or carry out tasks involving any risk. The less hierarchical an organisation and the greater freedom of action and the possibility to work in interdisciplinary teams, the higher the chances for the flow of knowledge, generation of ideas and success of undertaken initiatives – comments Magdalena Burzyńska, Managing Director at Ayming Poland.
Read more in the report “The Road to Innovation and COVID-19. Challenges for the CEO”: bit.ly/innowacjeCOVID
Authors:
Magdalena Burzyńska. Managing Director, Ayming Poland
Marek Dalka, Manager of the Innovation, Relief and Subsidies Department, Ayming Poland
Last Updated on October 30, 2020 by Łukasz