Answer

Barriers to Innovations

The development of new products has been one of the strategic options that companies utilize to increase sales volume in a competitive environment. The development and exploitation of ideas while embracing technological transformation is a modern concept that is applied in strategic marketing. However, barriers to innovation have presented a big challenge to most companies wishing to innovate their products. Innovation involves the employment of out-of-box thinking and techniques to generate new or additional value and is driven solely to make significant changes to attract customers. The following articles discuss issues that contribute to barriers that present a challenge to innovation.

a). Rivas, R. and Gobeli, D.H. (2005) Accelerating Innovation at Hewlett Packard

The article above evaluates the enablers and barriers that affect the HP’s Technology Development Operations that is for the development of micro-machining, semiconductor and other products that are competitive in the market. The leading enablers at HP are its highly trained and skilled staff, management support, utilization of checkpoints in provision of focus, teamwork and cooperation. The barriers present a different challenge as they different and evolve on the basis of the market and technology newness.

The top barriers in HP are inadequate resources, experiments that are hard to process in factory’s premises, lack of enough processing capable equipment, multi-site project and undefined market planning. The major lessons from the case study presented in the article are that for acceleration of innovation to be accelerated then information must be freely distributed in the company, teams must be carefully created and the roles of each team member must be clearly defined.

b). Brackertz, N., and Moran, M. (2017) Barriers to Innovation and Investment in the Social Economy: Retrofitting for Environmental Sustainability in Australian Community Housing, Third Sector Review, Vol.16, No. 2

Accessing seed finance and the development of skills required in utilizing the available opportunities in the social market is still an uphill task in Australia. Intermediaries serve act as conduits in the organization of social economy and social investors. Community development financial institutions (CDFI) are not active in Australia largely due to lack of funding but they are very active in countries like the US and UK.

The article holds the opinion that rhetoric is arguably ahead of practice as the effort that is being made to promote social economy organization does not much the resources that are being channeled to the sector. The Australian community housing has been compelled to come up with innovative processes that would allow entrepreneurs to develop new models or processes in the housing market that allow less dependency on grants and which may be competitive enough to attract debt or equity financing

c). Ionescu, A. and Dumitru, N.R. (2015) The Role of Innovation in Creating the Company’s Competitive Advantage, Ecoforum, Vol. 4, Issue 1 (6)

Innovation is the foundation of profitability, value and growth. The most innovative companies are also apparently the most successful. The major success combined the best of Innovation, human capital and Informational society. The article confirms that development of new products requires large capital outlays. The new products do not necessarily translate into profits as some products are quickly bypassed in the market and may be rendered as obsolete in the market by other superior brands that have been remodeled.

This kind of risks makes most manufacturers to be wary of spending a lot of funds in research and development expenditure as the recovery of the research and development costs or profitability of their innovations is not guaranteed. But the greatest barriers to innovation as well as the effectiveness of government subsidies is that where government subsidies are available some projects that would not have been undertaken would effectively be carried out. Majority of projects fail considerably resulting in losses that the government incurs.

d). Gonzalez, X., Jaumandreu, J. and Pazo, C. (2005) Barriers to Innovation and Subsidy Effectiveness, Rand Journal of Economics, Vol.36, No.4, pg. 930 – 950

The article describes data obtained from the research of innovation operations, subsidies, R & D operations and the application of the research material on the role of subsidies. The range of subsidies available to companies is largely awarded as per the proportion and size of the company. Financing is one of the greatest barriers to innovation.

Governments are boosting efforts to encourage innovation by providing financing in form of government subsidies. Firms embrace R & D much more when subsidies are expected to compensate some processes that may not be successful due to some reasons not earlier foreseen. The calculation of the profitability gaps has been determined by taking the difference between the non-zero efforts and the threshold effort in the absence of subsidies (Gonzalez, Jaumandreu and Pazo, 2005). 

Subsidies motivate firms to invest. Large corporations can be encouraged to invest by subsidizing 10% of their R & D research expenses. The article confirms that subsidies however little contribute favorably to R & D research activities

1. e) Blumentritt, T. and Wade, M. D. (2006) Business Strategy Types and Innovative Practices, Journal of Managerial Issues, Vol. XVIII, No. 2, summer.

Despite efforts to increase investment in innovation and R & D, more still needs to be done. The inertia that firms resort to when adopting new or unfamiliar technology has discouraged the growth of innovation in most firms.  Successful product development requires perspectives and experience gained from observation and direct participation in business domains. The ideas and pressures behind innovation stem from environmental sources like new technologies, customers’ requests or other competitive factors that affect the sales volumes.

The greatest barrier however is rigidity in product management and bureaucratic inertia in a firm’s management that limits learning capacity and creativity to existing innovations hence prevents trials to other unfamiliar technologies (Blumentritt and Wade, 2006). Despite barriers to product development and innovation about 50% of most companies that were funded by the US government since the year 1982 were successful. Some firms are very efficient in new product development while others excel in delivering products that are affordable and less costly.  

1. f) Link, A.N. and Scott, J.T. (2005) The Small Business Innovation Research Program, Real

The article outlines the role of innovation in the world today and compares the top companies that have adopted innovation as a marketing strategy while ranking the countries using the rate and impact of innovation in the growth processes. The major barriers to innovation processes are the high cost of research and development.

The Small Business Innovation Development Act was enacted in the year 1982 with the sole purpose of promoting research and development programs in small business under the banner Small business innovation research. The research that was carried out later to evaluate the impact of the exercise it was discovered that most firms were willing to engage in research and development if the government was willing to subsidized some of the costs. It was noted that most firms stopped the projects when the funds were no longer forthcoming or delayed. The funding exercise by the US government uncovered a lot of potential that could have otherwise gone to waste (Link and Scott, 2005).

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Summary and Analysis of the Six Articles Outlined Below

Ionescu and Dumitru (2015) confirm that knowledge economy places innovation at the heart of new scientific breakthroughs that have propelled the digital age to its current unimaginable achievements. The most advanced economies in the world today funded some projects that led to the innovative discoveries that now act as the engine of economic growth to most of their economies. At the center of all this discoveries however are the barriers to innovation that threaten to wipe out all the gains made in the development of new products and ideas that control the global economy today.

The article by Rivas and Gobeli outlines the role of innovation in the world today and compares the top companies that have adopted innovation as a marketing strategy while ranking the countries using the rate and impact of innovation in the growth processes. Innovation is a key component in Hewlett Packard marketing strategy. Understanding and managing environments that promote optimal innovation is a primary concern for the company that excels on innovations. New product development in the world today is largely tied to technological changes that are shaped by rhythm acceleration in innovation and which are characterized by changes that are personalized to consumer’s tastes. The requirements that products’ must have favorable prices and be of high quality speak volumes on the need for efficient systems in research and development.  The need to integrate better technology into existing systems while incurring minimum cost and down time is now a necessity.  

The research that was carried out later by Link and Scott (2005) to evaluate the impact of innovation funding by US government discovered that most firms were willing to engage in research and development if the government was willing to subsidize some of the costs. It was noted that most firms stopped the projects when the funds were no longer forthcoming or delayed. The funding exercise by the US government uncovered a lot of potential that could have otherwise gone to waste. Rivas and Gobeli (2005) discovered that the top barriers to innovation in HP are inadequate resources, experiments that are hard to process in factory’s premises, lack of enough processing capable equipment, multi-site project and undefined market planning. The article evaluates the enablers and barriers that affect the HP’s Technology Development Operations that is responsible for the development of micro-machining, semiconductor and other products that are competitive in the market (Rivas and Gobeli, 2005).

 However another research that was carried out later by Link and Scott (2005) to evaluate the impact of innovation funding by US government discovered that most firms were willing to engage in research and development if the government was willing to subsidize some of the costs. It was noted that most firms stopped the projects when the funds were no longer forthcoming or delayed. The funding exercise by the US government uncovered a lot of potential that could have otherwise gone to waste. But the major barriers that weigh down the development of new products in most companies in the market are related to human capital and lack of adequate resources.  Shortage of resources, lack of essential equipment, undefined market planning and a friendly environment are some of the factors that also discourage innovation. On the other hand Ionescu and Dumitru (2015) confirmed that development of new products requires large capital outlays. The new products do not necessarily translate into profits as some products are quickly bypassed in the market and may be rendered as obsolete in the market by other superior brands that have been remodeled. This kind of risks makes most manufacturers to be wary of spending a lot of funds in research and development expenditure as the recovery of the research and development costs or profitability of their innovations is not guaranteed. But the greatest barriers to innovation as well as the effectiveness of government subsidies is that where government subsidies are available some projects that would not have been undertaken would effectively be carried out. Majority of projects fail considerably resulting in losses that the government incurs. The difference between the two articles is based on the sources of the challenges. Ionescu and Dumitru (2015) associates the barriers to innovation as originating from external sources that is lack of funding whereas Rivas and Gobeli (2005) approach relates the challenges to internal company issues.

According to Brackertz and Moran (2017) some companies have incurred heavy costs in research and development some of which have been forced to conclude their research projects prematurely due to risks of obsolescence losing a lot resources and time in the process. The Australian community housing was compelled to come up with innovative processes that would allow entrepreneurs to develop new models or processes in the housing market that allow less dependency on grants and which are also competitive enough to attract debt or equity financing (Brackertz and Moran, 2017). In their article Brackertz and Moran (2017) illustrated in a case study that the diverse issues that affect the low-income tenants and the factors that add value to their dwellings have their sources is lack of appropriate financing. Reduced energy costs, solar hot water, draught-proofing, insulation, water tanks and greater energy efficiency are some of the factors that may add value to their premises. The major drawback is accessibility to capital while the social investment appears to stumble on impediments in Australian social economy. Large scale Australian service providers ranging from education and health compete for capital in the private sector just like the private social investment enterprises. Accessing seed finance and the development of skills required in utilizing the available opportunities in the social market is still an uphill task in Australia.

Intermediaries serve act as conduits in the organization of social economy and social investors. Community development financial institutions (CDFI) are not active in Australia largely due to lack of funding but they are very active in countries like the US and UK. Gonzalez, Jaumandreu and Pazo (2005) conclude that subsidies however little contribute favorably to R & D research activities. Governments are boosting efforts to encourage innovation. Firms embrace R & D much more when subsidies are expected to compensate some processes that may not be successful due to some reasons not earlier foreseen. Blumentritt and Wade (2006) have elaborated extensively the different attributes between firms that are more innovative and the ones that are not. Despite barriers to product development and innovation about 50% of most companies that were funded by the US government since the year 1982 were successful. Some firms are very efficient in new product development while others excel in delivering products that are affordable and less costly. The resource based strategy utilizes distinctive features in old or new products to rebrand and market the products. Innovation when optimized result in sustainable advantage against competitors. In most organizations however, the understanding of innovative processes remain relatively undeveloped (Blumentritt and Wade, 2006). 

The most challenging negative influence to innovation however is rigidity in product management and bureaucratic inertia in a firm’s management that limits learning capacity and creativity to existing innovations hence prevents trials to other unfamiliar technologies (Blumentritt and Wade, 2006).  Despite the Small Business Innovation Development Act that was enacted in the year 1982 with the sole purpose of promoting research and development programs in small business under the banner Small business innovation research, R & D financing is still the major barrier to most companies as it limits the level of innovation and entrepreneurial activities (Link and Scott, 2012).  Skilled and dedicated manpower is also a major contributing factor in successful new product development or innovation. However, selection and motivation of staff is still a challenge. High employee turnover and demand for high compensation and benefits is a major challenge to innovation.