International Encyclopedia of Public Policy and Administration - Vol. 2

By Jay M. Shafritz | Go to book overview

BIBLIOGRAPHY

42 American Jurisprudence 2d, §§ 1-41.

43 Corpus Juris Secundum, §§ 1-31. Rule 65, Federal Rules of Civil Procedure.

INNOVATION. Any creative and risk-taking process by which new ideas, values, standards, methods, procedures, technologies, or products are conceived, developed, introduced, and/or followed up for the purpose of meeting existing or future objectives or needs.

The most widely used such term is "technological innovation," which refers to the ideas and processes in the "new technologies" area. In the past, it was a field of activity mainly occupied by inventors, engineers, and scientific researchers. The industrial society, and especially the postindustrial era of the twentieth century, have dramatically changed this situation. The complexity of new manufacturing and other modern technologies based on advances in science and engineering, as well as new ideas emanating from the social sciences, required new methods and techniques of management. These technologically driven changes in the society necessarily defined new approaches for talking both private and public sector problems; thus, the process of innovation generated new responses by businesses and governments to the challenges of societal transformation.

Innovative ability is conceptual and creative, rather than technical and scientific. It is the ability to look at the organization's activities as a system and to provide missing elements that will convert the already existing elements into a new and more productive whole. The major task is the determination of what can change needs, values, and satisfactions of a customer, a client, or a user of the organization's outputs.

From the general society's point of view, innovations are predominantly economically driven. Economic growth requires purposeful, responsible, risk-taking actions of entrepreneurs and managers, actions that are innovative. The immediate generator of economic growth is investment-in new products, new processes, new resources, new serviceswhich often arises from new ideas, new knowledge, and new developments in science and technology. By emphasizing research, and by systematizing innovation, industry and government now make regular provision for the occurrence of new, innovative developments.

The roles of government and business in the innovation process are substantially different. Government is a basic promoter of technological innovations. Governments spends a great deal of money to support research and development in certain industries and areas of basic research. Private industries usually do not invest sufficiently in those areas considered vital to the nation's well being, such as education and health care; such investments are considered very risky to business, as the returns are unclear and rather distinct. This is particularly true of modern complex technologies, where the costs of research and development are very high and the payoffs are uncertain.

Government is the only institution that could fund large-scale space programs, the initial stages of computer and communication technology development such as the creation of first generation computers in the 1940s and 1950s, or the promotion of electronic networks in the 1970s and 1980s. The private sector did not fund such projects because they were too expensive and their immediate profit-making potential was not apparent. However, modern governments worldwide fund projects whose benefits are believed to contribute to society as a whole. This type of public policy is usually implemented through sets of public institutions. In the United States, these are both major departments, such as Defense, and special governmental agencies, such as NASA, the National Science Foundation, the National Institute of Health, and some others. However, among policy-level officials (both elected and appointed), the willingness and ability to free up discretionary funds to make such collective investments may be declining.

One of the basic mechanisms through which the economy and society have benefited from governmentally funded research and development is known as the "spinoff" effect. New processes and materials that were created under governmental programs aimed at the development of military and aerospace technologies have been licensed to commercial and nonprofit firms and have become available for civilian purposes. Businesses use them to design and market innovative products and services for both industrial and consumer needs. Governmental agencies frequently support special programs for technology transfer (i.e., disseminating spin-off technologies), thus providing preferable conditions for their use in private sector innovations. In the United States, there is legislation institutionalizing technology transfer in several agencies. On the federal level, there are at least two dozen such programs and at least five laws since 1979 have promoted technology transfer, particularly to small businesses and nonprofit corporations.

Another important function of the government in promoting technological innovations in the society is the implementation of public policy that sets up special incentives for businesses to adapt new technologies and develop new products. Examples of such mechanisms are tax credits and rates of depreciation. Companies that expand or modernize, investing in new plants and equipment, are given a tax credit. Special depreciation schedules allow businesses to write off their production facilities over a shortened period of time, thereby reducing their tax bills to the government and ultimately making more capital available to invest in new technologies.

A predominant role for the private sector is dissemination of technological innovations in the society. Through commercialization, innovations enter industrial

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International Encyclopedia of Public Policy and Administration - Vol. 2
Table of contents

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