Innovation and patents as a business success factor.
| Autor | Hernandez, Youseline Garavito |
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Introduction
Generally, the concept of business success is associated with the positive analysis of an organization when it demonstrates growth through financial and management indicators, results of efficient management of production processes and the adequate use of resources as market opportunities. From this perspective, Darroch (2005) and Chittithaworn et al. (2011) express that the development of new products that meet customer needs and expectations is an essential strategy to achieve corporate success as it guarantees the company's permanence in its commercial environment with the generation of greater benefits associated with sales, profits and profitability.
Although these results are a direct consequence of the management model and human resource competencies, innovation in products, goods or services is a factor that potentiates this good performance in companies, given their conditions, growth needs and market positioning
(Loan, 2018). This is why innovation is currently considered as a variable that boosts organizational performance and contributes to success as it positively influences financial results while creating competitive advantages (Damanpour and Gopalakrishnan, 2001; Galvez and García, 2012).
In this regard, Artz et al. (2010) state that innovating and registering product patents is a key factor for business success. This is because it shortens the periods of long and mediumterm investment recovery while increasing the value of intangible assets such as Goodwill. Therefore, betting on innovation and patents allows for a better market positioning and attracts investors, who are motivated by more stable benefits to their investments given the greater probabilities of obtaining profits with more attractive products that boost sales and brand positioning.
In this sense, the present study analyses business success from the annual sales revenue variable results, considering that it is an explanatory element of this phenomenon based on the postulates of the theory of industrial organization and the theory of Resources and Capabilities (Mascarenhas et al, 2002; Huerta et al, 2004; Zawislak et al, 2017). Consequently, based on the annual sales revenue database of 1746 Colombian manufacturing companies supplied by the National Administrative Department of Statistics (DANE), a correlational statistical analysis as well as a binary logistic regression analysis was carried out to establish the three possible contributions exerted by the development of product innovation and the registration of patents on business success sales.
It is appropriate to highlight that the relevance of this research is established based on the fact that, in Colombia, there are still very few studies that provide an in-depth analysis on this topic (Galvez and García, 2012; Sanchez et al, 2007; Velasquez et al, 2018), although companies are making greater investments in science, technology and innovation (CT+I) as a fundamental part of their competitive strategy. Therefore, to be able to contribute with new arguments of discussion in the academic and business field in the subject of innovation and registration of patents represents a contribution that promotes the successful management of organizations and their sustainability.
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Theoretical framework and work hypotheses
2.1 Importance of innovation in the business context
Understanding innovation as a key factor that drives both business competitiveness and the sustained economic growth of a nation (Lederman et al, 2014), helped King and Anderson (2002) determine that its main importance is centralized in being a dynamic strategy that significantly increases the productive conditions of any organization while at the same time increasing the competitive level as well as providing a wealth-generating factor along with new knowledge appropriation. Based on this, Crespi and Zúñiga (2012) and Schot and Steinmueller (2018) point out that by increasing productivity and organizational competitiveness based on innovation, not only economic benefits can be achieved, but also generates an integrating effect that encourages the implementation of technological and procedural changes that allow for more beneficial and effective use of corporate resources and the development of new business capabilities.
Based on the theory of the advantage of resources and capacities (Penrose, 1958), the concept of innovation has become an essential element that contributes to building the value chain and consequently competitive advantages in the market that represent better performances for organizations, particularly in companies that are located in countries with emerging economies (Nason and Wiklund, 2018; Ho et al, 2019). Therefore, Orji and Liu (2020) support that those companies that adopt innovation as a driving force that contributes to improving the sustainability of the supply chain, have significantly improved their potential to retain and generate customers in periods of medium and long-term, citing as an example the processes developed by electronic goods companies in China.
For this, innovation currently becomes a variable that provides better economic and social development conditions for a nation given that it causes an integrating effect among organizations, productive sectors and government, which in turn, generates business competitiveness and wealth creation, a fact that represents a valuable opportunity for developing countries to create differentiation and targeting factors for their products/services within international markets (Geroski et al, 1993). To illustrate the above, the importance of innovation can be shown by what is indicated by the OECD (2010), which stated that in the USA about 85% of companies that belong to sectors where there is a strong focus on innovation and technological development manage to remain in the market after ten years of operation, while in companies that maintain conventional technologies or do not set innovation as a strategic axis of their business, around 80% of them disappear before the first three years of existence.
In other words, innovation is one of the great organizational challenges of the 21st century given the high levels of competitiveness that promote the globalization of markets, a situation that imposes the permanent development of new products or services with quality and satisfaction for customers in mind, while sustained wealth is generated for sales, guaranteeing the welfare of the company and all its stakeholders (Rueda and Rueda, 2017). This is why strategies like the one outlined by Bouncken et al. (2018), pointing out that cooperation between competitors is an effective way to generate product innovation, demonstrating that greater benefits are built through a shared irrigation system that minimizes the level of impact, proving that this type of unions is more advantageous to carry out through incremental innovation for the design and pre-launch phase, while radical innovation for the product launch.
In the Latin American environment, Ávila et al. (2019) also demonstrate that there is a strong causal relationship between business innovation and the per capita economic growth of each country in the long term (study between 1996 and 2015), a fact that is consistent with the analyses of Maradana et al. (2017) carried out in European countries, where it is also evident that innovation promotes the economic growth of the nations under study. For Mendoza (2017), studies that were done in Mexico also show that there is a positive convergence between the innovative activity of companies and the economic diversification of the regions as a result of the diffusion of technology, which promotes the generation of better income for the population and new jobs.
In Colombia, the deficit in terms of technological innovation such as the hiring of human capital with scientific training is still an incomplete task, as evidenced by the studies carried out by Sanchez et al. (2007) and Velasquez et al. (2018) that show the low investment that is destined to develop innovative processes, a fact that makes it impossible to reduce the technological gap when compared to other countries. Although large Colombian and multinational companies are the organizations that present the greatest advances in the field of innovation, much of their results are not a fruit of their own business activities in research and development (R&D), they are, although, the product of the technological adoption or purchase of patents developed abroad, a phenomenon that is similar in countries of the region, where there is a low budgetary commitment in this aspect, such as the scarce job opportunities for hiring personnel PhD or scientific profile.
Thus, in the case of Colombia, it is evidenced by an investment that is 21 times lower than Amazon Corp and does not exceed 0.67% of the gross domestic product (GDP), of which only 35% are contributions made by the private sector (Bustamante, 2018). It should be considered that the innovative property is associated with the intellectual property variable, which includes elements such as copyright, domain name, trademark registrations, indications of origin, test data and patent registration, the latter being an important factor for the quantitative measurement of the scientific and technological progress of the organization, region or country (Lederman et al, 2014). Although in Colombia the patent registration has had a positive trend in the past four decades and has increased fivefold between 2005 and 2012 (SciDev, 2017), the levels reached today are not the most adequate in comparison with the indexes of countries as Brazil, Mexico and Argentina, in which the development of new products increases by 30% (Sanchez et al, 2007;Naranjoetal., 2018).
For this reason, Juliao-Rossi et al. (2019) through their empirical evidence demonstrate that companies, by carrying out radical or incremental innovation, gain...
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