THE IMPACT OF INNOVATION ON BUSINESS PERFORMANCE
Keywords:
innovation, business performance, changesAbstract
The modern business environment is characterized by constant changes, dynamic turbulence and continuous competition. The increasing pace of globalization, changing customer requirements, increasing competitiveness and rapid technological progress create an environment in which a sustainable competitive advantage is difficult to achieve and maintain, therefore, it is necessary for all organizations to adapt to this pace. The needs and expectations of customers, who are saturated with a rich offer of products and services, are constantly evolving and the delivery of improved products and services is necessary in response to market needs. The ability of an organization to respond to pressures and changes in the market is a crucial success factor in such environments. Therefore, an important driver of competitiveness and success of organizations is the ability to innovate. Most organizations have implemented innovation capability as the main strategy for successfully responding to market needs and business environment oscillations. Organizations with high innovation capacity are dealing with market changes and responses to them in new ways and are able to take advantage of rapidly changing market demands. They support new ideas, change, encourage risk-taking and encourage new business approaches, and as a result, innovation contributes to increased business performance. An innovative organization strives to be more flexible and adapt more easily to the business environment, thus taking advantage of opportunities better than competitors. Consequently, innovation has become a key issue for many modern organizations, while its importance has motivated many researchers around the world to identify its driving forces.
Organizational innovation performance includes product innovation performance and process innovation performance. Product innovation and process innovation have a positive effect on enterprise performance. These two innovation dimensions can benefit the company in improving its competitive position vis-à-vis competitors as well as market profitability. Innovation activities play a significant role in creating value for new and existing SMEs. Innovation affects business performance, but that does not mean that every innovation has a positive impact on performance. New scientific knowledge is necessary for the development of the organization in modern business conditions, and innovation and scientific research by competent researchers are essential in order to acquire new scientific knowledge, which can be applied in practice. The aim of this paper is to point out the importance of innovations in modern business conditions and their impact on the business performance of the organization.
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