Innovation as an important element of creating a competitive advantage for modern enterprises

Abstract

Innovation has always been the subject of research by many scientists in different countries. Innovations are influenced by the external and internal environment of enterprises operation. In the countries with transition economies and underdeveloped ones, innovations are the engine of gross domestic product development and growth. Business environment is changing rapidly, so creating a competitive advantage based on innovations provides businesses with better market position, gives chances and opportunities to form a strategy for survival and development. The enterprise innovations are influenced by the potential of its development, material resources and, perhaps, the most important is the capital in the form of creative workers. Human capital, its structure and its impact on economic development and innovation are underinvestigated. Today's transient and changing market requires from businesses, small and large companies their constant adaptation to new conditions and fast response to changes. In order to meet the market requirements, companies should significantly increase the efficiency of their activities and introduce new, innovative services and products, as innovation is an important factor determining the competitiveness level. This fact requires significant own financial resources and borrowed funds. Therefore, the way of managing the enterprise human resources and human capital, undoubtedly, has significant influence on the innovation level. The introduction of innovations makes it possible for companies to achieve significant competitive advantage in the market and is an important factor in their development and successful operation. In this paper, the authors describe some theoretical conditions for doing business and substantiate the importance of innovation as a factor determining the competitiveness level in the 21st century. Considerable attention is paid to the sources of innovation, types of innovation, the importance of creativity in innovation, innovation as a factor in enterprise development, company strategy, innovation as a tool for competitive advantage creation, national innovation policy and enterprise competitiveness.