How to build an effective system of activating the innovativeness of business entities financed with the use of subsidies from the system of public finances of the state?
What are the most effective measures for activating the innovativeness of economic entities, thanks to which the scale of investments made in technological branches of the economy increases and economic development accelerates?
An important factor determining the level of economic development in highly developed countries, which also translates into the level of income and general well-being of the economic, material, livelihood situation, etc. of citizens is the level of innovation of companies and enterprises. The issue of innovativeness of economic entities translates into labor productivity, efficiency of manufacturing processes and profitability of economic processes implemented by companies and enterprises. Innovation of economic entities can be realized in various spheres and areas of economic activity of companies, enterprises and also financial and public institutions. Business entities can create and develop technological, product, service, logistics, process, organizational, marketing and other innovations. In connection with the rapid technological progress and the ICT and Industry 4.0/5.0 technologies being developed, among others, technological innovations are particularly important considering the issues of improving the efficiency of manufacturing processes, increasing labor productivity, improving the profitability of production, etc. In recent years, the scale of implementation into business entities of such Industry 4.0/5.0 technologies as Big Data, cloud computing, Internet of Things, blockchain, digital twins, cyber security instruments, machine learning, deep learning, artificial intelligence, among others, has been growing. Among the important factors in the implementation of new technologies to companies, enterprises, financial and public institutions are favorable conditions for external investment financing of the creation or purchase, implementation and development of new technologies. External financing includes, among others, investment loans offered by commercial banks, equity financing offered by investment funds, national financial subsidies and financial subsidies under certain European Union programs, financing realized through the issuance of securities, i.e. shares and corporate bonds, loan funds, funds, etc. The innovativeness of business entities is often correlated with the level of entrepreneurship of these entities. Therefore, the government programs conducted to activate the innovation of business entities are often programs that also activate entrepreneurship. In recent years, the instruments of activation of innovation and entrepreneurship have included changes to the tax system as part of the fiscal policy pursued, as well as increasing outlays from the state finance system for the creation of funds for systemic support for the development of innovative business ventures initiated by startups and companies operating in the new technology sector. On the other hand, the soft monetary policy applied before and during the Covid-19 pandemic did not have significant effects in improving innovation and entrepreneurship. The interest rates lowered by the central banks to successive historically low levels did not result in a significant increase in the scale of innovation and entrepreneurship among economic agents. Lenient monetary policy improved liquidity in the financial sector, including the interbank market, activated lending in commercial banks' lending activities, improved the prosperity occurring in capital markets, including reducing the scale of the downturn in securities markets. Indirectly, therefore, an easing monetary policy can be a factor in the activation of innovation and entrepreneurship, if a significant portion of business loans, including investment loans, are taken by business entities to finance a venture involving the development or purchase and implementation of new technologies. In the context of the activation of innovation and entrepreneurship, it may also be important to improve and adapt to a specific socio-economic situation interventionist, anti-crisis and pro-development instruments and programs implemented under specific socio-economic policies, including, above all, budgetary, fiscal and sectoral policies, including sectoral policies to support the development of innovation.
I am conducting research on this issue. I have included the conclusions of my research in the following article:
Article THE IMPORTANCE OF ACTIVATING ENTREPRENEURSHIP AND INNOVATION...
In view of the above, I address the following question to the esteemed community of scientists and researchers:
What are the most effective measures for activating the innovativeness of business entities, so that the scale of investments made in technological branches of the economy increases and economic development accelerates?
How to build an effective system of activating the innovativeness of business entities financed with subsidies from the state's public finance system?
How to effectively activate the innovation of business entities using financial subsidies from the state's public finance system?
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Dariusz Prokopowicz
The above text is entirely my own work written by me on the basis of my research.
In writing this text, I did not use other sources or automatic text generation systems.
Copyright by Dariusz Prokopowicz
Dariusz Prokopowicz Building an effective system to activate the innovativeness of business entities financed through subsidies from the state's public finances requires a comprehensive approach that combines supportive policies, incentives, and mechanisms to foster innovation and stimulate investment in technological sectors of the economy. Here are some key steps and measures to consider:
By implementing these measures effectively, it is possible to create an enabling environment that activates the innovativeness of business entities, stimulates investment in technological sectors, and accelerates economic development.
Effectively activate business entity innovation through financial subsidies by:
1. Providing targeted grants or tax incentives for R&D investments.
2. Offering competitive grants with clear eligibility criteria and performance metrics.
3. Facilitating collaboration between academia, industry, and government through innovation hubs or clusters.
4. Establishing venture capital funds or loan programs specifically for innovative startups.
5. Ensuring transparent application processes and monitoring mechanisms to ensure accountability and impact.
I will explain this Q via an example.
If the US Fed pays Microsoft to distribute Windows free to the domestic economy first, & thereafter, to the rest of the world in a convenient manner, would it make any difference to the profit that Microsft makes?