1st year master's degree, Institute of Business and Law

Scientific supervisor: Ph.D., Associate Professor Shamina L.K.

St. Petersburg, Russia

The study of the principles of functioning of innovation processes in an industrial enterprise, assessment of the effectiveness of innovation activities is an urgent research problem at the present time.

The efficiency of an enterprise is expressed through economic and financial indicators. In a market economy there cannot be a unified system of indicators. Each investor independently determines this system, based on the characteristics of the innovative project, the professionalism of specialists and managers and other factors.

The following requirements apply to the indicator system:

• indicators should cover processes at all stages of the product life cycle;
• indicators should be formed for the future, for at least 3-5 years, based on a retrospective analysis of the organization’s activities;
• indicators should be based on data on the competitiveness of specific products in specific markets for a specific period;
• the most important indicators must be expressed in absolute, relative and specific values;
• indicators must be linked to all sections of the organization’s plan;
• indicators must reflect all aspects of the organization’s financial activities;
• the design of final indicators should be carried out on the basis of multivariate calculations, determining the degree of risk and sustainability of financial activities, using a sufficient and high-quality volume of information characterizing the technical, organizational, environmental, economic and social aspects of the organization's activities.

The introduction of innovations can produce four types of effects: economic, scientific and technical, social and environmental.

By obtaining an economic effect in the form of profit, an innovative organization carries out comprehensive development of the enterprise and improves the well-being of employees.

Other types of effect (scientific, technical, social, environmental) have a potential economic effect. The economic effect of developing, implementing at home (converting into innovation) or selling innovations can be potential or actual (real, commercial), and scientific, technical, social and environmental effects can only have the form of potential economic effect. In fact, if we take into account only the final results of the implementation or sale of innovations, then any type of innovative activity can be assessed in monetary terms.

The final assessment criteria here are: the time of obtaining the actual economic effect and the degree of uncertainty of its receipt (or the level of risk of investing in innovation):

• identifying the problem, formulating the goals and objectives of the analysis;
• formation of a temporary creative group to conduct analysis;
• development of a draft analysis program; preparation and publication of an order for the organization on the goals, group, its rights and responsibilities, analysis program;
• selection of work methods;
• collection and processing of necessary information, documents, etc.;
• conducting analysis on the above tasks and the system of indicators;
• preparation, coordination and approval of a report on the work done;
• taking action based on the results of the analysis.

1. Integral effect;

3. Profitability rate;

4. Payback period.

1. Integral effect E int represents the magnitude of the differences in results and innovation costs for the calculation period, reduced to one, usually the initial year, that is, taking into account discounting of results and costs.

The integral effect also has other names, namely: net present value, net present or net present value, net present effect.

2. Profitability index Innovation Jr.

The discounting method we considered is a method of comparing costs and income at different times; it helps to choose areas for investing in innovation when these funds are especially scarce. This method is useful for organizations that are in a subordinate position and receive from senior management an already strictly set budget, where the total amount of possible investments in innovation is clearly defined.

The profitability index can be used as an indicator of profitability. It also has other names: profitability index, profitability index.

The profitability index is the ratio of present income to innovation costs as of the same date.

The profitability index is closely related to the integral effect; if the integral effect E int is positive, then the profitability index J R > 1, and vice versa. When J R > 1, an innovative project is considered cost-effective. Otherwise J R< 1 – неэффективен.

In conditions of severe shortage of funds, preference should be given to those innovative solutions for which the profitability index is the highest.

3.Profitability rate E r

represents the discount rate at which the value of discounted income for a certain number of years becomes equal to innovative investments. In this case, the income and costs of the innovation project are determined by reduction to the calculated point in time.

This indicator otherwise characterizes the level of profitability of a specific innovative solution, expressed by a discount rate at which the future value of cash flow from innovation is reduced to the present value of investment funds.

The rate of return indicator has other names: internal rate of return. Internal rate of return, rate of return on investment.

Abroad, the calculation of the rate of return is often used as the first step in the quantitative analysis of investments. For further analysis, those innovative projects are selected whose internal rate of return is estimated to be no lower than 15-20%.

The resulting calculated value of E p is compared with the rate of return required by the investor. The issue of making an innovative decision can be considered if the value of E p is not less than the value required by the investor.

If an innovation project is fully financed by a bank loan, then the value of E p indicates the upper limit of the acceptable level of the bank interest rate, the excess of which makes this project economically ineffective.

4. Payback period T o is one of the most common indicators for assessing the effectiveness of investments. Unlike the “payback period of capital investments” indicator used in our practice, it is also based not on profit, but on cash flow, bringing the funds invested in innovation and the amount of cash flow to the present value.

Investing in market conditions involves significant risk, and this risk is greater the longer the investment payback period. Both market conditions and prices may change too significantly during this time. This approach is invariably relevant for industries in which the pace of scientific and technological progress is the highest, and where the emergence of new technologies or products can quickly depreciate previous investments.

Finally, focusing on the “payback period” indicator is often chosen in cases where there is no confidence that the innovative activity will be implemented, and therefore the owner of the funds does not risk entrusting the investment for a long period.

Thus, when studying the principles of functioning of innovation processes and assessing the effectiveness of innovation activities, a number of indicators are used, which can be expanded by taking into account the scientific, technical, social and environmental effects of innovation.

Literature

1. Shamina L.K. Theoretical aspects of the functioning of innovation processes. – St. Petersburg: Nauka, 2008. -85 p.

2. Organizational management / Ed. A.G. Porshneva, Z.P. Rumyantseva, N.A. Salomatina. - M.: IFRA-M, 2001

3. Bolshakov N.M., Novikov Yu.S. Innovative management of machine-building enterprises in a transition economy / In the book: Project management in a transition economy: investments, innovations, management. Sat. works international Symposium, Moscow: June, 2000, vol. II, p412.

4. Draft Federal Law of the Russian Federation “On Innovation Activities and State Innovation Policy in the Russian Federation”//Innovations. - 1998. - 2-3. - pp. 32-38.

5. Draft Concept of the State Innovation Policy of the Russian Federation for 2001-2005 // Industry of Russia. - 2000. - 6-8.

Collection of scientific articles
“Russia: potential for innovative development. Collection of scientific articles by graduate students and students",
St. Petersburg: Institute of Business and Law, 2011

When considering the classification of innovations, it was noted that innovations can be purchased and developed in-house, and innovations as a result of the introduction of innovations can only be carried out within the organization itself.

Innovations cannot be sold; innovations are sold to turn them into innovations in the sphere of consumption.

The life path of innovations can develop along one of three paths:

Accumulation in an innovative organization (IO);

Transforming AI into innovation;

Selling as a product.

The effectiveness of an organization is expressed through economic and financial indicators. In market conditions there cannot be a unified system of indicators. Each investor independently determines this system based on the characteristics of the innovative project, the professionalism of specialists and managers and other factors. This issue is discussed in more detail in the training courses “Enterprise Economics”, “Financial Management”, etc. Below are the author’s proposals, which do not claim to be complete.

The following requirements are imposed on the indicator system:

Indicators should cover processes at all stages of the product life cycle;

Indicators should be formed for the future, for at least 3-5 years, based on a retrospective analysis of the organization’s activities;

Indicators should be based on data on the competitiveness of specific products in specific markets for a specific period;

The most important indicators must be expressed in absolute, relative and specific values ​​(for example, profit, profitability of goods and production, unit price of goods);

Indicators must be linked to all sections of the plan;

Indicators must reflect all aspects of the organization’s financial activities (income, expenses, insurance, liquidity of securities and funds, taxes, efficiency of use of resources, etc.);

The design of final indicators should be carried out on the basis of multivariate calculations with determination of the degree of risk and sustainability of financial activities, using a sufficient and high-quality volume of information characterizing the technical, organizational, environmental, economic and social aspects of the organization's work.

One of the main indicators of the efficiency and stability of an organization’s functioning is the indicator of its sustainability.

The introduction of innovations can produce four types of effects (Fig. 14.2):

Economic;

Scientific and technical;

Social;

Ecological.

By obtaining an economic effect in the form of profit, the educational institution carries out comprehensive development and improvement of the well-being of employees.

Other types of effect carry potential economic benefits. For example, an invention developed by an IO as a top-level innovation can provide an economic effect either after its sale or after the sale of an IO product developed on the basis of the invention. Or an increase in the degree of physiological satisfaction

Rice. 14.2. System of innovation performance indicators

meeting the technical needs of IO employees and their families will reduce the loss of working time due to illness, increase labor productivity, the quality of reproduction of labor resources, etc., which cannot be immediately calculated in the form of an economic effect. Reducing emissions of harmful components into the atmosphere, soil, water preserves the ecosystem, increases human life expectancy, etc. This effect cannot be immediately translated into profit.

The given examples allow us to draw the following conclusion: the economic effect of development, implementation (transformation into innovation) or sale of innovations can be potential or actual (real, commercial), and the scientific, technical, social and environmental effect can only have the form of a potential economic effect. In fact, if we take into account only the final results of the implementation or sale of innovations, then any type of innovative activity CAN be assessed in monetary terms. The criteria for the final assessment here are the time of obtaining the actual economic effect and the degree of uncertainty of its receipt (or the level of risk of investing in innovation). The course “Management Decisions” notes that alternative solutions should be brought into a comparable form according to 8 factors:

Time factor;

Quality factor;

Scale factor;

Factor of development of an object in production;

Method of obtaining information;

Conditions for using the object;

Inflation factor;

Risk factor (primarily technological and commercial) and uncertainty.

When analyzing the effectiveness of an organization's innovative activities, the listed factors of comparability of analysis and evaluation options should be taken into account.

The criterion for making management decisions is the economic effect. Currently, in accordance with the recommendations of UNIDO (United Nations Industrial Development Organization), the following indicators for assessing the effectiveness of innovation activities are used in foreign practice:

1) net present value (NPV):

where T is the calculation horizon equal to the number of the calculation step at which the object is liquidated; Rt - results achieved at the t-th calculation step; 3t - costs incurred at this step; E - discount rate;

2) internal rate of return (IRR) or discount factor;

3) simple rate of return:

where NP is net profit; P - interest on borrowed capital; I - total investment costs;

4) simple rate of return on share capital:

where Q is share capital;

5) coefficient of financial autonomy of the project (Kfa):

where Сс - own funds; Z - borrowed funds;

6) current liquidity ratio (Cl):

where Qa is the amount of current assets of the project;

7) as an integral indicator characterizing the effectiveness of the organization’s innovative activities, the performance coefficient (r) can be used:

where Rс is the total costs of completed work accepted (recommended) for development in serial production; Qi - actual R&D costs for the i-th year; N is the number of years of the analyzed period; H1 - work in progress at the beginning of the analyzed period in value terms; H2 - the same at the end of the analyzed period.

To these parameters we should add another indicator of the payback period of investments in an innovative project (To):

where Pch is the net annual profit received as a result of the operation of the facility.

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Evaluating the effectiveness of innovative projects. The project approach to innovation and investment activities of an enterprise is based on the principle of cash flows. A special feature is its predictive and long-term nature, therefore, the applied approach to analysis takes into account the time factor and risk factor. In this case, effectiveness is determined on the basis of Methodological recommendations for assessing the effectiveness of innovative projects and their selection for financing.

As key performance indicators of an innovation project Methodological recommendations establish:

Financial efficiency, taking into account the financial consequences for project participants;

Budgetary efficiency, taking into account financial implications for budgets at all levels;

National economic economic efficiency, which takes into account costs and results that go beyond the direct financial interests of project participants and allow for monetary expression.

All methods for assessing project effectiveness are divided into two groups based on discounted and accounting estimates. The choice of method is determined by the timing of the project, the size of the investment, the availability of alternative projects and other factors.

"Net Present Value" (NPV) method. Net present value (NPV) is a value equal to the difference between results and costs for the accounting period, reduced to one, usually the initial, year, i.e. taking into account discounting of results and costs. The project is effective for any positive NPV value. The higher this value, the more effective the project.

"Profitability index method" (PI). This method allows you to rank various projects in order of decreasing profitability. The profitability index (PI) is the ratio of discounted income (PVr) to discounted innovation costs (PVk). In essence, the profitability index shows the amount of income received for each ruble of investment. From this we see that the project will be effective if the profitability index value exceeds 1.

"Internal rate of return method" (IRR) . The internal rate of return (IRR) is the discount rate (E) at which the total value of discounted income (PVr) is equal to the total value of discounted capital investments (PVk). In other words, the rate of profitability is defined as a threshold value of profitability that ensures that the integral effect (NPV) calculated over the economic life of innovation is equal to zero.

"Payback period" (PP) . The payback period is the time interval beyond which the net present value (NPV) becomes positive, i.e. payback is achieved in the period when the accumulated positive present value becomes equal to the negative present value of all investments. In other words, the payback period is the number of years required to recoup the investment.

None of these methods by itself is sufficient for project acceptance. Therefore, for a comprehensive assessment of the project you are considering, you must use all these methods together.

Assessing the effectiveness of innovation activities. To determine the economic efficiency of innovation activities, it is necessary to evaluate the cost effectiveness of it. It is necessary to distinguish between the cost effectiveness of innovation activities among producers (sellers) and among buyers.

The main criterion for justification economic efficiency of innovation activities among manufacturers (sellers) is its result: net present value, which is determined by comparing the costs incurred and the results obtained and is taken as the basis for all subsequent justifications for the economic efficiency of a specific innovation project. In addition, the economic efficiency of innovation activity includes the determination of other indicators we have considered: the profitability index, the payback period of capital expenditures and the internal rate of return of the project. The assessment ends with a determination of the stability and sensitivity of the main economic characteristics of the project to changes in internal and external parameters.

Economic efficiency of innovative activities among buyers it can be determined and managed by comparing the following indicators: costs of production and sales of products before and after the introduction of innovations; revenue from sales of products before and after the introduction of innovations; the cost of consumed resources before and after the introduction of innovations; average number of personnel.

Under sustainability of the project the maximum negative value of the analyzed indicator is understood, at which the economic feasibility of the project remains preserved. The stability of the project to changes in the analyzed indicator is calculated based on equating the equation for calculating NPV to 0.