Are the companies prepared to innovate?

The importance of innovating in the company has been on the table for years, being often part of a discourse of good intentions rather than a real event. Are companies really prepared to innovate? What do they understand by innovation?

First, to understand what innovation really implies, it is necessary to differentiate this action from what we commonly understand as R&D (Research + Development). While the latter falls within the scope of laboratories and engineering, innovation transcends these barriers and connects directly with the backbone of the organization. Innovating not only implies creating new or doing something in a different way, but also to do it better.

Areas of action

Simplifying the scenario to make it more understandable, we could reduce the areas of action of innovation to two main areas:

  • Products and services. It is the one that comes to mind automatically, the one that visualizes the commercialization of products and services with new qualities, more functionalities or a greater scope.
  • Organization. It is the one that can go unnoticed and, however, the one that can have a greater positive impact on the organization. It consists of adopting new methods in different areas of the company (manufacturing, distribution, and logistics) or even in the same business model. Changing the ways of doing things, immersing you in these processes, can bring great improvements in productivity, efficiency and cost savings.
Innovación

Types of innovation

Innovation experts have identified three major types:

  • Individual innovation – It is related to one of the essential factors for this type of strategy to succeed: create a culture of innovation in the company. Only in this way the workers do feel part of the process, their creativity skills are stimulated to undertake new projects and generate ideas. For this it is very important to establish a horizontal communication with the staff, reinforcing its commitment to the organization.
  • Continuous innovation – A company can innovate or be innovative. The difference is that in the first case, it may be just a timely fact and instead, the second case, is a characteristic. To achieve this continuous innovation, it is necessary to monitor, measure the results and maintain such creativity.
  • Disruptive innovation – It is a real revolution and is the one that occurs the least number of times. It can even lead to the creation of a new industry or a drastic change in its standards that gives a Copernican turn to the entire business.

Digital transformation

With the radiography drawn so far, we can deduce that the effects of innovation processes can occur both internally and externally, that is, produce changes in the internal processes of the organization or in the product or service that reaches the consumer or client.

In either case, it is not about innovating by innovating, but it is necessary to keep in mind for what. In this sense, it is crucial to carry out a previous analysis of our business strengths and weaknesses, being able to apply innovation on both fronts.

One of the actions, that is being carried out most are the digital transformation processes, which reach the entire company and in which, on many occasions, it is necessary to seek external collaborators.

Tax incentives

On the other hand, the advantages of innovating go beyond the effects it may have on productivity or efficiency: it can lead to significant tax benefits. This is reflected in the Corporate Tax Law, which contemplates different deductions depending on the phase of the R&D process.

Experts say that combined both lines of action, that is, R&D and innovation, it is possible to obtain up to 59% deduction on direct R&D expenses and up to 12% in Information Technology (IT). The sector, size or annual turnover is indifferent, with the added advantage that it is not only possible to impute in 18 years, but it can also be transformed into cash.

Rocío Andreo

Directora Financiera Responsable del área financiera, administración y Marketing Financial Manager Responsible for the financial area, administration and Marketing

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