How the profitability of production shows the quality of innovation

Profitability is a universal relative parameter that characterizes the degree of efficiency of production, commercial or other economic activity, including in the sphere of the use of natural resources. In the most general form, the profitability of production shows the volume of profit that a business entity can receive or received per unit of capital. In this case, the cost of all the resources expended in the enterprise or organization is taken into account, regardless of the source of the resource's origin. It is this last condition that makes profitability a complex parameter, the formation of which depends on many factors.

In the classical version, the profitability of production is defined as a mathematical value, a coefficient representing the ratio of the amount of balance profit to the value of the capital cost expended for a certain period. Thus, the logical conclusion is that this parameter indirectly depends on other indicators of economic efficiency.

The complex nature of the profitability indicator includes such components as profitability of products, sales, profitability of fixed assets and assets, profitability indicators of personnel, and others. A special role in determining profitability is played by investment capital, which is characterized by the ratio of profit to the average debt capital for a certain period. Therefore, the overall economic profitability of the enterprise, which functions in the context of implementing innovative investment projects, largely depends on the effectiveness of their implementation, because here, as a rule, most of the investment capital is concentrated.

Effective implementation of investment projects largely depends on the quality of the innovation center, which can be created as an autonomous subdivision of the enterprise, and on the basis of some existing one.

The success of the innovation center is determined by the availability of personnel potential, able to offer new creative ideas and solutions or to find non-traditional areas of application of already known solutions for the implementation of in-notational projects.

The study of creative ideas that determine the profitability of production, shows that in most cases, their source is the patent fund. Carrying out patent research allows identifying trends, achieved level of technology, selecting the most promising inventions and industrial designs that can form the basis for developing competitive products or technologies or will be used as prototypes for creating new patentable solutions with high commercial potential.

Of great importance is the availability in the organization of a methodology for assessing the technical and economic importance of technical solutions for the selection of innovative projects in terms of their successful commercialization and the conditions that the profitability of production makes. Whether it shows it or not, the real dependence of innovation success on profitability, is rather widely reflected in the modern economic literature. In the works of a number of authors, the importance of technical solutions is proposed to be characterized by such indicators as the degree of novelty, prospects, manufacturability, the expected effect, conditions of implementation, etc. Each of the characteristics is presented in the form of a system of indicators, which is given an expert evaluation in points. It is obviously possible to assess the influence of inventions and other decisions on the achievement of the expected technical and economic parameters in the presence of a ranked list of such indicators for a particular facility. That is, all these indicators are practically comparable to those used to analyze the overall effectiveness of economic activity. In this case, the profitability of production shows how effectively the investment capital used for implementing innovative projects is used, and can be viewed as a component reflecting the overall profitability.

In foreign practice (USA, Canada, etc.), a system of preliminary evaluation of innovations based on a multicriteria approach is widely used. In the USA, for example, in 1988 a special law on technological responsibility was adopted and a national service for the technical assessment of innovations was created. The main criteria for selecting promising innovations are market parameters: the dynamics of demand for a certain product, the assessment of market risk, the state of competition, the required investment and profitability, including.