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Marketing Innovations At The Function Of Institutional Development: A Case Of Resource Constraints

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  • Irina Taranenko

Abstract

Existing literature gives a considerable significance to the role of innovation capacity and modern marketing tools as major drivers of firm performance. Marketing, organizational and technological capabilities often demonstrates high efficiency being complement each other in achieving strong competitiveness of the enterprise at domestic and world market. It is well known that a problem of resource constraints is typically faced by majority of enterprises at transitional economies. The shares of public funding (central governments, local and regional authorities or international institutes and funds) in R&D and innovation expenditures as well as number of public - private partnerships in science, technique and innovation area are considerable less in transitional economies comparatively with EU, USA and other developed countries. Taking into consideration scarcity of internal resources under the conditions of global economic non - stability and permanent crisis symptoms, low interest and weak stimulus to invest funds into R&D, renovation of technology and new products, the alternative drivers of enterprises' performance are take on special significance. The goal of the paper is being based on dataset of Eurostat and Ukrstat (Statistic Service of Ukraine) to compare the role of technological and non-technological (marketing and organizational) innovations in EU countries and Ukraine. In additional to this, the problem of special interest raised in the paper is in which extent technological and non-technological (marketing and organizational) innovation may substitute each other as drivers of economic performance. The main attention we pay to the role of marketing innovations. In conclusion we ground that marketing (and organizational) innovations and technological innovations may be considered as substitutes under the condition of weak institutional environment, and as complementary phenomena under the condition of well-developed institutional environment. Marketing (and organizational) innovations are the short term effective instrument to: a) ensure the enterprise performance under the resource constraints caused by global crisis effects; b) reinforce the competition as a market institute; b) contribute to overcome the restrictions to growth caused by institutional disbalances and unfavorable institutional environment at transitional economies. However the institutional reform at transitional and emergence economies aimed to transform the system of relationship concerning property rights, for encourage the enterprises to realize the long-term investments in R&D as well in equipment and technology renovation is of high importance as long-term period measure.

Suggested Citation

  • Irina Taranenko, 2012. "Marketing Innovations At The Function Of Institutional Development: A Case Of Resource Constraints," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 8(3), pages 105-118.
  • Handle: RePEc:mje:mjejnl:v:8:y:2012:i:3:p:105-118
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