Assignment: Follow Up – Innovation Business Brief
Assignment: Follow Up – Innovation Business Brief
Please, dear cover all the points in number (1-2-3-4-5) and especially in number (4) because is very important.
Please dear, covers each point in rubric because is very important to I get the high degree.
Also, please dear look at pages 77 and 78 of the textbook in the end of these pages.
Moreover, find attached.
The purpose of this assignment is for you to think critically about the importance of innovation throughout business life on a global scale.
In week 2, you wrote a brief about innovation as it relates to the company you chose (Toyota). You were asked to make some specific statements and a proposal for innovation with your take on what implications that proposal would have. Now you have had a few weeks to learn more. Has your thinking changed or do you stand by what you wrote in week 2? You get the chance to answer this question in this assignment.
1.Review the grading rubric (below) for this assignment.
2.Review what Hill wrote about innovation on pages 77 and 78 of the textbook.
3. Review what you wrote in week 2 for your business brief about innovation, especially your proposal and the implications you predicted. I sent you my assignment.
4.Explain whether or not you maintain what you wrote in week 2. More specifically, knowing what you know now, would you still make the proposal for innovation that you made in your original brief? Do you still feel that the implications you suggested are accurate? Use what you have learned in the course to explain any changes you would or would not make and your rationale for your choice.
5. Keep your Brief Update to one page.
Innovation Business Brief Follow-Up Rubric
Total 25 points
Defends Innovative Proposition or Alteration of Proposition.
Succinctly but thoroughly defends the original proposal or presents a strong case for a new one; explains his/her rationale for either choice.
Description of Implications: the student
Clearly explains why the international implications of the proposed innovation originally given still hold OR what implications he/she now sees with original proposal OR what implications would be associated with a new proposal.
Integrates established international business principles into the discussion.
Consistently does a good job of integrating established international business principles into the discussion.
Synthesizes relevant information and materials to provide evidence of critical thought.
Consistently and effectively synthesizes information, which provides strong support to main ideas.
pages 77 and 78 of the textbook
INNOVATION AND ENTREPRENEURSHIP ARE THE ENGINES OF GROWTH
There is substantial agreement among economists that innovation and entrepreneurial activity are the engines of long-run economic growth.5 Those who make this argument define innovation broadly to include not just new products but also new processes, new organizations, new management practices, and new strategies. Thus, the Toys “R” Us strategy of establishing large warehouse-style toy stores and then engaging in heavy advertising and price discounting to sell the merchandise can be classified as an innovation because it was the first company to pursue this strategy. Innovation and entrepreneurial activity help to increase economic activity by creating new products and markets that did not previously exist. Moreover, innovations in production and business pro- cesses lead to an increase in the productivity of labor and capital, which further boosts economic growth rates.6 Innovation is also seen as the product of entrepreneurial activity. Often, entrepreneurs first commercialize innovative new products and processes, and entrepreneurial activity provides much of the dynamism in an economy. For example, the U.S. economy has benefited greatly from a high level of entrepreneurial activity, which has resulted in rapid innovation in products and process. Firms such as Google, Cisco Systems, Dell, Microsoft, and Oracle were all founded by entrepreneurial individuals to exploit new technology. All of these firms created significant economic value and boosted productivity by helping to commercialize innovations in products and processes. Thus, one can conclude that if a country’s economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.
INNOVATION AND ENTREPRENEURSHIP REQUIRE A MARKET ECONOMY
This leads logically to a further question: What is required for the business environment of a country to be conducive to innovation and entrepreneurial activity? Those who have considered this issue highlight the advantages of a market economy.7 It has been argued that the economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than either a planned or a mixed econ- omy. In a market economy, any individual who has an innovative idea is free to try to make money out of that idea by starting a business (by engaging in entrepreneurial activity). Similarly, existing businesses are free to improve their operations through innovation. To the extent that they are successful, both individual entrepreneurs and established businesses can reap rewards in the form of high profits. Thus, market economies contain enormous incentives to develop innovations.
In a planned economy, the state owns all means of production. Consequently, entrepreneurial individuals have few economic incentives to develop valuable new innovations, because it is the state, rather than the individual, that captures most of the gains. The lack of economic freedom and incentives for innovation was probably a main factor in the economic stagnation of many former communist states and led ultimately to their collapse at the end of the 1980s. Similar stagnation occurred in many mixed economies in those sectors where the state had a monopoly (such as coal mining and telecommunications in Great Britain). This stagnation provided the impetus for the widespread privatization of state-owned enterprises that we witnessed in many mixed economies during the mid-1980s and that is still going on today (privatization refers to the process of selling state-owned enterprises to private investors).
A study of 102 countries over a 20-year period provided evidence of a strong relation- ship between economic freedom (as provided by a market economy) and economic growth.8 The study found that the more economic freedom a country had between 1975 and 1995, the more economic growth it achieved and the richer its citizens became. The six countries that had persistently high ratings of economic freedom from 1975 to 1995 (Hong Kong, Switzerland, Singapore, the United States, Canada, and Germany) were also all in the top 10 in terms of economic growth rates. In contrast, no country with persistently low economic freedom achieved a respectable growth rate. In the 16 countries for which the index of economic freedom declined the most during 1975 to 1995, gross domestic product fell at an annual rate of 0.6 percent.
INNOVATION AND ENTREPRENEURSHIP REQUIRE STRONG PROPERTY RIGHTS
Strong legal protection of property rights is another requirement for a business environment to be conducive to innovation, entrepreneurial activity, and hence eco- nomicgrowth.9 Both individuals and businesses must be given the opportunity to profit from innovative ideas. Without strong property rights protection, businesses and individuals run the risk that the profits from their innovative efforts will be expropriated, either by criminal elements or by the state. The state can expropriate the profits from innovation through legal means, such as excessive taxation, or through illegal means, such as demands from state bureaucrats for kickbacks in return for granting an individual or firm a license to do business in a certain area (i.e., cor- ruption). According to the Nobel Prize-winning economist Douglass North, through- out history many governments have displayed a tendency to engage in such behaviour. Inadequately enforced property rights reduce the incentives for innovation and entrepreneurial activity—because the profits from such activity are “stolen”—and hence reduce the rate of economic growth.
The influential Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism until property rights are better defined and protected.10 De Soto’s arguments are interesting because he says the key problem is not the risk of expropriation but the chronic inability of prop- erty owners to establish legal title to the property they own. As an example of the scale of the problem, he cites the situation in Haiti, where individuals must take 176 steps over 19 years to own land legally. Because most property in poor countries is informally “owned,” the absence of legal proof of ownership means that property holders cannot convert their assets into capital, which could then be used to finance business ventures. Banks will not lend money to the poor to start businesses because the poor possess no proof that they own property, such as farmland, that can be used as collateral for a loan. By de Soto’s calculations, the total value of real estate held by the poor in Third World and former communist states amounted to more than $9.3 trillion in 2000. If those as- sets could be converted into capital, the result could be an economic revolution that would allow the poor to bootstrap their way out of poverty. Interestingly enough, the Chinese seem to have taken de Soto’s arguments to heart. Despite still being nominally a communist country, in October 2007 the government passed a law that gave private property owners the same rights as the state, and significantly improved the rights of urban and rural landowners to the land that they use (see the accompanying Country Focus for details).
Assignment Innovation Business Brief
In business, innovation refers to the concept of introducing new ideas and translating them into goods or services that create value for the customers (Frenkel & Maital, 2014). For global businesses, the concept of innovation is important as it gives them a competitive edge and it enables them to consistently transform and remain relevant in business. The idea of starting the business at the beginning might be an innovation by itself and for growth and profitability, it is important for a firm to keep on innovating in line with its services or goods of trade.
Toyota Company and its Innovations
The history of the Toyota Company can be reflected back to the 1930s when the company began as a division of Toyoda automatic loom works in Japan. It produced its first passenger car in 1936 a model called AA. In 1937, it was launched under its own name as Toyota. The company has grown for over 75 years due to its innovations in terms of car models, safety aspects, reducing consumptions, reducing emFissions of harmful gasses such as carbon monoxide and even creating automated vehicles that can be operated easily even by the handicapped people. The company has brought in electric cars and even those that use hydrogen in efforts to create value for their customers worldwide. The company was first to lead by the son to Toyoda. The ambitions entrepreneur had good entrepreneurial skills and he was able to harness innovativeness through the workforce and the business environment as the competition shaped the situations. Today, the company manufactures Toyota brand and also the Lexus brand as the luxury vehicle division for diversity to enhance creating value for its customers (Toyota, 2016).
According to Hills, innovation and entrepreneurship are the engines of growth. As an automobile company, the Toyota Company has consistently differentiated its automobile products in efforts to grow and capture a wider market internationally. In this case, the Toyota Company is favoured by the market economy as it takes part in the global automobile business that is accepted and appreciated worldwide. Hill, Richardson, & McKaig (2006) argue that this economic freedom enables companies to remain innovative for many years. The continued stability enables the firms to venture into new innovations and even do better in the future. With capitalism, the Toyota Company has gained property rights which promote innovation at global perspective and the favourable market conditions enables the firm to consistently grow through innovations.
Innovation Proposal for Toyota Company
With the current trends in the car manufacturing industries, the Toyota Company has to consistently grow in innovations to remain competitive in the automobile business world. A great shift of the mechanical industries has seen the companies incorporate smart technology to use robots that partially substitute humans in driving and linking it with smart roads to facilitate safety. According to Dixon ( 2013), an innovation along this line of interest will go a long way in fetching newer and wider markets in the car manufacturing industries. Toyota needs to create new vehicles with the ability to self-drive in both smart roads and outside smart roads and with the ability to fully substitute human drivers on the roads.
These vehicles should have the ability to self-drive outside smart roads by the help of satellites or other pre-set programs that will make them safe for the use in markets where smart roads have not yet been developed. In addition, this innovation should seek to break barriers that other companies have not managed to go through. They need to make them sophisticated enough to completely substitute human drivers with high levels of robot abilities that facilitate safety on the roads. These vehicles should be enhanced with the ability to self-command in different occasions for safety along the roads. They need to have integrated mechanisms that enable them to cooperate with other human driven vehicles and road safety systems such as traffic lights, roundabouts amongst others.
For examples, this innovation will enable the use of tracks that are self-driven to make pick-ups and drop-offs in the area they are meant to operate. These vehicles should be built with the ability to adapt to new environments even where they are not familiar or pre-set to travel. This will increase their use beyond the normal routine travels hence making them more appealing to different markets all over the world.
The International Implications of the Proposal
The ability of the vehicles to fully self-drive and fully substitute the human drivers in both smart and non-smart roads will have great implications for the international automobile demand. The purpose of this innovation is to increase sales and contribute to the increasing needs to enhance safety on the roads. In addition, these will increase output as the robots can drive longer hours than the human drivers.
The successful use of this technological innovation will greatly shift the demand for human drivers in the transportation sector (Ford, 2015). The increase in its adaption in the intentional markets will increase road safety as these robots are created with high abilities and they are not prone to distractions that the human drivers are exposed to such as sleep, being under influences or normal carelessness that results in to accidents along the roads.
There will be increased productivity as these vehicles can be able to work full-time without suffering from fatigue or other human-related weaknesses (Pela´ez, 2013). They will be in a position to go beyond the normal working hours thus growing economies of the various countries worldwide. The smart systems used will help to reduce road jams that waste huge volumes of fuel and time for the humans. This way, people can spend more time working in other areas while vehicles carry out other roles.
However, these fully self-driven vehicles will have a great impact on the human driver’s jobs. Massive loss of jobs will be experienced as their adaption grows worldwide. The level of adoption and acceptance might also be slow depending on the way people from different parts of the world perceive this technological innovation. In addition, some human activities such as safari rallies will not be able to adopt the technology in their sport as human drivers are their greatest asset and focus in this sport (Zhang, Liu, Chen, & Wang, 2014).
Toyota has consistently grown through innovation as it seeks to identify and fill gaps in the automobile sector thus creating value for its customers worldwide. With the high level of competition in this sector, the firm needs to continue growing new ideas and translating them into value for their customers. The concept of fully robot-driven vehicles is a green idea that the company can seek to execute. By developing fully robot-driven vehicles that are able to operate in both smart and non-smart roads, the firm will be able to capture wide markets internationally hence growing its market share and total profitability of the firm. Although the might be difficulties in adaption in some markets, continued sales in the loyal markets will promote the idea to newer markets hence increasing sales ultimately.
Assignment: Follow Up – Innovation Business Brief