INNOVATION MANAGEMENT AND BUSINESS PERFORMANCE ASSESSMENT: PROBLEMS AND SOLUTIONS
Abstract
Innovation has emerged as the principal driver of competitive advantage, productivity growth, and long-term value creation in the contemporary knowledge economy. Yet the management of innovation and the assessment of its impact on business performance remain among the most contested areas of strategic management research and practice. This article examines the central problems that complicate innovation management and the evaluation of its outcomes, and proposes practical solutions grounded in contemporary theory and empirical evidence. Drawing on the works of Schumpeter, Drucker, Tidd and Bessant, Kaplan and Norton, the OECD Oslo Manual, and recent studies on digital transformation, the paper identifies seven interrelated problems: the measurement gap between innovation inputs and outcomes, the dominance of short-term financial metrics, the intangibility of innovation outputs, the cultural resistance of organizations, the misalignment between innovation strategy and corporate strategy, the lack of standardized indicators, and weak data infrastructures. In response, the paper proposes an integrated assessment framework that combines the Balanced Scorecard, the Innovation Value Chain, stage-gate evaluation, and digitally enabled real-time monitoring. The discussion contributes to the literature on strategic innovation management and offers actionable recommendations for managers, policy-makers, and educators in transition economies.
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