Role of Innovation in Sustainable Development: Comparison
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Please note this is a comparison between Version 2 by Wendy Huang and Version 1 by Oleksandr Dluhopolskyi.

Innovation and innovative activity are powerful tools for increasing the competitiveness of enterprises, regions, and countries. The level of innovative activity is an excellent indicator of a country’s efforts towards sustainable development and its ability to be up to date. Innovations are fundamental tools for high-tech product manufacturing and technological improvement in industries. This theme is deeply developed by world organisations and agencies and presents increasing evidence in academic and scientific spheres.

  • sustainable development
  • innovation
  • innovative activity
  • eco-innovation
  • human capital

1. Introduction

The issue of research on innovation in countries is relevant at this time to various international agencies and organisations. These international agencies and organisations provide their own sets of indexes to measure the innovative activity of countries on a global scale.
Thus, the World Intellectual Property Organization each year publishes the Global Innovation Index. In 2021, Switzerland, Sweden, and the United States of America took the first three places. Moreover, in 2021, South Korea took 5th place for the first time. Despite its potential, Ukraine was in the 49th position [1].
Bloomberg is one more agency looking for innovation leaders in the world. This agency calculates the Bloomberg Innovation Index. According to the Bloomberg Innovation Index, South Korea, Singapore, and Switzerland are the leaders. Ukraine took 58th place [2]. Therefore, Ukraine is far from an innovation leader and needs to work harder. Nevertheless, international agencies and organisations conduct deep research on innovative activities worldwide.
The Russia-Ukraine war has significantly changed conditions and negatively affected life in Ukraine, including its innovation potential and development of innovative activities. At the moment, there are no answers to questions about the war’s duration, the date of its end, and the essence of the peace concept. However, the war has entered a phase of relative stability, in which it is possible to predict options for future economic development and innovative activities. The need for forecasting options for reconstruction and development is enormous. Taking into account the fact that some regions have been destroyed and the infrastructure in these areas will not be subject to restoration efforts, also because of causing significant adverse environmental consequences, there is a practical opportunity to carry out innovative projects in these territories, particularly regarding the restoration of habitats from ecological, economic, and social perspectives. Accordingly, this forms a suitable basis for scientific research in the field of innovative development, including comparison with a country that had similar problems at a particular time and successfully and quickly managed not only to solve the issues but also acquired rapid economic development.

2. The Influence of Innovation and Innovative Activities

Increasing industrial growth and sustainable development create conditions for shifting the innovation type’s importance and the emergence of new kinds of innovation. Thus, the importance of eco-innovation rises significantly.
In [3], exploring four types of eco-innovation (product, process, market, and source of supply), the researchers proved that the financial capabilities of the enterprise are important in environmental innovation and create pre-conditions for eco-innovative development. Moreover, the researchers mentioned the positive impact of eco-innovation on an enterprise’s financial performance. In [4], the researchers highlighted the complementary link between an enterprise’s innovative capabilities and eco-innovation. This interrelation showed that an enterprise’s “normal” innovation (technological or non-technological) stimulates future eco-innovation. The researchers also proved the connection between different types of innovation [5]. In the article, the researchers showed that open innovation significantly affects eco-innovation, and their integration can help provide an improved open eco-innovation model. Moreover, in [6], the researchers also studied open innovation and its influence on increasing eco-innovation performance. In [7], the researchers confirmed that the eco-innovation implementation process influences organisational and operational barriers. The researchers proposed and validated an eco-innovation maturity model (Eco-Mi) to overcome these barriers and implement eco-innovation more effectively.
In the researched articles, the researchers highlighted the importance of eco-innovation for humanity. They demonstrated the connection between different types of innovation. Additionally, they showed that enterprises with experience in implementing other types of innovation could produce more successful eco-innovations.
A group of scientists also worked on the problem of the influence of innovation and innovative activities on enterprise effectiveness.
The researchers in [8] analysed the influence of different types of innovation on firm growth over the business cycle. They affirmed that firms with innovations based on R&D activities can better resist business cycle fluctuations. Accordingly, the researchers in [9] proved the positive impact of innovation efficiency on enterprise efficiency. Thus, the scientists determined that the implementation of innovative projects enables a significant increase in the financial indicators of an enterprise.
After investigating firm-level data in emerging economies, the researchers in [10] verified that innovative activities, especially R&D activities, and quality management help to improve an enterprise’s profitability and performance.
In [11], the researchers investigated the innovative activities of small businesses [12]. They analysed innovation antecedents to determine the factors that drove business owners to innovate. Wulandari [13] analysed the influence of the characteristics of small and medium-sized enterprises on the owners’ intentions to implement marketing and technological innovations. The researchers determined that motivation and social status influence marketing innovative development, while financial stability and risk appetite directly affect technological innovation intentions.
Analysis of the possibility of applying innovative tools by small and medium-sized enterprises on the way out of the economic crisis [14] caused by the COVID-19 pandemic [12] demonstrated the need for innovative development of SMEs and the search for new opportunities to support and develop business activities.
The researchers in [15] analysed the dynamics of the indicators of innovative activity and innovative capacity identification. Then, they developed recommendations to increase the efficiency of enterprises’ innovative activities. Additionally, in [16], the researchers highlighted the mismatch of innovative activity financing in Ukraine, and in [17], the researchers demonstrated uneven development of innovative activity across regions of Ukraine.
An analysis of the dynamics of innovative development and NRT [18] confirmed the hypothesis regarding the importance of the quality of scientific activity to ensure a country’s socio-economic development. In [19], the mutual directions of the influence of the indicators of innovative growth, the country’s competitiveness, and sustainable development were established.
In [20], the opportunities and consequences of the results of the Fourth Industrial Revolution for business management were highlighted. The study results provide insight into the business world’s position and the importance of adaptability and innovation in this scenario. In addition, understanding the principles of innovation management and determining the specifics of using open analytical sources of big data by consumers can help to achieve leadership in certain sectors of the world economy.
The economic system itself can receive additional multiplier effects from implementing a justified innovation policy, which must be considered when evaluating the microeconomic indicators of economic growth [21], including the effects of structuring the GDP according to the innovativeness criterion. Managing innovation at a global level enables faster responses to complex market conditions and sustains business resilience through problem solving [21].
Thus, innovation and innovative activity are the sources of increased enterprise performance and growth of national and global economies.
One more important direction of scientific investigation is human capital and innovation.
Thus, the researchers in [22,23][22][23] investigated the link between the mobility of R&D workers and the innovative activity of new and old employers. The researchers determined a positive correlation—labour mobility stimulates the overall innovation of a country or region due to knowledge transfer.
In [24[24][25],25], the scholars analysed the problems of personnel motivation and stimulation of innovative activity at an enterprise.
The researchers in [26,27][26][27] identified the current strategic guidelines for growth of the intellectual potential of the human capital of enterprises and institutions under the conditions of innovative transformation. At the same time, the articles established a relationship between the intellectualisation of human capital and innovation that affects the stability of economic systems. On the other hand, the researchers in [28] determined the impact of human capital and the level of its development on economic change, digital transformation, and, accordingly, the development of innovative activities. Also, an important aspect is understanding the relationship between state investments in human capital and a country’s economic growth. However, research in [29] showed that, for developing countries, the co-integration relationship is absent in the long-term because several factors related to investing in the development of human capital have a direct negative impact on economic growth (e.g., corruption, significant level of migration, etc.).
Accordingly, in [30], the researchers defined the parameters of investment attractiveness [31], among which were innovation and research.
These works confirmed that innovative activity is impossible without strong, highly qualified employees producing new creative ideas.
Research on the innovation market and innovative development is impossible without understanding the key and secondary factors influencing the mentioned processes [32]. Thus, studying the essence of internal financial risk [33] can help to reduce the percentage of market innovation failures due to financial problems, investment problems, etc. [34]. Analysis of the development of information and communication technologies [32] has determined the significant impact of innovation, education [35[35][36][37],36,37], and research components [38,39][38][39] on the process of digitalisation of the economy [40[40][41][42],41,42], which determines, in turn, the need for the development of strategic cooperation between the public, business, and higher education sectors.
The current conditions also increase the role of social innovation. Although this problem is not new, research keeps investigating it. Therefore, the researchers in [43] paid attention to categorisation and determining the types of social innovation.
Moreover, in [44], the researchers concentrated on types of “doing well by doing good” innovations. These innovations aimed to overcome specific social problems.
Additionally, in [45], the researchers proposed the structure of the social innovation process, which is non-sequential and contains five phases. Also, the researchers proved that the social innovation process could involve different stakeholders.
In [46], the researchers paid attention to another aspect of social innovation. They highlighted the correlation between creativity, entrepreneurial intention, and social innovation. The researchers proved that creativity and entrepreneurial intention create the basis for social innovative development. In [47], the researchers demonstrated the impact of social networks on creativity and innovation and their role as a driving force in creating social value.
In both [48,49][48][49], the scientists highlighted the importance of stakeholder interaction and collaboration while providing social innovation. For example, cooperation between government and non-governmental organisations, national innovation systems, and social entrepreneurship. Such collaborations can help implement social innovations faster, easier, and in a less costly manner.

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