Prospective Directions for the Development of Innovation as the Most Powerful Factor in the Growth of the Digital Society - Praxeological Foundations of the Philosophy of the Digital Society and the Digital Human

Philosophy of Digital Man and Digital Society - 2024



Prospective Directions for the Development of Innovation as the Most Powerful Factor in the Growth of the Digital Society

Praxeological Foundations of the Philosophy of the Digital Society and the Digital Human

In the contemporary landscape of the emergence of the digital human and digital society, there is a diffusion of influence among nations, which will yield the most dramatic consequences by 2030. The diffusion of innovations is the equilibrium process by which new ideas and practices spread within the business circles of scientific, technical, production, and organizational-economic activities. Each country is tasked with developing a concept for innovative development—a system of fundamental principles crafted by state leadership (at the level of regions, sectors, organizations, enterprises, or large corporations)—which defines the state's policy in this domain, advancing reengineering as a fundamental rethinking, radical redesign, and renewal of business processes to achieve leapfrog improvements.

The concept of innovative development encompasses a set of innovative projects and measures coordinated in terms of resources, executors, and timelines, ensuring the effective resolution of tasks related to the mastery and dissemination of fundamentally new types of products, including digital technologies. Each nation must cultivate an innovative infrastructure that supports innovative activity, primarily comprising innovation-technology centers, technological incubators, technoparks, educational-business centers, and other specialized organizations.

The innovative environment of developed nations is a confluence of internal and external circumstances of participants in the innovation process, endowed with innovative potential aimed at achieving innovation objectives (the realization of innovation strategy), resource allocation, and organizational mechanisms (technology of activity and organizational structure). The innovative sphere of developed countries is a system of interaction among innovators, investors, producers of competitive products (services), and advanced infrastructure. Today, Asia surpasses North America and Europe combined in terms of GDP growth, population size, defense expenditures, and technological investments.

China has emerged as the world's largest economy, already outpacing the United States. Amid structural shifts in the global economy, significantly linked to the developed world, transformations occur concerning economic standings and factors influencing innovation activity. The latter represents a set of organizational-economic measures aimed at creating favorable conditions for attracting investments from both internal and external sources, fostering innovative endeavors that require state support. The technological divide between developed and developing nations is characterized by the financial resources necessary to invest in new technologies to achieve results that will soon be supplanted by emerging digital technologies.

Let us focus on the innovative activities in the leading countries of the West and East, founded on the realm of developing and practically implementing technical, technological, and organizational-economic innovations, which encompass not only innovative processes but also marketing research on product markets, their consumer properties, and a new approach to organizing informational, consulting, social, and other types of services.

In addition to China, India, and Brazil, significant regional players like Colombia, Indonesia, Nigeria, South Africa, and Turkey also influence the development of an innovative economy. Conversely, the economies of Europe and Japan are likely to experience gradual decline, shaping innovative proposals—propositions for participants in the innovation process for investment and continuation of activities at any stage of the innovation cycle. Changes in national power structures may overshadow an even more fundamental shift in the nature of power itself.

Through communication technologies, authority will shift toward multidimensional and amorphous networks that will impact the actions of states and the global community. Countries, even those with maximum GDP indicators and population sizes, will be unable to expand their global influence until they learn to operate within the networks and coalitions of a multipolar world.

The innovations of the world stand as a vital factor in growth and prosperity, as they encompass new developments resulting from the practical (scientific-technical) mastery of novelties. Innovations include new products, knowledge-intensive technological processes, product modifications, and new services; thus, the primary task is the formation of innovative projects as a process of deliberate change or the creation of a new technical or socio-economic system.

The elevation of China’s status, on one hand, and the decline of the United States, on the other, serves as a reminder that without investment in education and scientific research, the economic advantages of America cannot be sustained. Therefore, it is essential to cultivate innovative strategies.

The concept of innovative development is a system for implementing the priorities of entities in the sphere of innovative growth, defining the main directions of their activities within this domain, developed at the national level and also at the levels of regions, sectors, and organizations (firms). An enterprise's (firm's) innovative strategy constitutes a designed system for realizing priorities in its innovative activities, implementing scientific-technical and organizational innovations, and adapting personnel to new operational and economic conditions. An innovative strategy is a collection of decision-making rules that guide an organization in its activities, rooted in the identification of early signs of technological obsolescence in the products produced.

Leapfrogging innovations play a crucial role in the advancement of innovative development as the most powerful factor in growth and prosperity in contemporary society, as they improve life in the long term. We do not need fictitious innovations. Purchases, taxi orders, and vacation travels were all possible before the advent of Amazon, Uber, and Airbnb. What is necessary are breakthroughs that will enhance life for as many people as possible, such as the implementation of tall wind turbines and new types of purification facilities. What is the West's position in this regard on the international stage when considering this question from a historical perspective—from the advent of printing to biotechnology? The most recent leapfrogging innovations in Germany primarily occur within the automotive and chemical industries.

The concept of innovative development includes the following areas of progress. Analog computers resemble neural networks. Plans are underway to revive analog computers that calculate quite differently when faced with complex questions. While a digital computer contains only a few computational blocks that process very simple commands quickly, an analog computer comprises numerous computational elements—ranging from several dozen to thousands, and potentially millions in the future—interconnected. Rather than processing step by step and shuttling billions of bits back and forth, one can analyze the problem using computational elements and then calculate the result through measurement. Analog computers are akin to biological neural networks, such as the brain, which can process vast amounts of information. The primary application area is seen in the development of artificial intelligence that mimics network structures. When utilized wisely, such machines significantly outperform digital computers.

Unlike classical analog computers, which are interconnected through vast networks of cables, researchers are working on an analog computer chip that allows for freely configurable connections. Control will be managed through a digital computer linked to the analog computer, forming a hybrid system. Analog computers represent the next step in the evolution of our computing systems, aimed at greater productivity and energy efficiency.

Wind Energy. Germany is betting on an innovative leap in the utilization of wind energy, which plays a crucial role in the gradual phase-out of fossil fuels. However, the idea of large-scale wind farms has not yet found favor among the populace. A potential solution to this issue could lie in reducing the total number of turbines and creating individual high-altitude wind turbines. These would operate much more efficiently, as winds are considerably stronger at greater heights, though constructing such tall windmills is no simple task. At least, not if they are built using traditional technology, with the generator situated at the height of the rotor blades' hubs. Engineer Horst Bendix has demonstrated how to design wind turbines according to a different principle, significantly increasing their height. This inventor has constructed a windmill whose generator is located at the base of the structure and driven by a pulley. This allows for a design towering 250 meters tall while maintaining the same weight. When adding rotor blades, this windmill could reach twice the height of Cologne Cathedral.

Innovations for Brown Coal Extraction. Innovative companies plan to create towers from standard steel pipes, significantly reducing the overall construction cost. To withstand the force of the wind, the structure must be built on a rotating platform. This could be a chassis used in crane lifts or supporting rotating devices on ball bearings.

How effectively could such machines harness high-altitude winds in the future? Wind turbines could generate ten times more energy than current systems, with an 80 percent reduction in land use. These systems represent the most intelligent solution for reorganizing former brown coal mining areas. Both current mining regions in Saxony and North Rhine-Westphalia, as well as those that existed in Saxony-Anhalt and Brandenburg, could transform into centers of innovation and production based on wind energy.

Urban and Regional Development. The aim of innovative policy is to ensure the development of cities and regions as globally competitive centers of industrial innovation, characterized by a high share of high-tech industries, an advanced economy of a new technological structure, and a well-formed segment of the regional economy. To achieve this goal, the main areas of focus in the coming years must include the development of human capital, facilitating the transition from traditional sectors of the economy to a "knowledge economy." In light of this reality, the question arises: what can countries do to harness innovations and breakthrough technologies to accelerate economic growth within the context of developing a "knowledge economy"?

Hamburg Creative Society (Hamburg Kreativ Gesellschaft) is an institution established by the Free Hanseatic City of Hamburg. This private company is 100% owned by the city. It operates Music WorX—an accelerator funded with state resources from 2016 to 2023, supported by the European Union's Interreg Program and the Cross-Innovation Hub. Today, to shape a digital society as one of prosperity and well-being, it is necessary to employ not linear but exponential thinking, states Nicholas Haan, Vice President of the Faculty of Global Grand Challenges at Singularity University.

To instill this concept in the minds of millions of citizens, he provides the following example. If you take 30 linear steps, you will move forward 30 meters; however, if the same number of steps is taken exponentially, you will travel around the world 2.8 times! Innovations occur whether we like it or not. Today's organizational leaders must become innovators, necessitating a shift from linear thinking to embrace exponential technological changes.

Given this context, Vasil Hudak, Vice President of the European Investment Bank (EIB) from Slovakia, concludes: “We need innovations to survive. Innovations must shape the future of Slovakia.” To tackle these challenges, business and organizational leaders must identify innovative and technological issues while familiarizing themselves with global experiences. There is ample evidence that innovations and technology adoption can accelerate economic growth. It has been demonstrated that innovative companies grow faster, specifically by 15% in sales and 8% in productivity. However, enacting such changes is not straightforward. Innovations and breakthrough technologies present exceptional opportunities for accelerating economic growth, yet they also source concerns for governments, companies, and individuals, notes K. Müller, Vice President of the World Bank for the Europe and Central Asia region.

In a recent report by the World Bank titled "The Innovation Paradox," two types of failures are identified that undermine the impact of innovation and technology adoption. First, most companies in developing countries slowly identify and adapt to more advanced technologies, which prevents them from reaping substantial returns from the implementation of technologies and innovations. Second, governments struggle to devise innovative policies that can effectively promote the process of "getting tired of technological lag."

So, what needs to be done? The first task for those responsible for crafting innovative policy is to create an ecosystem that will unlock innovative potential through the advancement of high levels of technology as a measure of the development of scientific and practical knowledge about the combination of equipment and methods that influence work materials in industrial production. Innovators seek proper regulation of innovative activities, asserts Müller.

Policymakers have at their disposal a myriad of tools, including innovation grants, equity subsidies, venture capital, shareholder funds, and loan guarantee schemes. In selecting the optimal combination of these tools, the key lies in acquiring evidence of what works and what does not. I. Kočis, an innovator and founder of GA Drilling, observes that many innovators leave Slovakia due to a lack of funding to develop their ideas. His recommendations for policymakers focus on financing, with the best solution being the combination of private capital with public funds. Initial experiments should be conducted using private capital, as this can be done more quickly with one’s own money. After developing a prototype of an innovation, public funding should follow. After this stage, attention should again return to private funds for investments. The life cycle of an innovation is the period from the conception of an idea by the innovator to its assimilation and utilization by the consumer-innovator.

The World Bank Group, along with many clients in the region, has already recognized the importance of innovation for development and has worked for the past two decades to make innovative systems more robust. The World Bank has financed over 50 projects concerning innovation in the region. These initiatives address a broad array of issues—from stimulating innovative activities among companies and individuals, promoting high-quality, contextually relevant national research and the commercial application of technologies, as seen in Kazakhstan and Serbia, to assisting other countries in creating better conditions for innovative activity.

The World Bank has accumulated global knowledge and experience, states Bagrat Engibaryan, Director of the Entrepreneurship Cultivation Fund in Armenia. No government wishes to share its failures; only the World Bank is willing to do so. Only in this manner can we learn what works and what does not. There is no need to reinvent the wheel time and again.

Furthermore, it is essential to examine the following new opportunities developed under the "Horizon Europe" program:

  1. Know-how as a repository of information in the form of knowledge and experience in producing new and competitive products;
  2. New products as outcomes of the intellectual endeavors of personnel in scientific and technical organizations following research and development, which have taken tangible form in prototype models;
  3. Innovation as the process of intellectual activity characterized by creativity, resulting in new scientific knowledge, discoveries, inventions, rational proposals, and other outcomes of innovative solutions.

Maximizing the innovative potential within the EU will see this support doubled for member states lagging in their efforts to fully utilize their national research and innovation capabilities.

New synergistic connections will facilitate the seamless coordination and combination of funding, thereby assisting regions in implementing innovations:

  1. A heightened openness: The principle of "open science" will become the modus operandi of Horizon Europe, necessitating open access to publications and data.
  2. A new generation of European partnerships and an expansion of cooperation with other EU programs based on integral project design as a means of organizing the innovation process, encompassing all types of work related to the creation of new products over time.
  3. In the domain of fostering the emergence of new high-tech sectors of the economy, the development of innovative entrepreneurship and investment activity in innovative infrastructure will include the following avenues:
    • Encouraging industrial enterprises and engineering companies to formulate and implement programs for innovative development, as well as technology outsourcing programs that involve the cultivation of cooperative links with small and medium-sized innovative companies and the nurturing of suppliers;
    • Establishing institutions that facilitate the emergence of a broad stratum of high-tech "mid-tier economy" comprising small and medium-sized engineering and technology businesses. Institutional forms that will ensure a "flow of new markets" will include programs for scaling new technologies, import substitution initiatives, demand stimulation for innovative products and technologies, as well as the updating of regional construction norms and state procurement standards for research and development, among others;
    • Developing a state innovation policy (the role of the state) as a significant direction for creating favorable economic conditions for innovative activity, which entails prioritizing funding for fundamental research and exploratory R&D, along with organizing state orders for conducting R&D in accordance with the State Scientific and Technological Program;
    • Stimulating the entry of large companies into high-tech markets through projects that commercialize accumulated engineering knowledge and competencies, the majority of which are currently concentrated in mature manufacturing sectors, by establishing corporate venture funds, competency-building programs for innovative entrepreneurship, and retraining and reskilling initiatives for small and medium-sized innovative companies;
    • Achieving a "flow of innovative projects" through the support of corporate and university programs aimed at developing ecosystems around scientific and technological entities, corporate business incubators, school and university acceleration programs, as well as funding initiatives for early-stage scientific developments.

To implement innovative activity, it is necessary to formulate a concept for the realization of technological entrepreneurial projects, encompassing:

  1. The development of a creative environment for engineering and technological entrepreneurial projects through the establishment of innovative zones within urban and industrial settings: third-generation supplier technoparks situated in areas of accelerated socio-economic development; open innovation campuses with a modern ecosystem for serial startup production; supplier industrial parks; creative quarters in regional cities aimed at cultivating a creatively innovative environment for the realization of innovative business projects, and so forth;
  2. Bringing innovation infrastructure entities to operational profitability through market specialization and partnerships with business leaders in the field of innovative services; developing nanotechnology centers as elements of a network of nano-centers that generate technological companies; implementing a new strategy for business incubators as networked support institutions; supporting commercial (corporate) business incubators; advancing networking forms of organizing regional engineering centers; developing venture financing tools in collaboration with industrial partners; and executing a unified "roadmap" for the development of innovation infrastructure with defined functions and regulated activities, leading to the formation of a balanced innovation ecosystem designed based on scientific and technological strategy;
  3. Formulating a strategy for industrial enterprises oriented towards the values of science, which are paramount in the operations of R&D departments, determining the scientific intensity of products—a metric that quantitatively assesses the share of R&D expenditures in the product's value. The innovation cycle constitutes a complex of work encompassing the main stages and outcomes of the innovation process;
  4. Conducting exploratory R&D to propose and substantiate ideas for new methods of satisfying societal needs, executing applied R&D and design work to materialize scientific knowledge into new products, and facilitating the technological adaptation of large-scale production for commercialization;
  5. Cluster activation of regional economies (the emergence of developing technological company clusters that exhibit flexibility to external market dynamics and are highly responsive to the conditions of regional institutions, which will shape new specialization sectors within the "knowledge economy");
  6. Active marketing of the country’s innovative ecosystem to attract external resources into development projects.

Thus, the concept of innovative development constitutes a synthesis of ideas, principles, approaches, and models that concentrate on the cultivation of a developed human capital, the formation of advanced research, development, and innovation centers, and the establishment of a globally competitive higher education system. It aims to create a conducive environment for the advancement of innovative entrepreneurship and investment in innovation infrastructure, which will serve to foster conditions for the innovative growth of the economy, characterized by the following indicators:

  1. An increase in the share of industrial enterprises engaging in technological innovations, reaching no less than 30% of the total number of industrial enterprises by the year 2030;
  2. An augmentation of high-tech goods and services—encompassing sectors such as aerospace and information technologies, nuclear technologies, new materials, biotechnologies, and advanced manufacturing technologies;
  3. A rise in the share of innovative products produced by enterprises within the gross regional product, accompanied by an increase in the proportion of high-productivity jobs within these enterprises.

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