Sustainability, Technology and Innovation 4.0 1032025905, 9781032025902

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Sustainability, Technology and Innovation 4.0

Sustainability, Technology and Innovation 4.0 is a holistic perception and analysis of innovation at the level of public organisations, innovation in industry and innovation in HR. Its chapters collectively present a thesis that Innovation 4.0 signals a technological revolution that has the opportunity to prevent environmental degradation and, in particular, to stop climate warming, the effects of which may disrupt the process of sustainable development. Uniquely, this edited book offers a comprehensive and multi-faceted examination of Innovation 4.0, fulfilling methodical, empirical and utilitarian goals. The methodological objective is to present tools that allow the identification, analysis and assessment of the relationship between Innovation 4.0 and inspiration that will carry society towards a new economic and social order. Its empirical aim is to enable the analysis and evaluation of the role of public organisations, innovation in industry and innovation in HR in the process of building sustainable development of the global environment. The book’s utilitarian goal is a recommendation for global organisations of Innovation 4.0 as an instrument to stimulate an innovative economy. This is a high-level research book aimed at postgraduates, MBA students, researchers and academics from business colleges and universities, and may also provide a valuable strategic perspective for business executives. Zbigniew Makieła is a Professor at the oldest Polish university, Jagiellonian University, and is the Head of the Organisation and Management Department. A member of the Polish Economic Society and the Polish Academy of Sciences of Kraków, he is a Polish economist specialising in innovation management and entrepreneurship. Magdalena M. Stuss is an Assistant Professor at Jagiellonian University. She is also a coordinator and supervisor within the frameworks of international programmes for students. Magdalena has written and participated in writing more than 100 scientific dissertations (scientific monographs, chapters and articles). She has participated in 37 research projects, both domestic and international, and conducted lectures, as well as scientific research in nine foreign universities. Ryszard Borowiecki is a Professor and an honoris causa doctor of several universities. He is a research worker in the Faculty of Applied Sciences of Akademia WSB in Dąbrowa Górnicza, Poland. He is the author, co-author and editor of almost 600 scientific publications concerning functioning, privatisation, restructuring and the valuation of business entities. His scientific interests also cover areas such as economic analysis and diagnosis, strategic and operational management, entrepreneurship, innovativeness and the globalisation of business units.

Routledge Studies in Innovation, Organizations and Technology

How is Digitalization Affecting Agri-food? New Business Models, Strategies and Organizational Forms Edited by Maria Carmela Annosi and Federica Brunetta Social Innovation of New Ventures Achieving Social Inclusion and Sustainability in Emerging Economies and Developing Countries Marcela Ramírez-Pasillas, Vanessa Ratten and Hans Lundberg Sustainable Innovation Strategy, Process and Impact Edited by Cosmina L. Voinea, Nadine Roijakkers and Ward Ooms Management in the Age of Digital Business Complexity Edited by Bill McKelvey Citizen Activities in Energy Transition User Innovation, New Communities, and the Shaping of a Sustainable Future Sampsa Hyysalo How Ideas Move Theories and Models of Translation in Organizations John Damm Scheuer Managing IT for Innovation Dynamic Capabilities and Competitive Advantage Mitsuru Kodama Technological Change and Industrial Transformation Edited by Vicky Long and Magnus Holmén Sustainability, Technology and Innovation 4.0 Edited by Zbigniew Makieła, Magdalena M. Stuss and Ryszard Borowiecki For more information about this series, please visit: www​.r​​outle​​dge​.c​​om​/Ro​​utled​​ge​St​​udies​​-in​-I​​nnova​​tion-​​Organ​​izati​​ons​-a​​nd​-Te​​chnol​​ogy​/b​​ook​-s​​eries​​/RIOT​

Sustainability, Technology and Innovation 4.0

Edited by Zbigniew Makieła, Magdalena M. Stuss and Ryszard Borowiecki

First published 2022 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2022 selection and editorial matter, Zbigniew Makieła, Magdalena M. Stuss, and Ryszard Borowiecki; individual chapters, the contributors The right of Zbigniew Makieła, Magdalena M. Stuss, and Ryszard Borowiecki to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record has been requested for this book ISBN: 978-1-032-02590-2 (hbk) ISBN: 978-1-032-02591-9 (pbk) ISBN: 978-1-003-18406-5 (ebk) Typeset in Times New Roman by Deanta Global Publishing Services, Chennai, India

Contents

List of Figures viii List of Tables xi Contributors xiii Introduction xix PART 1

Innovations in the public sector 1

Innovative university 4.0: The academic entrepreneur in an innovative university

1 3

ZBIGNIEW MAKIEŁA

2

The impact of innovation 4.0 on higher education

24

AGNIESZKA HERDAN

PART 2

Innovation in the industrial sector

45

3

47

Prerequisites of innovativeness in industry 4.0 ZBIGNIEW MAKIEŁA AND TOMASZ KUSIO

4

Economic and institutional aspects of Industry 4.0 in Poland

64

RAFAŁ WISŁA AND MICHAŁ WŁODARCZYK

5

Challenges for the development of the principles of Industry 4.0 in the context of occupational security and safety – selected conditions JOLANTA MAROŃ

84

vi Contents PART 3

Regional innovation systems

101

6

103

Regional innovation in the example of Małopolska TOMASZ KUSIO

7

Transformation in the management of municipal space in the age of Industrial Revolution 4.0: From building infrastructure to creating a friendly business space

123

JERZY ROSIŃSKI

PART 4

SME innovations

139

8

141

Innovation 4.0 in developing SME strategy JOANNA DZIEŃDZIORA AND MAŁGORZATA SMOLAREK

9

Open innovations in the hotel chain: A new value chain co-created with clients: the Poland case study

161

MIECZYSŁAW MORAWSKI AND URSZULA BĄKOWSKA-MORAWSKA

PART 5

Human innovation

191

10 Human resource management 4.0

193

IZABELA STAŃCZYK AND MAGDALENA M. STUSS

11 Competencies in times of innovation 4.0

213

ANETA KUŹNIARSKA

PART 6

Knowledge and innovation

235

12 Ecological innovations

237

AGNIESZKA THIER

Contents  13 Knowledge and innovation 4.0 in today’s electromobility

vii 256

RADOSŁAW MIŚKIEWICZ

PART 7

Quality in innovation

277

14 Innovation 4.0 – on the path to modernity, higher effectiveness and quality

279

RYSZARD BOROWIECKI AND BARBARA SIUTA-TOKARSKA

15 Shareholders in creating the value of IT sector companies by shaping organisational culture in the context of the digital economy

304

KATARZYNA SZCZEPAŃSKA-WOSZCZYNA, WOJCIECH MURAS AND MARTA PIKIEWICZ

16 Evolution of management towards Innovation 4.0 during the COVID-19 pandemic

317

ZBIGNIEW OLESIŃSKI AND AGNIESZKA RZEPKA

Index 335

Figures

2.1 2.2 2.3 3.1 3.2 3.3 4.1 5.1 5.2 5.3 6.1 6.2 6.3 7.1 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 9.1

Course redesign outcomes for faculty participants Media used in blended learning Challenges in the efficient adoption of blended learning Relations between organizational change and innovation Model of process of development of entrepreneurship via creativity and innovation Forms of open innovations according to Dahlander and Gann Intensity of the robotisation in industries of European countries – number of machines to 10,000 workers (in 2014) How would you like to use data and/or analytics to improve your safety performance in the future? The ranking of values of safety technology Safety technology roadmap ranking in Industry 4.0 Sources of location advantage model (diamond) Types of network links The relative strengths of Małopolska compared to Poland and the EU Proposed four-factor business model for SMEs operating in the leisure industry The scale of novelty of the implemented innovation Types of innovations introduced in SMEs Character of the introduced innovation versus its type Innovation strategy versus size of SME Innovation strategies by criterion of activity versus the company’s size by the number of employees Innovation strategies by criterion of novelty versus the company’s size by the number of employees Strategies of open innovations versus size of the company by the number of employees Barriers of establishing cooperation by SMEs with business partners and R&D institutions Limitations in implementing innovations in SMEs Do you agree with the statement that senior clients have specific needs and expectations in relation to other client groups in contacts? Source: Own study

33 34 35 49 51 57 76 90 92 92 111 113 116 133 149 150 150 151 152 153 153 154 155 168

Figures  9.2 What specific needs and expectations do senior clients have, in your opinion? 9.3 Are your specific needs and requirements met at the hotel unit you are currently staying at? 9.4 Would you be ready to present your own ideas for improving the stay in the hotel for senior clients if the management of the hotel were to express this interest? 9.5 Which of these factors would encourage you to get involved in creating ideas that would improve the offer for senior clients? 9.6 What ways of collecting ideas, comments, ratings and opinions of senior clients should your host hotel use? 9.7 What barriers may occur in the active involvement of senior clients in creating ideas? 9.8 What are the benefits of including senior clients in contributing to hotel innovation? 9.9 Can this hotel be described as innovative, introducing new solutions every year? 9.10 What is the share of these entities in coming up with hotel innovations? 9.11 Which external entities are an important source of innovation for the hotel? 9.12 Which elements of the customer service process are improved under the influence of customer opinions and ratings? 9.13 What are the ways of collecting customer opinions/ratings about the stay? 9.14 What other, unconventional ways of collecting ideas from senior clients would be worth implementing in a hotel? 9.15 What are the barriers to collecting ideas from senior clients? 9.16 How can senior clients be encouraged to co-create new solutions? 9.17 What is different about the expectations of senior clients? 9.18 What are the benefits of including senior clients in contributing to hotel innovation? 9.19 A model of co-creating innovation with 65+ clients 10.1 Evolution of personnel function. Source: Own analysis 11.1 Innovative potential of an enterprise 11.2 Relation of creativity, creative output and innovativeness 11.3 Set of necessary competencies in innovations 13.1 Drivers of the modern economy 13.2 Determinants of knowledge and technology transfer 13.3 ENEA Operator’s operational area 14.1 A change in the business model in firms in the context of Innovation 4.0 14.2 Innovation 4.0 14.3 On the path to Innovation 4.0 14.4 Interrelated components of the technological system in Economy 4.0 14.5 Transforming Industry 4.0. by technologies

ix 168 170 171 171 172 172 173 174 175 176 177 178 178 179 180 181 181 186 194 216 224 226 257 260 264 280 281 282 285 286

x Figures 14.6 3E principle in the interpretation of R. Borowiecki and B. SiutaTokarska 14.7 Typology of effectiveness 15.1 The flow of tasks in the training (prognostic) model for the research variables of shareholder relations (tasks) and the effectiveness of value creation 16.1 Model of creating an innovative environment 16.2 Networks of innovative organisations 16.3 A model of factors accelerating the formation of teal organisations 16.4 Innovation ecosystem 16.5 Type of cooperation undertaken with external entities 16.6 The biggest challenges in connection with the COVID-19 pandemic

294 295 314 318 324 325 326 327 329

Tables

1.1 Channels of commercialisation of knowledge 4.1 Basic data regarding economic entities in industry by ownership sectors and forms of ownership 4.2 Sold production concentration coefficients in industry by sections and divisions (in current prices) 4.3 Indices of output of industry 4.4 Investment outlays in industry 4.5 Internal expenditures on R&D activity and research equipment (current prices, in million PLN) 4.6 Employment in research and development activity in manufacturing divisions 4.7 Indices of labour productivity in industry measured by gross value added per employed person 4.8 Means of automating production processes in industry 4.9 Means of automating production processes in industry (in 2014) 4.10 Number of domestic enterprises which purchased/sold technologies in Poland 5.1 Comparison of the current approach to OSH management with the proposed one 5.2 Hierarchy of occupational risk management measures – a new approach 6.1 A comparison of the indicators included in the European Innovation Scoreboard and the Regional Innovation Scoreboard 6.2 Data highlighting possible structural differences 6.3 Normalised scores per indicator and relative results compared to Poland and the EU 7.1 Description of conducting business activity by the Norwegian Fisheries Museum in Bergen as an organisation representing the leisure industry – allocation in four categories 8.1 Characteristics of the research sample 11.1 Basic competencies 11.2 Chosen definitions of innovative competencies 11.3 Elements of innovative competencies

11 68 69 69 69 70 71 71 72 73 77 86 91 109 116 117 129 148 218 220 222

xii Tables 12.1 Number of enterprises that obtained certificates in 2013 and 2014 (in thousands) 12.2 Share of industrial enterprises that obtained environmental benefits in 2012–2014 (%) 12.3 Consumption of primary energy carriers in Poland in 2000–2016 12.4 Structure of renewable energy production in Poland in 2000–2016 12.5 Share of energy obtained from renewable sources in production and total energy consumption in Poland (%) 13.1 Regulatory charging points in the ENEA Operator’s operational area 13.2 The scope of organisational and financial activities in Szczecin’s development plans 13.3 Structure of means of transport in Szczecin (in 2019) 13.4 Ranks of electromobile cities within the ENEA Operator’s operational area 14.1 The division of organisational innovation in a firm from the point of view of organisatorics 14.2 From Marketing 1.0 to Marketing 4.0 – conditionings and characteristics of firms 15.1 Overview of the results of empirical studies carried out using the Delphi method

245 245 246 248 249 265 266 267 267 287 289 312

Contributors

Urszula Bąkowska-Morawska is the vice president of the Interferie S.A. hotel chain located in Poland, by the Baltic Sea and in the Sudety Mountains. Moreover, she is an assistant professor at Wrocław University of Economics. She is the author of over 40 publications in both Polish and foreign academic journals, such as: “Offer development for clients aged 55–70” (Proceedings of 14th International RAIS Conference on Social Sciences and Humanities held at Princeton, 2019), “Barriers in knowledge sharing vs. the ability to create tourism supply chains” (Proceedings of the 15th European Conference on KM, Polytechnic Institute of Santarem, 2014), “Ecological approach among hospitality services managers in the Karkonosze Mountains: The identification of activities reducing negative environmental impacts” (Elsevier Procedia Social and Behavioral Sciences, 2014) and “Model partnership and the development of resilience in the tourism supply chain” (Carpathian Logistics Congress – Congress Proceedings, 2013). She is also currently working on the concept of the creation of a large cluster of spa companies, offering preventive healthcare services based on natural resources in southwestern Poland. Joanna Dzieńdziora is a Doctor of Economics in the area of management studies with a speciality in human resources management. She is an Assistant Professor in the Department of Management, a Doctoral Seminar Coordinator WSB University and a graduate of the Management Department of Częstochowa Polytechnic. She graduated from the Polish-German Studies programme “Modern Management of Human Resources” organised by the Center of Management Improvement-CEDOZ and Internationale Berufsakademie Berlin – IBA. She is the author of numerous articles and essays concerning the management of enterprises and human resources management, and is a longterm employee of public administration. Her research interest concentrates on subjects concerning the human resources management of small and medium enterprises and the role of women in management. She is a member of the Polish Professional and School Advisors Association, the Polish Economic Association in Katowice and the European Association for Security in Cracow, TNOiK in Dąbrowa Górnicza.

xiv Contributors Agnieszka Herdan is a champion and innovator of new technology in HE; she strives to improve students’ experiences by providing inclusive tailored learning environments that promote excellence to benefit students both at Greenwich and their TNE partners. She is a Senior Fellow of the Higher Education Academy (HEA) and has a CMBE with the Chartered Association of Business Schools (CABs). She is an active researcher into blended learning and her great passion is to improve student experience and graduate employability. She set up the Accounting and Finance Alumni Mentoring Scheme. She has lectured in the UK, France, Poland and across Malaysia and China. Tomasz Kusio is an Assistant Professor in the Economic Policy and Development Programming Department at the Cracow University of Economics. His research interests focus on innovation and development of profit and non-profit organisations as well as inter-organisational relations. Apart from his research interests, he is also engaged in EU-funded projects coordination and realisation. Aneta Kuźniarska is a PhD in management and quality at the Jagiellonian University in Krakow. Her research interests focus on the topics connected with human resource management, with particular research in the area of sustainable personnel and green HRM. Jolanta Maroń is an Associate Professor in the International Management Department at the Cracow University of Economics, a Business English Coach and Mentor and a translator at AGH Cracow and the Jagiellonian University. She is a tutor and manager of Europejski Projekt Edukacyjny, established as EU Project Hub. Her teaching and research interests include corporate leadership, strategic management, international management and OBOR logistics. Radosław Miśkiewicz is a Professor at the Silesian University of Technology. He professionally combines business and research activities, hence his scientific interests pertain to: The process of formation of metallurgical enterprises’ organisational structures along with their vulnerability to mergers; knowledge transfer to industrial enterprises and its management in the view of building enterprises’ competitiveness; potential for integration of metallurgical enterprises in terms of transfer of innovative technologies arising from Industry 4.0 Logistics 4.0. He has an impressive academic achievement comprising over 60 items. He acts as head or chair of steering committees (an expert) on numerous projects implemented by production enterprises, and in terms of international cooperation, as a consultant/scientific patron or expert, he implements, individually or in networks or scientific consortia, eight research grants, including: “Enhanced exploration,” EIT Raw Materials KAVA Upscaling Projects. He has received numerous awards, including: Team Award IIº of the Rector of the Silesian University of Technology in 2018 for the research paper “Organisational Structure in the Process of Integration on the Example of Iron and Steel Industry Enterprises in Poland,” Warszawa Difin 2017; and in 2017 he was twice-awarded by the Scientific Council of Poltava University of Economics and Trade for the paper “Organisational Structure in the Process

Contributors 

xv

of Integration on the Example of Iron and Steel Industry Enterprises in Poland” and by the Scientific Council of Institute of Industrial Economics of the National Academy of Sciences of Ukraine for “Knowledge transfer in merger and acquisition processes in the metallurgical industry.” In 2018 he won a special award of Wydawnictwo Naukowe PWN (Polish Scientific Publisher) for “Gospodarka współdzielenia. Wybrane problemy” (“Sharing economy: Selected problems”). In 2019 he was honoured by the Minister of Science and Higher Education with an individual award for the paper “Organisational Structure in the Process of Integration on the Example of Iron and Steel Industry Enterprises in Poland: Process Digitisation in the Industry 4.0 Concept.” Mieczysław Morawski is a full professor of Management Science at the Warsaw University of Technology, Poland. His research focuses on the personal aspect of KM, human capital management, intelligent organisations and innovative business model in the tourism sector. He has published more than 140 scientific papers and 14 books and been a promoter of four completed PhD dissertations. He is the author of such items as “The Environment of Professional Activity for the Key Knowledge Workers” (Proceedings of 14th International RAIS Conference on Social Sciences and Humanities held at Princeton, 2019), “Model of Cooperation in the Network of Non-Enterprise Organisations on the Example of Regional Tourism Organisations in Poland” (co-authorship, University of Szczecin 2018), “Business model used in companies representing creative industries” (Emerald Publishing Limited, Bingley, United Kingdom 2017), “The Model of Organisation Totally Oriented to Knowledge” (Journal of Modern Education Review 2017) and “How to Manage Knowledge Workers in Creative Industries” (Proceedings of the 17th ECKM, Ulster University, Belfast 2016). Wojciech Muras is the co-founder and CEO of Net-o-logy, an IT company rated among the IT Top 100 in Poland. He is an active participant in expert debates for leading Polish publishers in the scope of IT–business relations. He specialises in the areas of value-based management in the IT sector. Marta Pikiewicz is a BA Student in Corporate Finance and Accounting at the Cracow University of Economics. Jerzy Rosiński is a Professor of Business Management at the Jagiellonian University in Krakow. He is the Director of the Institute of Economics, Finance and Management. In his research work, he is focused on HRM in ICT market organisations and the consequences of information technology applications for the functioning of consumers. He worked as a management consultant in the position: Expert in building systems for assessment and competence development (Talent Bank – project for National Bank of Poland in 2005–2009; and also other projects in this field between 2012 and 2019: WeLearning; Educational Leadership; Praxis/Praxis II, Jagiellonian Centre for Competence Development; coordinator of entrepreneurship projects integrating management knowledge and information technology (DIMA, EEDW in 2009–2016).

xvi Contributors Agnieszka Rzepka is a professor at the Lublin University of Technology, Faculty of Management at the Department of Economics and Economic Management. She specialises in inter-organisational management, intellectual capital, selfmanagement and SMEs. Her current research focuses on teal organisations. She is the author of 135 papers, including seven proprietary and collective monographs such as Inter-organizational relations and intellectual capital as factors for the development of micro and small enterprises: A study of Polish and Georgian enterprises (Difin, 2018), and co-author of Inter-organizational management in agile enterprises (Texter, 2017) and Inter-organizational networks of economic cooperation on the example of Poland, Canada and Georgia (Texter, 2016). Zbigniew Olesiński is a full professor at the Vistula Academy of Finance and Business in Warsaw. He specialises in inter-organisational management, interorganisational networks, clusters and globalisation problems. He participated in 11 research programmes, of which he managed four projects financed by the National Science Center, and in 13 European Union research grants, of which he managed two. He is the author and co-author of 206 publications, including 14 books such as Inter-organisational relationship management (C.H. Beck, 2010) and Regional management: Poland–Europe–World (Difin, 2005). He is the scientific editor of the monograph Components of teal organisations (Difin, 2020). Małgorzata Smolarek is a Doctor of Economics in the field of management studies with a speciality in enterprise and management of small and mediumsized businesses. She is a graduate of the Management Faculty at Technical University in Częstochowa, in the field of study of marketing and management – enterprise management and organisation. She completed the Polish– German study course “Modern Human Resources Management” organised by Centrum Doskonalenia Zarządzania (Centre for Management Development) and Internationale Berufsakademie Berlin – IBA (International University of Cooperative Education). She is an Assistant Professor at Humanitas University. She is also an academic teacher in postgraduate studies and the author of many articles and papers in the fields of business management, strategy, human resources management and enterprise. Her research interests focus on the issues connected with small and medium-sized business management and the role of women in management. Barbara Siuta-Tokarska is a professor at the Cracow University of Economics. She is a research worker in the Department of Economics and Organisation of Enterprises Development in CUE. She is the author and co-author of more than 150 scientific works on functioning and development of SMEs, sustainable and permanent development of economy and enterprises, evolution of management science and innovation and management development. She is the author of six books in the field of development of small and medium enterprises and sustainable development in micro- and macro-scale of economy.

Contributors 

xvii

Izabela Stańczyk is an Associate Professor at Jagiellonian University, Institute of Economics, Finance and Management, Department of Human Resources Management, Poland. Her areas of scientific interest focus on issues related to human resource management, with particular emphasis on employment formation in enterprises, employment restructuring, competence management, personnel consultancy and perception of organisational support. She is the author of books and articles in this field in the Polish and international areas. Katarzyna Szczepańska-Woszczyna is an Associate Professor and the ViceRector of WSB University. She has conducted research that contributes to the achievements and development of HRM, managerial competencies, corporate culture, innovation management and the organisational context of the influence of competencies on innovations. She is a member of the board “Excellent Science” at the Ministry of Science and Higher Education (Poland) and of the Polish Accreditation Committee for the term 2020–2023, appointed by the Minister of Science and Higher Education, as well as of the Regional Labour Market Board. She was appointed the Assessor in the Ministry of Science and Higher Education within the framework of the Science Operational Programme Human Resources Development as well as the Expert of the Ministry of Regional Development. She has organised ventures that inspired the cooperation between science and business aimed at the development of the region. The result of the author’s scientific activity is over 100 scientific works published. Agnieszka Thier holds a PhD in Economics and is an Associate Professor at the Institute of Economics and Corporate Organisation at the Cracow University of Economics. The focus of her research work is on the economics of environmental protection and water management, as well as the management of family businesses, tourist agencies and public organisations within the context of sustainable and sustained development. She is an author and co-author of more than 70 scientific publications, both on the domestic as well as international market. Rafał Wisła is a Professor of Economics at the Department of Economics and Innovation of the Jagiellonian University in Krakow (Poland). He is the author of over 80 academic publications, such as Innovation in the Pharmaceutical and Medical Technology Industries of Poland (2018), Developmental Diversification of Contemporary Europe (2016) and Regional Patterns of Technology Accumulation in Central and Eastern Europe Countries (2014). Recently, has co-edited and contributed to Economic Transformation in Poland and Ukraine (Routledge, 2020, October). He is a Doctoral Program Coordinator in Economics and Finance at Jagiellonian University (2019–2023) and a Deputy Director of the Institute of Economics, Finance and Management of the Jagiellonian University (2016–2020). He is an expert of a task force for the preparation of the 2013–2020 Małopolska Regional Innovation Strategy. The issues which he deals with are technological changes and innovation activity from a regional perspective.

xviii Contributors Michał Włodarczyk is a doctoral student at the Faculty of Management and Social Communication at the Jagiellonian University in Krakow (Poland). He is the author and co-author of academic publications in the field of financial innovations, new technologies and the fintech sector, such as Between social responsibility and potential profit: The technological giants’ dilemma (2018) and Financial clusters and fintech agglomerations – location factors (2020). He is also a co-founder of Stać Mnie, a scientific YouTube channel, focused on financial education and popularising economics among young people.

Introduction Zbigniew Makieła and Magdalena M. Stuss

Highly developed countries, while also those aspiring to reach that level in the future, are currently investing in initiatives that support advanced production, as well as searching for and creating innovation while also planning the globalised world. The conviction is becoming more widespread that in the future smart factories and smart production shall become the norm. This monograph is a holistic perception and analysis of the problematic issues of innovations, both in a theoretical and a practical dimension. On the basis of a broad section of literary works, the lack of a comprehensive and multi-faceted deliberation on the aspects of 4.0 innovations was noted. The guiding objective of the authors of this work was the identification, analysis and evaluation of the dependencies between 4.0 innovations as the inspiration in the direction of a new economic and social order in the process of building sustainable growth in a global environment. Answers to questions were sought in terms of how to undertake actions at present and in the future that are aimed at stimulating the innovative economy. This book is a monograph of multiple authors, which has been prepared by scientists of renowned Polish and English universities. In the proposed chapters, the authors availed of sophisticated research methods, thus combining the theoretical section with research, which is the outcome of many years of joint research work. The problematic issues of 4.0 innovations have been divided into seven areas of aspects. In the first section, entitled “Innovations in the Public Sector,” a focus was placed on introducing the impact of 4.0 innovations on higher level education, while also the model of a 4.0 innovative university. The ways of adjusting to the new challenges for higher education have been identified, which are the effect of the changing expectations of both students, as well as the employees of universities. Likewise, the concept of a new model of university has been touched on, namely the so-called innovative university – the changing principles of managing universities. The development within the framework of the technologies of learning offer higher education institutions the possibilities of planning new scientific, educational and business experiences. The second section, entitled “Innovation in the Industrial Sector,” is an analysis of innovativeness in an individual dimension in Industry 4.0 by means of such aspects as the need for cooperation, analysis of profitability, or the mechanisms

xx Introduction of financing innovation. Indeed, Industry 4.0 is the new paradigm of production which leads to a faster and more precise process of taking decisions, while also a completely new approach to production, the organisation of work and also the way of executing work tasks, which in turn may have a significant impact on the health and safety of employees. The concept has been verified by empirical research that describes the processes of the transition of the Polish economy to a further stage of industrialisation and economic growth in the context of the EU. The subsequent section of the monograph is entitled “Regional Innovation Systems.” Territorial innovativeness is first and foremost referred to with regard to the state, albeit the regional context has a particular and increasingly greater significance with relation to the processes of the dynamics of innovation observed, which find their territorial reference in that of the region itself. Interest in the aspects of innovation associated with modern urban areas (smart cities) is related to the processes of a global nature, as over half of the world’s population live in urban areas. In the fourth section entitled “SME Innovations,” the relation between innovation and maintaining an enterprise on the market has been identified with particular mention given to the hotel industry. Small and medium-sized enterprises are interested in the implementation of innovations, albeit numerous barriers have an impact on the fact that relatively few firms have implemented changes of an innovative nature. “Human Innovation” is the illustration of how Industry 4.0 is changing the process of managing human resources by implementing such methods and tools as talent management, HR Business Partners, e-HRM and HRM 4.0. One of the most important changes in the 4.0 model is the attempt to indicate the competencies of employees who play a significant role in building innovative firms or are sought after from the viewpoint of the perspective approach to management. The appropriate management of human capital gives enterprises the possibility of enhancing the level of competitiveness, while simultaneously facilitating the acquisition of greater innovative abilities. The concepts of the market economy were shaped in the 21st century and the solutions of Industry 4.0 were implemented alongside the traditional factors of economic growth that takes account of knowledge to an increasingly higher degree. The sixth section entitled “Knowledge and Innovation” is a review of the varied approaches to the use of knowledge in the processes of implementing innovations. The concepts and manifestation of ecological innovations are of significance in terms of mitigating the negative impact of the manufacturing and services processes on the natural environment and also the impact on society in the spirit of ecology. However, the emergence of the megatrend of electromobility has evoked a range of political and legislative initiatives that facilitate the process of technological innovations. The final section entitled “Quality in Innovation” refers to the problematic issues of efficiency and quality in the context of the dilemmas and challenges in the economy of the 21st century. The creation of the value of a company by the shareholders is an important issue for the companies operating in the sector of

Introduction  xxi modern technologies. This is of particular significance for companies in the innovative sectors in the context of the digital economy. Likewise, the most current aspects such as how useful the new tools and methods of management are in times of the pandemic of the coronavirus have been formulated. 4.0 innovations serve the expansion of the institutionalisation of innovations in the business environment and also the development of the network of inter-organisational cooperation that favours the creation of the soft factors of management, while also the shaping of the agility of the innovative environments of organisations and advocating the use of IT tools. The subject matter in this monograph lies within the field of social sciences in the spheres of economics, management, social policies and economic policies. 4.0 innovations indicate a technological revolution that has the opportunity to prevent the degradation of the natural environment and in particular, to halt the climate warming whose effects may disrupt the process of sustainable growth. The contents stipulated in this book are an opportunity to make the reader aware that the currently preferred paths of economic growth are heading towards a blind alley of inability in terms of contemporary civilisation. The issues touched on in this monograph are universal in terms of their international scope. They are aimed at scientific employees from universities world wide, including PhD titled employees, students and managers of creative sectors and also organisations that support innovative technologies at local and global levels. This book is an example of the combination of theoretical knowledge and research. It illustrates the areas of cooperation stipulated in the concept/model/ integrated system of a triple and quadruple helix. The proposed subject matter of the monograph is of a universal and interdisciplinary nature, which is of international significance. This is particularly widespread in highly developed countries from social and economic viewpoints, while also developing countries that place economic growth on the basis of modern technologies from the environment of 4.0.

Part 1

Innovations in the public sector



1

Innovative university 4.0 The academic entrepreneur in an innovative university Zbigniew Makieła

Introduction The contemporary model of society encourages universities to change the model of the concepts of education and upbringing used so far, while also the transfer and marketisation of knowledge. The development of science, techniques and universality of IT technologies has accelerated the transformation of social structures and the IT society being shaped that expects educational changes. The processes of globalisation have accelerated the progress in scientific research, which forces the immediate transfer of innovations to the market, which is followed by a change in the management of the university. The employees, students, PhD students and graduates of the university are the authors and participants of the new product solutions, while process, organisational, marketing and ecological solutions are also transferred to the economy. The new management of the university has encompassed the commercialisation of knowledge, whereby the aforementioned actors, together with the university, participate in business activities and successfully create an innovative enterprise. The educational process is changing, and the preparation of students for conducting business activities and professional work is gaining high importance. There is a necessity for the constant enhancement of the quality of education with a focus on practices, whereby a student participates in discussion classes, tutorials and professional practices to a higher degree.

Literary review and preparation of hypotheses In the Polish academic environment, there is a constant discussion about the future model of the university, which is described as innovative, or as the University of the Third Generation. There is a conviction among researchers that the Humboldt model, based on didactic functions and scientific/research activities, deviates from the expectations of the business and scientific environments, while also failing to meet the expectations of students in particular. There is a justified expectation of an innovative university, which would execute interdisciplinarity and transdisciplinarity (the departure from the rigid division of sciences, which favours creativity) and intensified contact with society, including the business world, private DOI:  10.4324/9781003184065-1

4  Zbigniew Makieła firms, corporations and other research and educational centres (Kwiek, 2010; Leja, 2013; Gorzelak, 2009; Apple, 1989). In the new model of the innovative university, the added value is the consistent building and participation in network structures, while also the implementation of new methods of management and the transfer of research results to the economy (Makieła, 2017, p. 24). The networking of the university constitutes strong and long-lasting ties with social entities, business organisations, enterprises, corporations and research centres, but also educational and local government centres. Network structures open a network space of the commercialisation of knowledge, which favours the autonomy of the financial activities of the university and by way of consequence, financial independence. This signifies the fact that capital-intensive scientific research in its prevalent scope shall be financed by entities that are legally bound to the university (e.g. spinoff firms). The strategies of an entrepreneurial university are oriented towards scientific activity and the entrepreneurship of the scientific employees, PhD students, students and graduates. The university is becoming a centre for the flow of know-how, while also a place for arousing academic entrepreneurship and technology transfer (Lichtenthaler, 2012, pp. 851–859; Varga, 2009, p. 129; Park et al., 2015, p. 329). The fulfilment of the criteria for the functioning of the innovative university is the acceptance of the leading priorities based on the universality of academic entrepreneurship (Kwiotkowska, 2011, pp. 158–171). University entrepreneurship is conditioned by a multitude of factors, of which the level of autonomy is particularly important, as well as the awareness of that environment with regard to the benefits of common entrepreneurship as the prerequisites of the level of competitiveness of the university in question (Andrzejczak, 2015, p. 123–125; Popławski et al., 2013, p. 60; Andretsch, 1995). Contemporary social and economic phenomena, but also technological innovations, entrepreneurship and the role of territorial local government all have an impact on the level and quality of research in terms of the science of management (Czakon, 2013). In this process, the most significant role is played by universities that both compete and cooperate in their search for innovative resources. The effects of these ties are symptomatic for all the stakeholders, which change the principles of their functioning, while also shaping their new functions and changing the features attributed to them. Simultaneously, the fulfilment of the expectations of all the groups of recipients of academic services would seem to be impossible even if the requirements of the methodological rigour were to be reduced (Audretsch, 1995, pp. 3–5). At the same time, one of such dilemmas is the occurrence of cooperation and competition between these same organisations, which is termed competition (Ritala, 2012, pp. 307–324). The level of significance of competition in terms of network cooperation may be found in the deliberations of Czakon (2013, p. 13), who indicates that “competition as a dynamic weave of cooperation and competition is an appreciative, while also promising research subject. It brings both intellectual challenges associated with the paradoxical nature of the phenomenon and indicates significance for business

Innovative university 4.0  5 practices” and should be utilised in research on the management of an innovative university (Buenstorf, 2009; Trow, 2003). As previously mentioned, the flow of knowledge from the university to the economy takes on various forms, ranging from formal cooperation in the field of research to consulting and informal personal ties (Varga, 2009, p. 382). A particularly important entity in this process is that of an academic enterprise of the spin-off type, which is an important channel in the flow of knowledge that is commonly accepted by the college environment, enterprises, local government, social entities and the inhabitants themselves (Bonacccorsi, 2005). The academic executive entity for the formation of this type of enterprise is the form of the “academic entrepreneurs” that have inspired, supported and created the entrepreneurial activities of the academic community for many years in the American culture and British universities (Etzkowitz, 1983, pp. 198–233). The notion of the American entrepreneur is the core of the American university research system (Franzoni and Lissoni, 2009, pp. 163–190). The American and British research systems have been shaped by many centuries of traditions of entrepreneurship, whose meaning is not only based on involvement in scientific research but also, perhaps first and foremost, in terms of activities that are typical of entrepreneurial managers (Audretsch and Stephan, 1989). Academic scientists/entrepreneurs must acquire the funds in order to create and maintain their laboratories and finance the employment of assistants, while also becoming involved in network cooperation with the aim of acquiring additional resources. The network cooperation is an attractive channel of know-how, the exchange of knowledge with scientific entities and the transfer/“sale” of innovative “products” (licences, inventions, expert opinions, etc.). Academic entrepreneurs “sell” their products at conferences and in scientific magazines by way of striving towards gaining renown in the scientific environment, positioning their accomplishments while strengthening them by means of holding high positions in editorial boards in order to gain influence on the direction of scientific research. They create excellent contacts with politicians and managers of business units, while also holding positions there in management boards of firms with the aim of ensuring recognition of the science represented by them, as well as the particular research area (Goldstein, 2007, pp. 14–16). Laboratories managed by academic entrepreneurs are defined as quasi-enterprises, as their development and existence depend on their ability to acquire financing, while also on the attraction of the most talented personnel, as well as the fact that the main researchers (project leaders) must undertake activity and display skills that are required from businessmen who manage enterprises (Etzkowitz, 1998; Stuss, 2018; Clark, 1993). In order to execute the new aims, an innovative university is obliged to intensify the associated features of the university and the inherent knowledge (Wysocka and Leja, 2018, pp. 4–9). The most significant features involve servant leadership, strong and ancillary with regard to the community of the governing academic centre (Clark, 1986, p. 5), the flexibility of the university in the sphere of didactic and research activities (Krupski, 2005, p. 22), fuzzy structures (Morgan, 2005,

6  Zbigniew Makieła p. 89), team teaching (Morgan, 2005, p. 102), sharing knowledge, supporting creativity (Evans, 2005, pp. 61–62), the fluidity of roles and the range of duties, culture encompassing knowledge (Jabłecka, 2004, p. 16) and openness to variety (Andrews and Tyson, 2005, p. 26; Lawton Smith and Bagchi-Sen, 2008). The transformation of the function and the features of the university with relation to the economy and local government/government administration (triple helix) occurs when each of the entities indicated may – to an increasing degree – take on the role of another. The theory of the triple helix states that the knowledge infrastructure may be explained with the aid of the variable relations mentioned. The agreements and the network between the three entities ensure a long-lasting contribution and sustainable development of science based on innovative processes. In this new configuration, the academic environment plays a leading role, while also supporting entrepreneurship, creating institutional entities of support (career offices, academic incubators and pre-incubators of entrepreneurship, technology transfer centres, science and technology parks, clusters), innovative enterprises (spin-off firms), as well as being a centre for the development of innovative technologies and provider of qualified personnel (Etzkowitz, 2001, p. 1; Feldman et al., 2002). An innovative university, which is termed the “university of the future,” facilitates good talent management – that is, better management of talented students by indicating to them their professional career paths with particular mention of the development of the ability to perceive opportunities and combine theoretical knowledge and practical knowledge (Franklin et al., 2001). The key to the dynamic development of the universities of the future is becoming an efficient system of education (Pawłowski, 2004, pp. 92–96). The university of the future constitutes the most significant link of the network of innovations, open innovations (Bucic and Ngo, 2012), while also the links to global innovations built (Lee et al., 2013, pp. 30–41; Lichtenthaler, 2012, pp. 851–861; Park et al., 2015, pp. 196–208). Due to its position in the triangle of innovations, it plays the principal role in the diffusion of technological innovations for industry and services. With this aim in mind, it should conduct technological foresight in order to predict the potential paths for the development of the economy, identify new research areas and have its own development strategy, whose preparation is one of the principal tasks of the college authorities (Leja, 2006, p. 12; Di Gregorio and Shane, 2003). Hence, it is necessary to ask the question of how the process of management of an innovative university proceeds in current practice. The aim of the research conducted was the identification of the process of managing the innovative university in the selected nationwide and international universities. The definition of their specifications, and also scopes of themes, shall facilitate the preparation of good practices in the future in terms of the management of an innovative university and may provide the opportunity to spread and standardise the management of an innovative university. In the execution of the aforementioned research aim, the following research questions have been put forward:

Innovative university 4.0  7 ·· ·· ··

In what way is the greatest value of the university, namely value constituted by its employees, students, graduates and their knowledge, used better than up to now? What features should an innovative university have? What are the effects of the process of managing an innovative university?

Methodology of research The first phase of research related to the identification of the basic literature associated with the defined aims of the research. The sources of publications that included full-text sources were selected and used, such as the following: ProQuest, Emerald and SCOPUS. As a result, access was acquired to current and significant magazines and publications of an international range. Subsequently, a selection was carried out on the basis of the following keywords: University management, innovative university, knowledge management. A further stage was the expansion of the analysis to include an auxiliary notion, namely, network cooperation. The source material accumulated was narrowed down by means of excluding such works as communiques, conference presentations and book reviews. Finally, analysis of the content was conducted on the basis of abstracts that narrowed down the references to the area of the science of management. In a further stage, the literary material was expanded to include Polish scientific publications of both monographs and reviewed papers in the leading Polish magazines kept in the Jagiellonian Library. The references acquired were subjected to systematisation in terms of the literature with full-text content, while the quality of the acquired publications was established (while rejecting the unnecessary ones from the viewpoint of the research aims), which were subsequently systematised and ordered on the basis of the adopted assumptions of the keywords, which in turn facilitated a broad analysis of the problematic issues of the management of an innovative university that was confirmed by the large growth in international literature, particularly in the scope of empirical research and in the scope of creating innovations. The methodology adopted facilitated the accumulation of source material that was important for further analysis. In the subsequent stage of literary research, the empirical analysis was commenced. Case studies of programmes of management of innovative universities were accumulated and their subject areas were selected, particularly those of the management of innovations and the management of academic entrepreneurship. The Perspektywy1 ranking was chosen as a starting point for the search for cases as follows: Universities, study courses and engineering studies in Poland according to the following criteria: Internationalisation of studies, conditions of education, scientific effectiveness, scientific potential, innovativeness, prestige and graduates on the labour market. The ranking of the best universities in the world2 was based on a list created by the firm Quacquarelli Symonds. The Quacquarelli Symonds ranking is arranged on the basis of a points system. A university may acquire a combined total of 100 points, which are awarded for, among other

8  Zbigniew Makieła factors, the reputation of the university worldwide, the opinions of employers, the opinions of scientists, etc. By applying the aforesaid methodology, well-thought and complete data was accumulated as it was derived from a multitude of sources and provides the possibility of triangulation, which involves the comparison of information from various sources. The screening of cases was undertaken on the basis of a subjective assessment of the management of an innovative university in the sphere of probability and competitiveness. The induction data analysis provided the opportunity to illustrate the regularities by moving from the general characteristics to increasingly detailed analysis, as well as enabling the return to the accumulated material on multiple occasions with the aim of expanding the research process.

Innovative university 4.0: the ability to innovate One of the most well-known works relating to entrepreneurship in the academic environment is the essay by H. Etzkowitz entitled “Scientific entrepreneurs and entrepreneurial universities in American academic science.” He describes academic entrepreneurship and entrepreneurial universities by treating them as the effect of the revolutionary process commenced in the United States by great programmes of development of science in the aftermath of World War II. In the later work of Etzkowitz (2003, pp. 109–121), he suggests that slowly but surely, European research centres will allow the profit motive into their activities and shall acquire an entrepreneurial nature similar to their American counterparts. The theory put forward by Etzkowitz arouses a sense of reflection in the reader, as well as a profound analysis of the problematic issues of innovative universities and the American system. The American model of the innovative university is embedded in American entrepreneurship and the gradual evolution of American universities from colleges teaching theology and art to modern research institutes. Propagating entrepreneurial attitudes in universities beyond the United States, in the majority of countries, particularly in Poland, is in contrast with the history of central planning and control. The American university system has been a heterogeneous set of a large number of autonomous institutions since the initial phase of development in the 19th century, which are supported by local communities, religious denominations and individual philanthropists (Rudolph, 1990). The academic staff was not controlled by the students (along the lines of the Italian universities of the Middle Ages), nor did it work in the nature of officials paid by the state (as is the case in the majority of European countries) (JasiulewiczKaczmarek and Drożyner, 2011). Since the moment of their formation, the presidents and boards of trustees of American universities exercised local control, which has never involved the impact of federal and state authorities. Attempts at the centralisation of the university system have always been blocked (both by the oldest public schools and newer state colleges), even in times when the financial problems of colleges could have suggested other solutions. At present, autonomy constitutes one of the greatest

Innovative university 4.0  9 attributes of American colleges and is also the main premise of their transformation into entrepreneurial organisations. Directly after World War II, and also during the 1960s, an extraordinary level of success was achieved thanks to the implementation of solutions prepared within the framework of research that was fundamental to military technologies, which justified exponential growth in the federal financing of academic research. A famous report by Vannevar Bush entitled Science, the Endless Frontier, though convincingly emphasising the necessity of large public financing of universities, failed to convince the American legislators of the need to enact a central agency to administer such resources (Graham and Diamond, 1997). Various institutions that provide research grants in various fields, such as the National Institute of Health, the National Science Foundation, the Ministry of Defence and other government bodies, execute projects both in their particular scientific fields and in areas that overlap each other. The possibility of acquiring financing in certain areas on the part of various agencies by means of the 170 mechanisms of knowledge transfer has enabled the maintenance of the heterogeneity of the various research aims (also within the framework of the same research area), as well as administrative models. All these programmes are based on the so-called principle of the main researcher/project manager (principal investigator – PI), in the sense that individual scientists (faculties and institutions are not represented by them) bear the entire responsibility for the project. Significant research achievements are the key factor that enables the main researchers to acquire a grant that facilitates the creation or expansion of their own laboratories or research groups. Individual scientific abilities, not political goals or equal division of resources, constitute the key criteria in the allocation of research funds. As a result, universities have always been involved in the race to employ the most talented scientists, whose contribution is decisive in terms of allocating public resources for research. Simultaneously, certain scientists become involved in self-promotion activities, which lead to the acquisition of financing and subsequently the management of the allocated grants. They devote their efforts not only to the publications, participation in conferences and scientific meetings but also to the creation of ties with one or more agencies that finance research work, thus striving to gain influence on the choice of research themes that are subject to financing, while also becoming engaged in the creation of academic networks aimed at recruiting young excellent scientists that may satisfy the growing needs of research laboratories (Chmielarz, 2000). As employees of their universities and not the federal government or particular states, academic scientists have a certain freedom and are encouraged to become involved in typical entrepreneurial activities if this may lead to the strengthening of the reputation of the university and its financial standing. As a result of this, the American academic system over the past few years has experienced a general growth trend and complexity of research teams in all the fields of science (Adams et al., 2005, pp. 259–285). Etzkowitz (1983) describes this mechanism as diffusion of the quasi-firms (laboratories and research groups), whose survival and expansion are dependent on the acquisition and management of funds, recruitment of qualified employees, achievement of results and gaining access to financing

10  Zbigniew Makieła agencies of higher levels. The main researchers make a contribution in the form of the required entrepreneurial effort, as well as the qualifications required to execute a particular task while gaining in return a significant proportion of recognition as the authors of the success of the scientific enterprise. Stephan and Levin (2002) presented a similar view. This parallel stretches to individual scientists in academic institutions to the extent that the latter is also involved in rival efforts in terms of creating new research areas and disciplines in the sense of acquiring the resources both from industry and from the central authorities, while also attracting the best scientists. The aforesaid prerequisites differ substantially from the way of organising academic research in Europe (Mowery and Sampart, 2001).

Channels of commercialisation of innovations In the opinion of multiple scholars (Leja, 2013; Makieła, 2018; Wissema, 2009), the innovative university is the future of higher education, which is acknowledged by such universities as the Massachusetts Institute of Technology, Stanford University and Cambridge University. In the aforesaid universities, academic entrepreneurship is a form of academic activity that executes the process of cooperation between the university and the economy, the commercial transfer of the results of scientific activities, knowledge transfer, technology and innovation. By transferring the scientific accomplishments, the universities pass on information to other entities in order to be able to reproduce the achievements attained at the university. This process may be viewed at the level of horizontal ties – the diffusion of innovations in the area of the sector of science, while also at the level of vertical ties – the diffusion (transfer) of innovations from the sector of science (university) to the sector of the economy (enterprises). Horizontal ties are rather common, albeit when viewed from the perspective of the principal factors of economic growth, it is necessary to focus on the vertical ties (Morgan et al., 2001). A commonly known method, which is frequently acknowledged to be the first method of commercialisation and which is most often utilised by the leaders of the transfer of innovation – the experienced universities such as MIT or Harvard University – is that of licensing. The inventions indicated by the universities are placed under protection, while the rights to their economic use are only possible by means of purchasing the licence.3 The criteria of the success of a university in this sphere should not be revenue accrued from licensing agreements, but the number of workplaces created thanks to this scheme in firms, as well as the development of new business activities created on the basis of licences (Lissoni et al., 2007). The second method of commercialisation of the results of the work of scientists is the establishment of enterprises with the participation of the university, whereby they base their activities on the results of research and development work and technologies prepared by the university. The process of the active participation of a university in the technology transfer to the economy is the result of the assumptions of the strategy in which the commercialisation of the accomplishments of the employees of the university, professors, PhD students, graduates and students themselves,

Innovative university 4.0  11 together with their entrepreneurship, creates more favourable conditions for the technology transfer. The university decides to apply such solutions in the case when the technology prepared becomes an innovation that strengthens the position of the university in the academic environment, thus it decides to strengthen the brand of the university and places it among the worldwide elite universities (Merton, 1988). A further channel of commercialisation of knowledge is that of joint research projects involving universities and enterprises. The enterprises become involved in cooperation with the university and create a fund for the project to be executed together with the university4 (Table 1.1). The fourth option for the commercialisation of the technology transfer from the sphere of science to the economy is the execution of commissioned tasks and consulting. Enterprises turn to universities for the preparation of strategies of development, feasibility studies, fragmentary research on product innovativeness and scientific expert opinions. These are usually directional orders that are aimed to solve a technical, organisational or marketing problem in a given enterprise. The execution of this type of order takes place on the basis of an agreement between the university and the enterprise in question, while its contractor is a specified scientist or specially appointed team of scientists for this task.

Table 1.1 Channels of commercialisation of knowledge Technology transfer Vertical •• contract research commissioned by firm •• licence for inventions, utility models •• scientific and technical advice •• flow of technical staff, training •• spin-off firms •• information in scientific and technical publications •• seminars, conferences Non-commercial •• knowledge provided free of charge (studies and apprenticeship) •• occupational and professional associations •• mutual provision of licences •• knowledge provided within framework of firms •• international concerns Passive •• transfer of information •• coming into possession of knowledge and its protection, accumulation of knowledge, archiving knowledge •• development of application Source: Own analysis.

Horizontal •• licences, sale of patents and utility models, know-how •• industrial cooperation •• technical services •• tangible assets •• joint venture Commercial •• materialised transfer (hard) •• trade of licences, utility models and know-how •• broadly understood information, commercialised information •• knowledge provided for a fee (extramural studies, commercial studies, post-graduate studies Active •• commercialisation of technology

12  Zbigniew Makieła The accomplishments of scientists are very frequently achieved by means of informal knowledge transfer. This is the result of the attention paid by the scientific employees to the level of the individual scientific output, which is the basis for the scientific evaluation and promotion of the university employees. Moreover, the results of scientific research are announced during scientific conferences and seminars, while also published in scientific magazines of renown in the international academic environment. Informal knowledge transfer is also conducted by the graduate channel. University graduates who work in various business units avail of the technologies they encountered in the university laboratories during the course of their professional work and frequently further develop them (Shane and Stuart, 2002).

Factors influencing the formation of an innovative university A scientist (academic entrepreneur) is to be found at the heart of deliberations on the subject of an innovative university, while also deciding on the establishment of an enterprise of the spin-off type. On the basis of literature, four groups of factors have been distinguished that support entrepreneurial activities in the academic environment. The first group of factors is associated with the professional features of the academic community (faculty), which decide the terms of the establishment of the enterprise. These professional features include the following: History of publications and citations (including patents), the position in the university hierarchy, business education and experience in conducting business activities. Publishing constitutes a common way to pass on knowledge and case studies illustrate that the academic innovators usually aim to achieve excellence in the scientific research conducted and the publication of their works on behalf of the scientific community, which is associated with the mentality of “publish or die” (Vohora et al., 2004, pp. 147–175). The data on the subject of publications is significant as the researchers whose works are more widely published seem to be more active in terms of creating enterprises of the spin-off type (Shane and Khurane, 2003, pp. 209–227). Academic publications are also a common gauge in terms of the quality of the scientific works conducted, which are correlated with the probability of acquiring a patent (Renault, 2006, pp. 227–239), which may in turn lead to the establishment of a firm. However, Landra et al. (2006, pp. 1599–1615) discovered that the number of publications has no impact on the establishment of spin-off firms by scientists, while Agrawal and Henderson (2002, pp. 44–60) claimed that patents are not a good prognosis of the number of publications as such, yet the ranking of the latter is measured by the number of citations (citation impact). Lowe and Gonzales-Brambila (2007, pp. 173–194) indicated that entrepreneurs from the academic environment are usually scientific “stars,” who are highly “efficient” when it comes to publications and citations. The placement of a particular scientist in the university hierarchy has little impact on his/her accomplishments in the sphere of patents, with the slightly greater level of involvement of the “full/full-time” professors, although in the case of the total number of academic employees on a full/permanent contract, the “effects” are

Innovative university 4.0  13 lower than in the case of the remaining employees. This is in accordance with the previous findings that entrepreneurship may constitute an alternative with relation to work contracts – the option of employment for scientists (Helm and Mauroner, 2007, pp. 237–270). Koschatzky and Hemer (2009, 191–218) indicated that role models may have a positive impact on the level of involvement of scientific employees in terms of entrepreneurial activities. There is a common view that university employees are lacking in the essential knowledge and skills for conducting business activities, thus their education in the sphere of business favours the enhancement of the effects of the activities of spin-off enterprises. Not only formal education in the sphere of conducting business activities, but also practical experience in this area and cooperation with the business sector may be very useful in the process of creating spin-off enterprises, as they facilitate the identification of market opportunities (Bodas Freitas and Verspagen, 2009), and also the development of the firm in the later phase, which is confirmed by Helm and Mauroner (op. cit.), who identified the positive relation between the development of the spin-off enterprises and the experience of the founders of start-up firms (Stephan and Everhart, 1998). Empirical data indicates that academic and scientific norms play a significant role in the process of technology transfer (Ndonzuau et al., 2002, pp. 281–289; Goldstein, 2009). Etzkowitz (1983) claimed that in the field of science and among the academic personnel, a normative transformation is taking place which involves a departure from the conviction of the necessity to maintain the “ivory tower” approach. Nevertheless, there are certain threats associated with the entrepreneurial pursuits of the universities. The hermeticity of the environment or the slowdown in the launching of publications threatens the free flow of knowledge. Simultaneously, entrepreneurial scientists are less prone to share information and knowledge (Louis et al., 2001, pp. 233–245). We may observe the negative impact of the business activities of spin-off enterprises in terms of the exchange of the findings of scientific research (Goldstein, op. cit., pp. 173–194) and also the unfavourable effect of the widespread lack of openness to academic entrepreneurs (Bok, 2003), the drop in the productivity of scientists in terms of the listed number of publications of the personnel, which is the gauge of delays in the publications issued (Stephan and Levin, 2002). Decisions relating to full-time employment and promotions undertaken at the level of faculties indicate that the faculties themselves have a significant impact on the entrepreneurship of scientists and not only the policies of the university. The norms that occur at the level of the faculties would seem to have a key influence on entrepreneurial activities (Louis et al., 1989, pp. 233–245). Grants and programmes of aid that serve the increase of the technology transfer are not necessarily effective mechanisms for stimulating knowledge transfer. Meyer (2003, pp. 107–115) claimed that the direct grants for enterprises commencing business activities may lead to the formation of firms that shall function in a non-commercial environment, while also indicating that providing support for a particular spin-off firm for several years does not necessarily lead to the formation of a firm that is capable of surviving independently. Easily available and

14  Zbigniew Makieła significant financial aid may cause the creation of excessive potential in terms of infrastructure and personnel.

Case study of an innovative university: the Jagiellonian University (JU) in Krakow The Jagiellonian University, which was established in 1364 by King Kazimierz III Wielki (Kazimierz the Great), is the oldest university in Poland. It has 16 faculties. Academic entrepreneurship is an important aim of education in the process of the internationalisation of didactic and scientific activities, alongside the commercialisation of the knowledge of the aforesaid university. A system of supporting academic entrepreneurship has been formed, with its headquarters in the Centre of Innovation and Technology Transfer (CITTRU), which is tasked with supporting activities aimed at the cooperation of science with business. The Jagiellonian University also inspires joint ventures between universities, which is evidenced by the cooperation between the Jagiellonian Centre of Innovation Ltd. (Jagiellońskie Centrum Innowacji Sp. z o.o.) and the Małopolska Centre of Biotechnology (MCB – Małopolskie Centrum Biotechnologii). The Jagiellonian Centre of Innovation Ltd. is the operator that manages the Life Science Park in Krakow cluster, which enhances the cooperation between enterprises operating in the sector of life sciences in terms of availing of the resources of the university (Stuss, 2018, p. 277). The Małopolska Centre of Biotechnology (MCB) is a joint project of the Jagiellonian University and the University of Agriculture in Krakow. Researchers from both universities deal with scientific research that is associated with biotechnology, the safety of nutrition, genomics, nutrigenomics and bioinformatics.

The Centre for Technology Transfer (CITTRU) in Krakow The centre has been functioning for ten years as an entity of the Jagiellonian University. Its task is to support activities that are aimed at the cooperation between science and business by, for example, creating technological bids, building the network of contacts between science and business and supporting and creating joint research and implementation projects. The offer is directed at the scientific employees of the Jagiellonian University and at enterprises. Activities undertaken by the centre are adjusted to the needs submitted by the scientists. However, in the case of a firm declaring the will to cooperate with the university researchers, the centre provides services in terms of searching for a partner, negotiating agreements, etc. The centre submits a training and advisory offer to the firm (presentation, self-presentation, creation of business plans, financing, etc.). The Centre for Technology Transfer (CITTRU) is an entity of the Jagiellonian University that is responsible for the comprehensive cooperation between science and the business environment. The tasks of CITTRU include the identification of innovative solutions that are created in the Jagiellonian University, the protection of the research findings,

Innovative university 4.0  15 the selection of the optimal methods of the commercialisation of the scientific accomplishments (granting licences, the sale or creation of spin-off firms in cooperation with the founders and the interested entrepreneurs), the preparation of the technological offer of the university that encompasses the innovative solutions for industry, as well as the offer for research services of the university, which are executed on request for external institutions, promoting the technological offer, the organisation of conferences, meetings with potential clients of technology, the identification of business partners, building networks of contacts with industry, negotiations, preparation and supervision of the execution of agreements associated with the commercialisation and coordination and execution of research services at the university, while also creating the offer for research services and its promotion, negotiating contracts and cooperation with external entities.

CITTRU – the Academic Business Incubator at JU Within the framework of CITTRU, the Academic Business Incubator at the Jagiellonian University (AIP UJ – Akademicki Inkubator Przedsiębiorczości) also functions as a project which is dedicated to innovative academic firms. It previously functioned as an entity of JU within the framework of the Jagiellonian Centre of Innovation, with all its infrastructural resources. The AIP UJ was established with entrepreneurial people in mind who want to try their hand at business by running their own start-up. The offer of AIP UJ is directed at the most creative and entrepreneurial group of students and graduates of JU. The AIP UJ is open to everyone who wants to establish their own start-up and has an idea for that. It advises novice entrepreneurs on how to move around on the market, how to manage a firm, as well as in what way to organise its business model in order to bring both personal and financial satisfaction. Apart from substantive support, young entrepreneurs may avail of co-working, namely, the space for joint work and meetings. As business also involves relations, AIP UJ focuses on networking, mutual familiarity, making contacts and creating cooperation with others who are eager to share their own knowledge. In the incubator, it is also possible to count on accounting/tax support, as well as legal and administrative support in the process of pre-incubation.

The Jagiellonian Centre of Innovation (JCI) The Jagiellonian Centre of Innovation (Jagiellońskie Centrum Innowacji) conducts activities of an investment and development nature. These are first and foremost directed at people who are interested in the transformation of a scientific project into commercial activity, as well as sectoral firms in search of financial resources for new areas of activities. The firm also deals with the promotion of Krakow as a place that is favourable to the development of innovation, by offering a high-class level of laboratories in the built-up area of the Life Science Park, which is to serve commercial research in the spheres of biotechnology, biomedicine, chemistry, biochemistry, pharmacology, biophysics and physics.

16  Zbigniew Makieła

Life Science Park cluster The subject of the activities of a cluster are undertakings that encompass research on innovative medical drugs, generic drugs and other medical products, while also the preparation of diagnostic procedures and solutions. The level of financing for a project is dependent on the demand that is submitted by an individual project provider or firm. With regard to the differentiated level of financial needs, the firm not only finances projects in the seed phase but also in the further stages of their development. With this aim in mind, work is conducted on the initiation of funds with possibilities that exceed the financial level that is characteristic of venture capital funds. The laboratory section is adjusted to any adaptation that facilitates the execution of advanced research in the spheres of biotechnology, biomedicine, biology, chemistry, pharmacology, physics, nanotechnology and environmental protection. The Life Science Park also has an offer for small enterprises of the sector of start-ups that are at the preliminary stage of development (start-up, spin-off), while also for scientists conducting their own research projects. The investment of the Life Science Park is located in the neighbourhood of the New Campus of the Jagiellonian University in the area of Krakow’s Special Economic Zone. The initiative of the Life Science Park of Krakow cluster encompasses 75 entities. The largest group consists of SMEs (50%), followed by large enterprises, including hospitals (20%), as well as another group consisting of scientific entities (colleges and R&D institutes – 15%). The Life Science Park of Krakow cluster was established in 2006 as a network of cooperation between institutions and firms from the macro-region of southern Poland that shared common goals and visions of the development of the ecosystem of innovations in the area of biotechnology and life science: ··

·· ··

The creation of a network of cooperation in the area of life science, which facilitates the effective combination and use of the existing potential of people, enterprises, universities, science and research units, while also institutions of the business environment and local and regional authorities in the area. Support for entrepreneurship and innovativeness in the area of life science, while also the creation of conditions for the effective commercialisation of the findings of R&D work. Combining and developing the resources and competencies from the area of life science with the aim of the effective use of both the existing possibilities and opportunities associated with the development of an innovative economy based on knowledge.

Since 21 October 2016, the Life Science Park of Krakow cluster has had the status of a Key National Cluster (Krajowy Klaster Kluczowy). Thus it simultaneously joined the group of 16 elite strategic clusters that are of great significance for the development of the Polish economy and are both competitive and innovative

Innovative university 4.0  17 in the international arena. With the aim of the better use of the potential of the initiative of the Life Science Park cluster, the undertaking of challenges facing the bio-region of Małopolska, as well as the effective use of the opportunities of development in the area of life science and biotechnology, the Foundation of the Life Science cluster was established in Krakow.

The offer of JU innovations – biomedicine (examples of activities of CITTRU) The Centre for Technology Transfer (CITTRU – CTT CITTRU) is an entity of the Jagiellonian University that is responsible for the comprehensive cooperation between science and the business environment. One of the most important tasks of CITTRU is the selection of the optimal way of commercialisation of scientific accomplishments by means of granting licences, while it is also responsible for the sale or creation of spin-off firms in cooperation with the creators and interested entrepreneurs. The activities of the centre are exemplified by research in the field of biomedicine.

The academic maker-space – the Garage of Complexity A workshop of intricacies, a workshop of curiosity, a workshop of personality, a bio-workshop and a workshop of marvelousness are several of the synonyms that have appeared with reference to the Garage of Complexity of the Jagiellonian University among those who have heard about this exceptional undertaking. This workshop is the first academic maker-space in Poland that is equipped with professional research infrastructure, interdisciplinary science laboratories and space for creative DIY and experimentation and that encourages the creation of new notions and ideas. The projects that are conceived here transgress the initiatives executed within the framework of formal study courses. They are conducted by people who, apart from their everyday duties, want to fulfil their passions amongst a group of people who share the same desire to become familiar with, discover and implement new ideas. Workshop people are a group of students, PhD students and researchers of the Jagiellonian University, each of whom is to fulfil the role of an initiator, searcher, performer, mentor, manager and leader. Complexity is one of the notions that reflect the essence of this workshop. This relates to the intricacy and interdisciplinarity of the research projects that are conducted there, while also referring – on the one hand – to the variety of the people working in the research teams, while on the other hand to the intricacy and level of complexity of the activities undertaken. Work is conducted in this workshop that arouses the interest of the firms associated with it, who perform the role of partners that are engaged in the execution of the chosen projects. There is a wide variety of examples of the biomedical activities of CITTRU: From the designing and printing of 3D individual models of livers for patients with a visible system of blood vessels, or a located tumour, which is very helpful

18  Zbigniew Makieła for surgeons preparing for an operation, through the construction of a 3D printer dedicated to printing the base for a 3D cell culture, to a synthesis that is friendly for cell material used in the printing. This workshop is part of the Complex Systems Research Centre, named after Marek Kac, which is located in the Faculty of Physics, Astronomy and Applied Computer Science and which cooperates closely with the CITTRU, the Academic Business Incubator and other faculties of the Jagiellonian University.

Conclusions and recommendations An innovative university requires a new model of management, whose aim is the efficiency of cooperation with the national and international environments and in which scientific research fulfils the conditions of commercialisation and scientific employees, students and graduates are motivated to undertake competitive challenges, while entrepreneurship is an element of the academic culture. The suggested changes to the management of the university should lead to the reinforcement of the entrepreneurial and innovative attitudes of the employees, students and graduates, thus making entrepreneurial attitudes an academic custom. It is essential to strengthen the innovative potential of the tools of academic entrepreneurship, termed as the innovative infrastructure of academic entrepreneurship, in order to fulfil these intentions, which include programmes and projects of support, institutional forms of supporting academic entrepreneurship, e.g. spin-off and spin-out enterprises, while also the academic business incubators (AIP), career offices, centres for technology transfer (CTT), science and technology parks (PNT), etc. The innovative university should compete with the use of values that define the level of innovativeness, i.e. the number of patents registered in the World Intellectual Property Organization, the ratio of patents submitted to grants, the percentage of patents of an international range, the total number of citations associated with patents, the indicators of the analysis of the impact of the patent on the further development of research, the combined total of scientific papers relating to inventions and also the number of papers prepared by scientists from a particular university that is in cooperation with the business environment. The formation of academic enterprises of the spin-off type constitutes one of the channels of the flow of knowledge, while also constituting a subject of considerable interest among both scientists and the regional decision-makers. The fundamental causative factor of the establishment of this type of firm is that of academic entrepreneurs. The notion of academic entrepreneurs is embedded in the American system of research organisation. Empirical data indicates that Europe is less effective than the United States with regard to knowledge transfer from the college laboratories to the regional market by means of spin-off firms. One of the possible reasons for this difference may be the fact that the institutions that determine the nature of the research system in continental Europe are not in favour of the emergence of classic academic entrepreneurs. On the basis of literature, four groups of factors may be distinguished that may support entrepreneurial activities in the academic environment in spite of the unfavourable

Innovative university 4.0  19 institutional conditions. These are the features of the members of the academic community, which include the history of publications of a scientist and his/her citations (including patent citations), the position in the hierarchy of the university, business education and experience in terms of conducting business activities. Apart from these, the supporting factors are social capital and academic and scientific norms that play a significant role in the process of technology transfer. Factors from the academic environment and generally speaking, the business environment, may also exert a significant impact on entrepreneurial activities. Grants and programmes of support that serve the increase in technology transfer would seem to be effective mechanisms for the stimulation of technology transfer.

Notes 1 http://ranking​.perspektywy​.pl​/RSW2019/ 2 https​:/​/bu​​sines​​sinsi​​der​.c​​om​.pl​​/rozw​​oj​-os​​obist​​y​/ran​​king-​​najle​​pszyc​​h​-ucz​​elni-​​na​-sw​​ iecie​​-quac​​qua​re​​lli​-s​​ymond​​s​/ljj​​2mwl 3 The channel of knowledge and technology transfer from the university to the business world based on the licencing patent, or the sale of intellectual property (IP), is complicated as the majority of universities do not generate sufficient revenue to cover the costs of conducting an office of technology licencing – OTL). 4 Firms from the pharmaceutical and biotechnological sectors most frequently and most willingly become involved in the process of transfer. However, a very small number of universities conduct joint research with firms. According to the OECD, the report of the American Association of University Technology Managers in 2009 indicated that research financed by the private sector constituted a mere 6 to 8% of the budget of the university. The lion’s proportion of the financial resources for research was derived from the public sector

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22  Zbigniew Makieła non-clinical life sciences faculty’, The Journal of Technology Transfer, 26(3). DOI: 10.1023/A:1011106006976 Lowe R.A., Gonzales–Brambila C. (2007), ‘Faculty entrepreneurs and research productivity’, Journal of Technology Transfer, 32(3). DOI: 10.1007/s10961-006-9014-y Makieła Z.J. (2017), ‘The third generation model of the 21st century university: entrepreneurial, innovative university’. Folia Oeconomica Cracoviensia, LVIII. Makieła Z.J., Stuss M.M. (2018), Przedsiębiorczość, Zarządzanie innowacjami, Warszawa: C.H. Beck. Merton R.K. (1988), ‘The Matthew effect in science, II. Cumulative advantage and the symbolism of intellectual property’, Isis, 79(4). Meyer M. (2003), ‘Academic entrepreneurs or entrepreneurial academics? Research-based ventures and public support mechanisms’, R and D Management, 33(2). Morgan G. (2005), Obrazy organizacji, Warszawa: Wydawnictwo Naukowe PWN. Morgan R.P., Kruytbosch, C., Kannankutty N. (2001), ‘Patenting and invention activity of U.S. scientists and engineers in the academic sector: comparison with industry’, Journal of Technology Transfer, 26(1–2). DOI: 10.1023/A:100785680049 Mowery D.C., Sampat B.N. (2001), ‘Patenting and licensing university inventions: lessons from the history of the research corporations’, Industrial and Corporate Change, 10(2). DOI: 10.1093/icc/10.2.317 Ndonzuau F.N., Pirnay F., Surlemont B. (2002), ‘A stage model of academic spin-off creation’, Technovation, 22(5). DOI: 10.1016/S0166-4972(01)00019-0 Park G., Kim MJ., Kang J. (2015), ‘Competitive embeddedness: the impact of competitive relations among a firm’s current alliance partners on its new alliance formations’. International Business Review, 24(2). DOI: 10.1016/j.ibusrev.2014.07.009 Pawłowski K. (2004), ‘Uniwersytet przedsiębiorczy jako ośrodek wzrostu innowacyjności regionu’ [online]. Available at: http:​/​/rep​​ozyto​​rium.​​wsb​-n​​lu​.ed​​u​.pl/​​bitst​​ream/​​handl​​e​​ /111​​99​/18​​22/ (Accessed: 15.07.2020). Popławski W., Markowski M., Florkiewicz M. (2013), Przedsiębiorczość polskich szkół wyższych. Diagnoza, uwarunkowania, perspektywy. Raport z badań, Toruń: Wydawnictwo WSB. Renault C.S. (2006), ‘Academic capitalism and university incentives for faculty entrepreneurship’, Journal of Technology Transfer, 31(2). DOI: 10.1007/ s10961-005-6108-x Ritala P. (2012), ‘Coopetition strategy: when is it successful? Empirical evidence on innovation and market performance’. British Journal of Management, 23(3). Rudolph F. (1990), The American College and University: A History, Athens, GA: University of Georgia Press. Shane S., Khurana R. (2003), ‘Bringing individuals back in: the effect of career experience on new firm founding’, Industrial and Corporate Change, 12 (3). DOI: 10.5465/ APBPP.2001.6133762 Shane S., Stuart T. (2002), ‘Organizational endowments and the performance of university start-ups’, Management Science, 48(1). DOI: 10.1287/mnsc.48.1.154.14280 Stephan P.E., Everhart S. (1998), ‘The changing rewards to science: the case of biotechnology’, Small Business Economics, 10. DOI: 10.1023/A:1007929424290 Stephan P.E., Levin S.G. (2002), ‘The importance of implicit contracts in collaborative scientific research’, in: Mirowski P., Sent E.M. (eds.), Science Bought and Sold. Essays in the Economics of Science, Chicago, IL: University of Chicago Press.

Innovative university 4.0  23 Stuss M.M. (2018), ‘Zarządzanie innowacjami’, in: Makieła Z.J.., Stuss M.M. (eds.), Przedsiębiorczość i zarządzanie innowacjami, Wiedza, technologia, konkurencja, przedsiębiorstwo, Warszawa: Wyd. C.H. Beck. Trow M. (2003), In Praise of Weakness: Chartering, The University of the United States, and Dartmouth College, Center for Studies in Higher Education Research and Occasional Paper CHSE, Berkeley: University of California. Varga A. (2009), Universities, Knowledge Transfer and Regional Development: Geography, Entrepreneurship and Policy, Cheltenham, UK/Northampton, MA: Edward Elgar. Vohora A., Wright M., Lockett A. (2004), ‘Critical junctures in the development of university high-tech spinout companies’, Research Policy, 33(1). DOI: 10.1016/ S0048-7333(03)00107-0 Wissema J.G. (2009), Uniwersytet Trzeciej Generacji. Uczelnia XXI wieku, Wrocław: Wydawnictwo Zante. Wysocka K., Leja K. (2018), ‘Dekalog internacjonalizacji szkolnictwa wyższego w Polsce’, e-mentor, 1(73).

2

The impact of innovation 4.0 on higher education Agnieszka Herdan

Introduction The fourth industrial revolution (Industry 4.0) is rapidly transforming how the world operates. The fast-growing development in information technology resulted in huge accessibility of information with growing global seamless interconnectivity (Kagermann, 2014; Bonekamp and Sure, 2015). The current trends of automation and digitalisation of industries, new media and development of smart tools (artificial intelligence – AI) are reflected in all aspects of our lives and are reshaping how we work, learn and develop skills. Industry 4.0 is defined as the new era that creates and extends the impact of digitalisation in new and unprecedented ways. It is also viewed as an originator of a “cyber-physical systems” that offers entirely new capabilities and connectivity for people and machines (Davis, 2015; Liu and Xu, 2017). The trends of Industry 4.0 leads to the elimination of routine jobs and a focus on highly skilled workforce, so those that would be affected the most would be the middle-skill jobs (Brown-Martin, 2017). Most likely in the next 50 years, many jobs which exist today will completely disappear (Summers, 2014; Schwab and Davis, 2018). As new digital technologies emerge, jobs requirement will significantly change and the configuration for education and training will need to adjust to this new condition (Someshwar et al., 2012; Michalos et al., 2014, 2015; Tsarouchi et al., 2017; Roy and Edan, 2018; Villani et al., 2018). As the world continues to change and new challenges arise there is a misassumption that as everyone has access to mobile phones that equals good IT skills and IT literacy. In many cases the lack of digital culture, relevant skills and training is evident. Nowadays, concerns arise about how well higher education prepares students for graduate employment (Busato et al., 2000; Heijke et al., 2002; Braun and Brachem, 2015; Jackson and Hancock, 2010). In this new scenario created by Industry 4.0, higher education institutions faced growing pressure to reformulate their teaching strategies to help students develop skills and abilities that will allow them to be successful in the job market and have a lasting career. The curriculum offered by universities should support students’ development of a correct set of lifelong competencies, as employers are looking not only for applicants with discipline-related knowledge but more importantly with competencies that will DOI: 10.4324/9781003184065-2

Innovation 4.0 and higher education  25 allow them to be successful in a workplace (Orr et al., 2010; Arnove et al., 2013; Braun and Brachem, 2015; Hauschildt et al., 2018). Higher education institutions need to rethink their learning strategies and include new areas of learning (formal learning, informal learning, lifelong learning). When developing educational curricula they need to include the development of soft skills such as social skills, communication skills, teamwork, self-management and working in interdisciplinary teams situated all over the world, as this is currently a standard practice and has become crucial for a successful career. Higher education institutions should offer dual learning – discipline knowledge and life skills that go much further than independent and critical thinking – and they need to allow students to acquire the right skills set and attitudes for the future (WEF, 2014; WIDS, 2019). So, they need to design curricula that meet those new needs and create and incorporate teaching methodologies that go beyond traditional methods of only imparting knowledge (Mustafa Kamal et al., 2019). On the other hand, growing development within learning technology provides a university with opportunities to offer new learning experiences that can enhance traditional classroom education. It enables many new approaches to be applied as to how learning can be delivered and assessed. Several pedagogic approaches will be feasible and accessible that otherwise would have not been.

Innovations In recent years innovation has turned out to be a key element of creating sustainable and well-performing institutions. Drucker (2006) indicated that innovation is a change that produces a new dimension of performance, as White and Glickman (2007) use the term innovation in relation to introducing a new idea, method or device. They indicate that in higher education, innovation can refer to the new way of delivery or new approach that improves performance and final outcomes. Commonly, when the term innovation is brought up in a conversation it instantly brings into mind the inclusion of some form of technology. The function of an innovation system is the creation, diffusion and utilisation of technology (Carlsson et al., 2002). However, innovation cannot be limited to technological development or sciences only but should also be recognised as incorporating new ideas into the traditional framework. Innovation in higher education can be described as a new or significantly improved product, process or organisational method that has a significant impact on the activities of a higher education institution and/or other higher education stakeholders (Brennan et al., 2014). For higher education institutions it is usually the application of technology to enhance the efficiency of teaching, students’ experience and readiness for the workplace. There are two categories of innovation (Christensen, 2011; McCluskey and Winter, 2012). Firstly, a disruptive one, where innovations break with current practices and patterns of performing activities. In that scenario, the changes are radical and create entirely new architecture and ecosystems. And secondly, there are sustaining innovations that are understood as improvements within the

26  Agnieszka Herdan existing architecture of a current system. Depending on the type of innovations, when a higher education institution decides to incorporate some this could have a steady sustaining impact (e.g. embedding some pre-recorded content, offering online consultation), but there could be others that will have a truly disruptive effect (e.g. bringing a new ICT system).

Innovations in higher education Industry 4.0 offers diverse solutions to higher education institutions, such as opensource management systems, e.g. Moodle, Blackboard and Canvas, with different functionalities such as chats, forums and messenger systems where students can communicate in synchronous or in asynchronous ways. Those systems offer collaborative work as well as new assessment modes such as online testing or peer review. Online testing can offer a great advantage with large cohorts as the tests can be graded automatically and provide students with instant feedback about their current level of knowledge and progress made. However, it needs to be stressed that for this innovative approach to bring value to students as well as higher education institutions, the awareness of the changing role of students needs to be understood. There is a shift of students’ role from rather passive users of information to creators of knowledge, where students develop crucial competencies and skills for the workplace, have the opportunity to work in various collaboration sets and are tested in multiple learning scenarios. Technology offers scalability, flexibility and new ways of delivering teaching such as: ··

·· ··

Flexibility of pace – the studying tempo can be controlled by the student accessing material within a more or less flexible window; it can also offer different delivery schedules, such as part-time, accelerated or decelerated, or in a specific case, allow students to work at an individual pace within broad overall deadlines. Flexibility of place – accessing lecture presentations, notes and resources anywhere where an internet connection exists. Flexibility of mode – content can be delivered in various configurations and progress can be monitored with tailored and scaffolded assessments.

Although flexibility is very often highlighted as a great benefit of using technology in higher education, it can create potential confusion, especially around what, where and how to study, particularly if not enough specific guidance is provided. It can create information overload if there are too many resources and activities to engage with and too many references to follow. However, there are concerns around the level of staff competencies that are required to efficiently engage with a wide range of technologies and resources and the ability to create suitable teaching strategies. There are also fears that students are not sufficiently prepared and independent for the nature of e-learning. Finally,

Innovation 4.0 and higher education  27 there is a question of whether higher education institutions would be able to cope with the variety and flexibility required to support flexible learning. There is growing pressure from students to provide more access to learning and for learning to be more flexible. Many institutions are exploring a variety of online learning technologies, which range from e-books and e-materials to podcasting, video conferencing, etc. There are various ways of incorporating technology into higher education (Taylor and Newton, 2013). Firstly, the adjunct model where the use of information and communication technology (ICT) enhances traditional face-to-face delivery. Secondly, a mixed model where a significant part of the module is offered in an online form. And finally, a wholly online mode where ICT is the leading form of teaching activities. As access to technology-supported teaching and learning swiftly increases (Chang et al., 2015; Ragulina et al., 2018), it is unquestionable that technology offers some exciting alternatives that can help enrich the traditional education system. The majority of people tend to believe that incorporating technology within teaching will help students better engage with module content and take a more proactive role in their learning. The existing and upcoming innovations offer a variety of tools that enable educators to create personalised learning where student can create their own pathway through learning content. Lecturers can customise virtual classroom content and resources as well as addressing the needs of a specific cohort of students (O’Connor and Domingo, 2017). The use of technology provides educators with a range of teaching approaches to support and enhance students’ learning experience and allows users to be immersed in a virtual environment by directly interacting with its content (Gonzalez-Gomez et al., 2016; Wong et al., 2014). However, focusing only on having the right technology is not enough to create a successful experience for students; what matters the most and is a key to successful delivery is making the online experience more engaging (Karaman and Ozen, 2016). Industry 4.0 and accompanying innovation allows the following types of teaching to appear: ·· ··

·· ··

Personalised learning – where the learning experience can be tailored to address the needs of an individual student or group of students. Synchronous and asynchronous delivery – a mixture of synchronous and asynchronous learning activities, where synchronous is represented by traditional lecture or live webinar and asynchronous includes email communications, chat, etc. Flexible learning – similar to personalised learning but with a greater emphasis on how the designed content adapts to an individual’s progress. This may comprise adaptive/flexi-level testing. Gamification – the use of game techniques (especially game mechanics) to encourage and motivate activities that can be particularly relevant to specific learning. The online environment provides learning with the game models of

28  Agnieszka Herdan

·· ··

players logging in, playing and interacting, making progress and then logging off matching some of the needs of flexible learning. Online learning – the use of internet-based e-learning to deliver the content of the module. Blended learning – a mix of physical/real-world interaction complemented by some form of e-learning. This is a hybrid approach that helps introduce elements of flexibility into traditional courses.

Blended learning The growing number of participants in higher education has resulted in increasing class sizes and growing dissatisfaction with student learning experiences. Blended learning can help to address some of those issues, as it can offer more students access to education and increase flexibility for staff and students (Garrison and Vaughan, 2013; Picciano et al., 2013). Higher education institutions are currently improving their teaching strategies by introducing various forms of information technology (Grabinski et al., 2015). This may take the form of e-learning, blended learning, distance learning, webbased learning or hybrid learning (Potter, 2015). The distinction between various forms of technology-enhanced learning very often is not clear (Nagal, 2009; Moskal et al., 2011; McGee and Reis, 2012; Dziuban et al., 2018). Expressions such as blended learning, e-learning, online learning, hybrid learning and IT-enhanced classroom experience are often synonymously used as a form of delivery that combines the traditional approach with various degrees of technology-enhanced learning. Blended learning is regarded as one of the forms of e-learning in which e-learning is combined with traditional classroom activities (Kavitha and Jaisingh, 2018). Nevertheless, Garrison and Kanuka (2004) emphasise that it is important to differentiate between those forms as they are using a different pedagogical and operational approach. It has been noted that even when authors use the name of blended learning, the underpinning pedagogy can vary. Volchenkova (2016) takes a rather wide approach by indicating that blended learning is a form of learning that combines the best of direct classroom learning and learning through the internet by using its applications. McGee and Reis (2012) adopt a similar pattern by implying that it is a combination of face-to-face and online activities, where pedagogically designed structure offers a substantial share of content online with planned module activities. However, the blended module is not just a simple combination of online and face-to-face activities, where face-to-face time has been replaced with online activity, but needs to be planned in a pedagogically valuable manner where the different elements complement each other and achieve set efficiency (Niemiec and Otte, 2005; Vaughan and Garrison, 2005). MacDonald (2006) identified three conceptualisations of blended learning: 1. Most narrow – students meet on campus and participate in asynchronous online activities.

Innovation 4.0 and higher education  29 2. More broad – utilisation of synchronous meetings and social network technologies blended with asynchronous work and possible face-to-face meetings. 3. Combination of campus-based and online students who interact but are physically separated. On the other hand, Bonk and Graham (2005) adopt a rather broad approach and indicate that the blended design can appear in three forms: ·· ·· ··

Enabling blends – these are built around enabling accessibility and convenience. Enhancing blends – these make incremental changes to the pedagogy but there are no fundamental changes to the way teaching and learning happens. Transforming blends – these permits fundamental transformation of the pedagogy where learners are active participants and construct knowledge through dynamic interactions that are only possible through using technology.

The first two forms represent previously discussed sustaining innovations, and the last form, transforming blends, will portray disruptive innovation. However, Christensen and Eyring (2011) as well as McCluskey and Winter (2012) indicate that all-online modules can be exemplars of disruptive innovations as they usually compel a re-evaluation of pedagogical traditions pedagogical approach. The most important aspect of a successful pedagogical strategy is smooth integration and transition between classroom activities and online learning experiences. Valiathan (2002) suggests a slightly different classification of blended learning models: 1. Skill-driven model – this focuses on learning specific knowledge and skills required. This combines self-learning with the support of a tutor. It requires creating a group-learning plan with paced self-directed learning that is bound to a strict schedule with a tutor-led overview of procedures and processes, summarised by closing synchronous online sessions or a traditional classroom setting and supported by email communication. 2. Attitude-driven model – this uses mixes of different media to develop new attitudes and behaviours that require peer-to-peer interaction and a risk-free environment. It usually includes synchronous web meetings (webinars) for assigned group projects to be completed offline and conducts role-playing simulations. Collaborative learning is facilitated through face-to-face sessions or technology-enabled collaborative events. 3. Competency-driven model – this mixes the tools of supporting performance with knowledge management resources and mentoring, aiming to improve workplace competencies. To capture and transfer tacit knowledge, learners must interact with and observe experts on the job. The transfer of tacit knowledge requires observing and interacting with experts on the job; activities may include a blend of online performance support tools with live mentoring.

30  Agnieszka Herdan There is a wide selection of tools that can be incorporated when designing the blended learning activities. This includes: ·· ·· ·· ·· ·· ··

Virtual collaboration through group work (including projects/case studies). Peer assessment. Computer-aided assessment in formative and summative form. Computer-based practice that can provide constant feedback and scaffolded students’ learning as well as addressing various students’ needs (e.g. MyLabs Platforms). Gamification – applying new approaches to engage and motivate students. Online simulation.

For blended learning to be efficient, relevant pedagogy needs to be incorporated. The VLE should not be used as a depository of teaching materials such as copies of lecture notes or tutorials exercises, as this way, there is no or little value added. Designing effective learning activities that complement each other is one of the biggest challenges, as it is argued that putting lecture recordings or slides online can discourage students from attending lectures and students can become disengaged from lectures. It must be stressed that blended learning allows the development of a variety of lifelong skills desired by employers including collaboration, reflection, agility, flexibility and independence (Garrison and Kanuka, 2004). In addition, it should be recognised that blended learning can minimise the dangers of social isolation that sometimes are associated with pure e-learning. However, one of the biggest constraints preventing educators from adopting blended learning is the amount of time that is required to design an efficient blend in comparison to traditional oncampus delivery as well as the amount of support that is expected by students over the period of blended delivery (Grabinski et al., 2020).

Benefits of blended learning Dziuban et al. (2018) indicate that advanced processes and tools such as learning analytics, adaptive learning, standardised peer review and automated scoring permit the saving of resources and allow lecturers to focus on human factors such as engaging in problem-solving, developing students’ creativity, providing more personalised feedback and more tailored pastoral care. This leads to a transformational breakthrough in student experience and the ability to create the feeling of belonging. When compared with face-to-face courses, blended learning increases student success and satisfaction (Dziuban and Moskal, 2011; Moskal et al., 2011; Means et al., 2013), as well as improving students’ sense of community and belonging (Rovai and Jordan, 2004). In addition, the great benefit of blended learning is the transformation in students’ behaviour from being passive learners to active ones (Keržič et al., 2018). As part of the learning happens at a distance, students can decide on the time and pace appropriate to their needs (Kimathi and Zhang, 2019).

Innovation 4.0 and higher education  31 It also allows for more effective use of classroom time, enhances student engagement by active participation and better prepares them for future career pathways (Susan and Chris, 2015). Moreover, it allows students to learn and access material in a variety of modes which address students’ different learning styles and allows them to work around a variety outside-university commitments (work, family, hobbies) offering some level of control regarding their learning pathway (Van Laer and Elen, 2017) as well as the speed of learning by following their own trajectory of learning (Horn and Staker, 2014). This flexibility can improve their performance and motivation and increase students’ chances of achieving course outcomes (Owies, 2018; Handayani, 2018). The interactive content enables lecturers to develop a high level of interest and accountability. It allows individualisation, personalisation and tailoring the module content to the specific needs of different audiences. These factors as well as the accessibility and flexibility offered by blended learning helps students with studying and planning their own learning (Smyth et al., 2012). So, by combining traditional classroom instruction with online learning, learners have access to a customised education pathway (Horn and Staker, 2011). Students very often emphasise that blended learning offers flexibility in terms of where they can study, what path of learning they can pursue and the pace of learning they can select (Bonk and Graham, 2005; Korr et al., 2012; Lertnattee and Pamonsinlapatham, 2017; Porter et al., 2014; Horn and Staker, 2011; Osguthorpe and Graham, 2003). So, by utilising blended learning, students have greater flexibility to manage the location, time, pace and content of their learning (Powell et al., 2015). Tutors also have a greater ability to customise guidance and activity given to students based on the up-to-date observation of individual student progress and abilities (Horn and Staker, 2011; Powell, et al., 2014; Freeland, 2015). This ability to differentiate and offer a more tailored approach improves the studying process of diverse student populations (Powell et al., 2015). In addition, the big advantage of employing blended learning is a very structured, clear and regular learning process. It has also been observed that through adopting a blended learning approach and shifting some content online, students’ in-class problem-solving skills can be enhanced as well as students’ attendance and satisfaction increased (Stockwell et al., 2015; Sergis et al., 2018). In some cases, blended learning can lead to decreased drop-out rates and increased exam pass rates (López-Pérez et. al., 2011). As stressed by Grabinski et al. (2020), blended learning offers lifelong competencies and the development of students’ social competencies. According to De George-Walker and Keeffe (2010) some of the higher education institutional needs can be resolved by effective integration of blended learning, as it can offer various transformative solutions to some of the problems with student learning and it leads to a significant shift in the nature and quality of education.

Successful blended learning Properly embedded blended learning requires “fundamental reconceptualization and reorganization of the teaching and learning dynamic” (Garrison and Kanuka,

32  Agnieszka Herdan 2004: 97). Having a suitable technology solution available is not a sufficient factor to make blended learning successful. It is necessary to have collaborative leadership engagement to successfully implement blended learning (Garrison and Vaughan, 2013). The basic approach, such as incorporating online activities into an already existing module, may not be enough. Some educators strongly believe that the module should be designed from scratch (Garnham and Kaleta, 2002; Johnson and Voelker-Morris, 2007; MCC, 2009). However, the redesign is not a short fix and can take at least three to six months (Aycock et al. 2002; Johnson and Voelker-Morris, 2007; Shibley, 2009; Crummett et al., 2010). Many authors emphasise that setting proper module objectives is critical for blended learning design to be successful. The module objectives have a direct impact on the pedagogical approach that needs to be used and as a result, this drives the selection of the most suitable online tools (platform, systems) and the design of the most appropriate online and on-campus activities (Johnson and Voelker-Morris, 2007; MMC, 2009). The shift from an educator-directed concept to a learner-centred one needs to be clearly seen in the design and students have to be aware that now the bigger responsibility for learning is on them. So, educators who decided to apply the blended learning approach need to use an appropriate and efficient didactic approach (Grabinski et al., 2020). There are three factors that need to be considered when designing an efficient blended learning module: Module aims and objectives, teaching strategies (pedagogy) and selection of suitable technology (Figure 2.1). The well-thought-through architecture of all module activities and assessments is essential for successful blended learning delivery. Firstly, it should be decided what is the optimum combination between online and on-campus activities. This can be determined by specifics of the discipline, programme design or institution policies. A clear pathway should be designed that clearly indicates when, where and how students should actively engage with various aspects of the module and how online activities relate to the on-campus activities. Blended learning modules are most successful when activities are challenging and engaging, and online tasks complement face-to-face ones. There are various media tools that can be used in blended learning in formal and informal ways (see Figure 2.2). Live online sessions, also known as a virtual classroom, are based on instructor-led training (ILT) activities and usually focus on complex, broad or new content that requires face-to-face interaction, expert knowledge, problem-solving or materials to be presented by an instructor or facilitator (Woodall, 2010). They usually provide access to peers and experts or offer group discussion. They can be engaging and offer additional insights into a topic. These events are usually conducted through the use of virtual meeting tools such as Zoom, MS Teams, Blackboard Collaborate, Adobe Connect, Cisco WebEx or Big Blue Button. Although currently on the market there is a wide range of solutions that allow remote teaching, instant messaging, file sharing, screen sharing and video meetings with individual or multiple participants. It is usually an institutional decision which

Innovation 4.0 and higher education  33

Curriculum Design

Teaching Strategies

Teaching Excellence and Innovation in Support of Student Learning

Technology Integration

Figure 2.1   Course redesign outcomes for faculty participants. Source: Garrison and Vaughan, 2013.

solution will be adopted. As always, the suitability for its own type of students and cost implication need to be considered. In addition, the impact on educator workload, quality of teaching and accessibility for students need to be considered. There are quite a few key factors that will impact lectures’ workload and efficiency of delivery (The Oxford Group, 2013). Firstly, what software will be used to record or deliver online sessions and what the bandwidth usage of the software is on the university side as well as the students’ side (stability of internet connection). Secondly, the simplicity of scheduling, joining and recording meetings is key as, in some systems, it can be a bit complicated and then will impact students’ experience and engagement. Then not all suppliers offer the ability to share the screens by the presenters as well as participants and for some numeric modules, this can be a crucial aspect of functionality. Subsequently, the ability for collaborative work such as live chat, audience polling, Q&A, and file-sharing during a live session is important as this will impact the design of online activities. Furthermore, the level of security such as user authentication, permissions and confidential attendee lists should be considered, as well as, finally, accessibility via a mobile app. Not every provider offers such a solution and not every student has access to their own laptop or desktop and accessing via a browser link is not always easy or even possible on a mobile phone or tablet. The easier and more straightforward it is to access, the better the experience and willingness to engage from students.

34  Agnieszka Herdan

Figure 2.2  Media used in blended learning. Source: Own work based on “Strategies for Building Blended Learning,” Rossett et al. (2003).

For blended learning to be successful it needs to be properly introduced to students. It is not enough to just integrate technology and online activities into the programmes or modules. The key is students’ perception and engagement with this pedagogical approach. There is a significant correlation between higher achievers and positive perception, who found blended learning format more engaging and convenient. On the contrary, lower achiever found it difficult to engage with the blended learning environment. Lack of personal social interaction is one of the major downsides of online activities emphasised by students. They stress that there is more social interaction and it works better in the traditional method (Smyth et. al., 2012). There are three areas where challenges for blended learning happen (Hofmann, 2011; LS, 2020; see Figure 2.3). First are technology challenges and how to ensure that students will successfully adapt to efficiently use the technology. Poor internet connection may exclude some students from efficient engagement with a blended learning system and in some cases put them off completely (Smyth et. al., 2012). Additionally, avoid adopting any available technology simply because it is there, as it may not be suitable for these students, type of module or discipline. Educators need to think carefully and make sure that whatever they decide

Innovation 4.0 and higher education  35

Figure 2.3  Challenges in the efficient adoption of blended learning. Source: Own work based on Hofmann (2011) and LS (2020).

to adopt fits the purpose. If possible, it would be good to conduct a pilot test to evaluate the pros and cons. Second are organisational challenges and overcoming the fear that blended learning cannot be as effective as traditional face-to-face learning. The activities that are part of a blended learning design cannot be just a simple conversion of currently run on-campus activities. They need to be designed based on carefully selected relevant pedagogies (Owston et al., 2013). Subsequently, a proper introduction to the entire experience of blended learning needs to be provided to students. This should explain the process behind using specific technology, active participation, task completion requirements and self-directed learning. Students as well as educators need to fully understand the changing role of lecturers as there is a shift from teaching and providing the knowledge to facilitating knowledge acquisition by students and helping them develop necessary lifelong skills. Managing and monitoring participant progress can prove a burden. From the beginning, clear criteria and pathways need to be explained so that students are not “lost in cyberspace.” The completion of specific formative, summative assessment as well as self-directed activities can be monitored via specific tools available within a VLE system without significantly increasing lecturers’ workload.

36  Agnieszka Herdan It has to be noted that, in the majority of cases, students have not been exposed to blended learning prior to joining higher education and there are a number of skills that are required to successfully participate in blended learning. These are time management, discipline, organisation, technology savvy and self-efficacy (McDonald, 2014). Self-regulated and high-achieving students usually already possess those skill and can efficiently participate in the blended learning process (Owston et al., 2013). However, low-achieving students might not have those essential skills for independent learning and processes, and lecturer support that will facilitate those students’ learning processes is required. Third are instructional and design challenges. For generations the focus in education was on content delivery, which means what lecturers need to teach their students. However, with blended learning, there is a shift from what you deliver to how you deliver/facilitate students’ learning. More effort should be placed on the design of appropriate content and then how technology can be used to complement it and make it engaging and interesting. Selecting the right technology should be the last step of the design process. Sometimes it can be difficult when the institution already made the decisions as to what technology will be embedded. Then the lecturer needs to make relevant adjustments to the design to accomplish the agreed set of learning objectives. The online task and activities can’t be just a simple conversion of face-to-face in-class activities. The lecturer needs to move away from the “talking at” participants approach and design interactive activities. The self-paced learning task should be a 12-to-20-minute maximum per topic (Hofmann, 2011). If content demands more than 12 minutes, it needs to be divided into smaller pieces. The designing team needs to try to find a way for students to actively participate, e.g. a mentimeter quiz, comments on chat/wiki or breakout exercises. If possible, this should take place every three to five minutes for students not to lose interest and for the activity to be engaging. The “non-live” elements should complement the live activities. The design should be realistic as to how much self-learning students can cope with. It needs to be considered that students have various external commitments (work and domestic), they are at various life stages and they have various aspirations. Finally, it would be good if a visual course map with a suggested schedule for self-learning tasks can be prepared so the students can clearly see the path they following and how all elements are fitting in together, where to find relevant materials and links to live sessions. In addition, clear communication channels need to be established, so that students do not feel isolated. Furthermore, blended learning also faces numerous institutional challenges, arising from the implementation and development of such an approach. This includes policies, resources, action plans and faculty support (Garrison and Vaughan, 2013). The institutional support for module redesign and planning is crucial for blended learning to be successful (Moskal et al., 2013; Dringus and Seagull, 2011; Tynan et al., 2013). The efficient adoption of blended learning requires several steps (Garrison and Kanuka, 2004):

Innovation 4.0 and higher education  37

1. Development of relevant policies. 2. Operational support. 3. Strategic and operational planning. 4. Appropriate assessment of resources. 5. Suitable scheduling (weekly, block, etc.). 6. Relevant provision of support for staff and students.

Many of these issues can be mitigated through leadership, sharing awareness, faculty engagement and well-designed technology training. Even though learning technologies provide a great number of new opportunities, there are also some limitations that need to be considered such as collaborative learning, plagiarism and selection of tools and resources. In addition, for blended learning to be efficient there must be a good level of ICT such as easy access and good network infrastructure. Generally, there is an assumption that students have sufficient hardware and reliable internet service; however, in practice some students will struggle to adapt to the new learning environment because they may have limited access to technology, be less experienced with technology and be fearful of new unknown learning approaches.

Conclusion The development of information technology, new innovative communication tools and changes in the global economy have revolutionised the delivery methods the educators use in their teaching and the ways students learn. With a growing number of students, easier access to mobile technology through more affordable prices and rising expectations of more flexible and personalised learning, higher education institutions try to accommodate those needs. The way current students act and learn has changed with generation Z entering universities with a tablet and a smartphone in their hands. The expectation is that educators need to include technology in their modules and deliver technology-friendly learning experiences. Blended learning is one of the solutions that can assist in this process. For the educators to design a suitable blend between online and face-to-face activity can be challenging and time-consuming, particularly if they need to accommodate the needs of different types of learners, different learning styles and different contexts. For higher education institutions, it may be difficult to select the most suitable technology for their students due to diversified students cohorts, additional support required and, most of all, budgets constraints. Assessing the digital capability of students may prove to be challenging, especially those who are just joining the university. It is difficult to know what type of learning environment students has been exposed to (what digital learning tools they used in the past) and what they feel comfortable with (what helps them to learn). Do they have their own device (laptop/tablet, etc.) or do they need to share? What internet connection do they have access to? Adapting the module to blended learning or fully online delivery can pose a great challenge, especially with more numerical or technical subjects. Matching

38  Agnieszka Herdan intended learning outcomes with the most suitable activities that will help students to learn can sometimes be problematic. The current situation with COVID-19 forced education institutions across the globe to move teaching to some form of online delivery. Some applied blended learning and others had to go for full online mode. Although the adaptation to this new form of delivery varies across institutions and across countries there will be a growing number of modules delivered in these ways. In this new scenario, it can be complicated to find effective communication channels, creating a sense of community and belonging and at the same time not overburdening students with the flow of information. Creating a clear and well-balanced structure of activities that will help deliver content in an engaging and exciting way could sometimes be difficult to accomplish. There are six well-known types of learning activities that could assist with the design of a well-balanced mix of learning activities. These are acquisition, collaboration, practice, discussion, investigation and production. Unfortunately, very often only acquisition and discussion (i.e. read/watch something, then talk about it) is used, or acquisition and practice (i.e. read/watch something, then apply it in the case study). Wherever and whenever possible, all six types should be included across the whole module. There should be an explicit connection and movement from one activity to another. Students need to be clear about why completing one activity leads to the next and why they need to be in a specific order. The designers need to prepare clear instruction for students to guide them through the learning content so they know what to do, for example, watch and apply knowledge to a specific example, read and summarise, view and complete a quiz. On students’ side, they need to develop good self-managed learning skills to be able to succeed in their learning. Although it has been stressed that blended learning offers a lot of flexibility, the current situation with COVID-19 shows that in many cases staff as well as students may be operating under various constraints. Some of the content in the design phase that was planned to be delivered on campus may be required to move online due to governmental or university policies. They may be a time when some of your students will not be able to join on-campus sessions due to a sudden necessity of self-isolation and lectures need to be prepared to accommodate that. That means designing a backup plan for those scenarios.

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40  Agnieszka Herdan Freeland, J. (2015), Three False Dichotomies in Blended Learning, San Mateo, CA: Clayton Christensen Institute. Garnham, C., and Kaleta, R. (2002), ‘Introduction to hybrid courses’, Teaching with Technology Today, 8(6) [online]. Available at: http:​/​/www​​.uwsa​​.edu/​​ttt​/a​​rticl​​es​/ga​​​ rnham​​.htm (Accessed: 12.05.2020) Garrison, D. and Kanuka, H. (2004), ‘Blended learning: uncovering its transformative potential in higher education’, The Internet and Higher Education, 7 (2), pp. 95–105. DOI: 10.1016/j.iheduc.2004.02.001 Garrison, D. and Vaughan, N. (2013), ‘Institutional change and leadership associated with blended learning innovation: two case studies’, The Internet and Higher Education. 18, July, pp 24–28. DOI: 10.1016/j.iheduc.2012.09.001 González-Gómez, D., Jeong, J.S., Airado Rodríguez, D., Cañada-Cañada, F. (2016), ‘Performance and perception in the flipped learning model: an initial approach to evaluate the effectiveness of a new teaching methodology in a general science classroom’, Journal of Science Education and Technology, 25(3), pp. 450–459. DOI: 10.1007/s10956-016-9605-9 Grabinski, K., Kedzior, M., and Krasodomska, J. (2015), ‘Blended learning in tertiary accounting education in the CEE region: a polish perspective’, Accounting and Management Information Systems, 14 (2), pp. 378–397. Grabinski, K. Kedzior M., Krasodomska J. Herdan A (2020) ‘Embedding E-learning in accounting modules: the educators’ perspective’, Education Sciences, 10(4). DOI: 10.3390/educsci10040097. Available at: https​:/​/ww​​w​.mdp​​i​.com​​/2227​​-7102​​/10​/4​​​/97​#c​​ ite Handayani, S. (2018), ‘Impact of blended learning on student learning result in microeconomics course’, Classroom Action Research Journal, 2(3), pp. 33–140. Hauschildt, K., Vogtle, E.M., and Gwosc, C (2018), ‘Social and economic conditions of students life in Europe, synopsis of indicators, final report’, in Eurostudent VI 2016– 2018, Bielefeld: Bertelsmann Verlag. Heijke, H., Meng, C., and Ramaekers, G. (2002), ‘An Investigation into the Role of Human Capital Competences and Their Pay-Off’, Research Memorandum, Maastricht: ROA. DOI: 10.26481/umaror.200203E Hofmann J. (2011), ‘Top 10 challenges of blended learning’, Soapbox, [online]. Available at: https​:/​/st​​atic1​​.squa​​respa​​ce​.co​​m​/sta​​tic​/5​​c2e89​​bcf40​​7b45d​​cc793​​138​/t​​/5c88​​1dedc​​ 83025​​bffb5​​32832​​/1552​​42443​​2575/​​Solut​​ionst​​otheT​​op10C​​halle​​ngeso​​f​Blen​​dedLe​​arnin​​ g+​%28​​1​%29.​​pdf (Accessed: 12.07.2020). Horn, M.B., and Staker, H. (2011), ‘The rise of K-12 blended learning’, Innosight Institute, 5. [online]. Available at: https​:/​/fi​​les​.e​​ric​.e​​d​.gov​​/full​​text/​​ED5​35​​181​.p​​df (Accessed: 15.04.2020). Horn, M.B., and Staker, H. (2014), Blended: Using Disruptive Innovation to Improve Schools. Hobken, NJ: Wiley. Jackson D., Hancock P. (2010), ‘Non-technical skills in undergraduate degrees in business: development and transfer’, Education Research and Perspectives, 37(1), pp. 52–84. Johnson, J.Q. and Voelker-Morris, R. (2007), ‘Course redesign for hybrid learning’, University of Oregon [online]. Available at: http:​/​/www​​.nwel​​earn.​​org​/c​​onfer​​ence/​​ 2007.​​slide​​s​/jqj​​ohnso​​n​%20​r​​edesi​​gn​.pd​f (Accessed 20.05.2020). Kagermann, H. (2014), ‘Chancen von industrie 4.0 nutzen’, in T. Bauernhansl, M. ten Hompel and B. Vogel-Heuser, (eds.), Industrie 4.0 in Produktion, Automatisierung und Logistik. Anwendungen Technologien Migration (pp. 603–614), Wiesbaden: Springer.

Innovation 4.0 and higher education  41 Karaman, M.K., and Ozen, S. (2016), ‘A survey of students’ experiences on collaborative virtual learning activities based on five-stage model’, Journal of Educational Technology and Society, 19(3), pp. 247–259. Kavitha, R., and Jaisingh, W. (2018), ‘A study on the student experiences in blended learning environments’, International Journal of Recent Technology and Engineering, 7(4S), pp. 2277–3878. Keržič, D., Umek, L., Tomaževič, N., and Aristovnik A. (2018) ‘Evaluating the impact of e-learning on students’ perception of acquired competencies in a university blended learning environment’, Journal of e-Learning and Knowledge Society, 14(3), pp. 65–76. Kimathi, F., and Zhan Y. (2019), ‘Exploring the general extended technology acceptance model for e-learning approach on student’s usage intention on e-learning system in University of Dar es Salaam’ Creative Education, 10(1), pp. 208–223. DOI: 10.4236/ ce.2019.101017 Korr, J., Derwin, E.B., Greene, K., Sokolof, W. (2012), ‘Transitioning an adult serving university to a blended learning model’, The Journal of Continuing Higher Education, 60, pp. 2–11. DOI: 10.1080/07377363.2012.649123 Lertnattee V., Pamonsinlapatham P. (2017), ‘Blended learning for improving flexibility of learning structure query language (SQL)’, in Cheung S., Kwok L., Ma W., Lee LK., and Yang H. (eds.), Blended Learning. New Challenges and Innovative Practices. ICBL 2017. Lecture Notes in Computer Science, vol. 10309, Cham: Springer. Liu, Y. and Xu X. (2017), ‘Industry 4.0 and cloud manufacturing: a comparative analysis’, Journal of Manufacturing Science and Engineering, 139(3), pp. 34–70. DOI: 10.1115/1.4034667 López-Pérez M.V., López-Pérez M., Rodríguez-Ariza, L. (2011), ‘Blended learning in higher education: students’ perceptions and their relation to outcomes’, Computers and Education, 15(3), pp. 818–826. DOI: 10.1016/j.compedu.2010.10.023 LS: Learning Solution (2020), ‘Solutions to the top blended learning challenges’ [online]. Available at: http:​/​/ftp​​.lear​​nings​​oluti​​onsma​​g​.com​​/arti​​cles/​​solut​​ions-​​to​-th​​e​-top​​-blen​​ded​ -l​​e​arni​​ng​-ch​​allen​​ges (Accessed: 8.07.2020). MacDonald, J. (2006), Blended Learning and Online Tutoring: A Good Practice Guide, Aldershot, UK: Gower Publishing Co. MCC: Maricopa Community Colleges (2009), ‘Best practices for hybrid’, Mesa Community College Instruction [online]. Available at: https​:/​/ww​​w​.mes​​acc​.e​​du​ /si​​tes​/d​​efaul​​t​/fil​​es​/pa​​ges​/s​​ectio​​n​/ele​​arnin​​g​/bes​​t​​_pra​​ctice​​s​_hyb​​rid​.p​​df (Accessed: 20.05.2020). McCluskey, F.B., and Winter, M.L. (2012), The Idea of the Digital University: Ancient Traditions, Disruptive Technologies, and the Battle for the Soul of Higher Education, Washington, DC: Westphalia Press. McDonald, P.L. (2014), ‘Variation in adult learners’ experiences of blended learning in higher education’, Blended Learning: Research Perspectives, 2, pp. 215–234. McGee P., and Reis A. (2012), ‘Blended course design: a synthesis of best practices’, Journal of Asynchronous Learning Networks, 16(4), pp. 7–22. Means, B., Toyama, Y., Murphy, R., and Baki, M. (2013), ‘The effectiveness of online and blended learning: a meta-analysis of the empirical literature’, Teachers College Record, 115(3), pp. 1–47. Michalos, G., Makris, S., Spiliotopoulos, J., Misios, I., Tsarouchi, P., Chryssolouris, G. Robopartner (2014), ‘Seamless human-robot cooperation for intelligent, flexible and safe operations in the assembly factories of the future’, Procedia CIRP, 23, pp. 71–76.

42  Agnieszka Herdan Michalos, G., Makris, S., Tsarouchi, P., Guasch, T., Kontovrakis, D., Chryssolouris, G. (2015), ‘Design considerations for safe human-robot collaborative workplaces’, Procedia CIRP, 37, pp. 248–253. Moskal, P., Dziuban, C., Hartman, J., and Cavanagh, T. (2011), ‘Blended courses as drivers of institutional transformation’, In A. Kitchenham (ed.), Blended Learning Across Disciplines: Models for Implementation (pp. 17–37), Hershey: IGI Global. Mustafa Kamal, N.N., Mohd Adnan, A.H., Yusof, A.A., Ahmad, M.K., Mohd Kamal, M.A. (2019), ‘Immersive interactive educational experiences: adopting education 5.0, industry 4.0 learning technologies for Malaysian universities’, in MNNF Network (ed.), Proceedings of the International Invention, Innovative and Creative (InIIC) Conference, Series 1/2019, pp. 190–196, Senawang: MNNF Network. Nagal, D. (2009), ‘Meta-analysis: is blended learning most effective?’, The Journal [online]. Available at: http:​/​/the​​journ​​al​.co​​m​/art​​icles​​/2009​​/07​/0​​1​/met​​a​-ana​​lysis​​-is​-b​​ lende​​d​-lea​​rning​​​-most​​-effe​​ctive​​.aspx​(Accessed 8.07.2020). Niemiec, M., and Otte, G. (2005) Blended Learning in Higher Education: A Report from the Sloan-C 2005 Workshop, Needham, MA: Sloan-C. O'Connor, E.A., and Domingo, J. (2017), ‘A practical guide, with theoretical underpinnings, for creating effective virtual reality learning environments’, Journal of Educational Technology Systems, 45(3), pp. 343–364. DOI: 10.1177/0047239516673361 Orr, D., Gwosc, C., and Netz, N. (2010), ‘Social and Economic conditions of students life in Europe, Synopsis of Indicators, Final Report’, Eurostudent IV 2008–2011, Bielefeld: Bertelsmann Verlag. Osguthorpe, R.T., and Graham, C.R. (2003), ‘Blended learning systems: definitions and directions’, Quarterly Review of Distance Education, 4(3), pp. 227–234. Owies T.I. (2018), ‘Effects of using a blended learning method on students’ achievement and motivation to learn english in Jordan: a pilot case study’, Education Research International, 2018, Article ID 7425924. DOI: 10.1155/2018/7425924 Owston, R., York, D., and Murtha, S. (2013), ‘Student perceptions and achievement in a university blended learning strategic initiative’, The Internet and Higher Education, 18, pp. 38–46. DOI: 10.1016/j.iheduc.2012.12.003 Picciano, A.G., Dziuban, C.D., and Graham, C.R. (eds.). (2013), Blended Learning: Research Perspectives (Vol. 2), London: Routledge. Porter, W.W., Graham, C.R., Spring, K.A., and Welch, K.R. (2014), ‘Blended learning in higher education: institutional adoption and implementation’, Computers and Education, 75, pp. 185–195. DOI: 10.1016/j.compedu.2014.02.011 Potter, J. (2015), ‘Applying a hybrid model: can it enhance student learning outcomes?’, Journal of Instructional Pedagogies, 17, pp. 1–11. Powell, A., Rabbitt, B., and Kennedy, K. (2014), Blended learning teacher competency framework. International Association for K-12 Online Learning. DOI: 10.21125/ iceri.2016.0984 Powell, A., Watson, J., Staley, P., Patrick, S., Horn, M., Fetzer, L., Verma, S. (2015), Blending Learning: The Evolution of Online and Face-to-Face Education from 2008– 2015, Promising Practices in Blended and Online Learning Series, Michigan; Nevada; New York; North Carolina; Pennsylvania; Utah; Washington: International Association for K-12 Online Learning. Ragulina, Y.V., Semenova E.I., Zueva, I.A. Kletskova, E.V., and Belkina E.N. (2018), ‘Perspectives of solving the problems of regional development with the help of new internet technologies’, Entrepreneurship and Sustainability Issues, 5, pp. 890–898. DOI: 10.9770/jesi.2018.5.4(13)

Innovation 4.0 and higher education  43 Rossett, A., Douglis, F., Frazee, R.V. (2003), ‘Strategies for building blended learning’, https​:/​/ad​​min​.u​​mt​.ed​​u​.pk/​​Media​​/Site​​/UMT/​​SubSi​​tes​/c​​tl​/Fi​​leMan​​ager/​​CTL​/Q​​ueens​​/ Stra​​tegie​​s​%20B​​uildi​​ng​%2​0​​Blend​​ed​%20​​Learn​​ing​.p​​df (Accessed 8.07.2020). Rovai, A.P., and Jordan, H. (2004), ‘Blended learning and sense of community: a comparative analysis with traditional and fully online graduate courses’, The International Review of Research in Open and Distributed Learning, 5(2). DOI: 10.19173/irrodl.v5i2.192 Roy, S., and Edan, Y. (2018), ‘Investigating joint-action in short-cycle repetitive handover tasks: the role of giver versus receiver and its implications for human–robot collaborative system design’, International Journal of Social Robotics, 12(5), pp. 973–988. DOI: 10.1007/s12369-017-0424-9 Schwab, K., and Davis, N. (2018), Shaping the Fourth Industrial Revolution, Geneva: World Economic Forum. Sergis, S., Sampson, D.G., and Pelliccione, L. (2018), ‘Investigating the impact of flipped classroom on students’ learning experiences: a self-determination theory approach’, Computers in Human Behavior, 78, pp. 368–378. DOI: 10.1016/j.chb.2017.08.011 Shibley, I. (2009), Blended Course Design, Magna Publications [online]. Available at: http:​/​/www​​.magn​​apubs​​.com/​​catal​​og​/bl​​ended​​-lear​​ning-​​cours​​e​-des​​ig​n​-w​​hitep​​aper/​ (Accessed: 20.05.2020). Smyth, S., Houghton, C., Cooney, A., and Casey, D. (2012), ‘Students’ experiences of blended learning across a range of postgraduate programmes’, Nurse Education Today, 32(4), pp. 464–468. DOI: 10.1016/j.nedt.2011.05.014 Someshwar, R., Meyer, J., and Edan, Y. (2012), ‘Models and methods for H-R synchronization’, IFAC Proceedings Volumes, 45(6), pp. 829–834. DOI: 10.3182/20120523-3-RO-2023.00250 Stockwell, B.R., Stockwell, M.S., Cennamo, M., and Jiang, E. (2015), ‘Blended learning improves science education’, Cell, 162(5), pp. 933–936. DOI: 10.1016/j.cell.2015.08.009 Summers, L.H. (2014), ‘Lawrence H. Summers on the economic challenge of the future: jobs’, [online]. Available at: http:​//​www​​.wsj.​​com​/a​​rticl​​es​/la​​wrenc​​e​-h​-s​​ummer​​s​-on-​​the​ -e​​conom​​ic​-ch​​allen​​ge​-of​​-the-​​f​utur​​e​-job​​s​-140​​47625​​01 (Accessed: 27.05.2020). Susan, P., Chris S. (2015), ‘Maximising competency education and blended learning: insights from experts’, in CompetencyWorks, [online]. Available at: https​:/​/au​​rora-​​insti​​ tute.​​org​/w​​p​-con​​tent/​​uploa​​ds​/Co​​mpete​​ncyWo​​rks​-M​​aximi​​zing-​​Compe​​tency​​-Educ​​ation​​ -and-​​​Blend​​ed​-Le​​arnin​​g​.pdf​(Accessed: 15.04.2020). Taylor J.A., and Newton, D. (2013), ‘Beyond blended learning: a case study of institutional change at an Australian regional university’, The Internet and Higher Education, 18, pp. 54–60. DOI: 10.1016/j.iheduc.2012.10.003 The Oxford Group. (2013), Blended Learning: Correct Use, Challenges and Best Practices, Report 2013. [online]. Available at: http:​//​www​​.clic​​k4it.​​org​/i​​mages​​/c​/c2​​/Blen​​ded​_L​​ earni​​ng​_Re​​port_​​2013_​​O​xfor​​d​_Gro​​up​.pd​f (Accessed: 30.05.2020). Tsarouchi, P., Michalos, G., Makris, S., Athanasatos, T., Dimoulas, K., and Chryssolouris, G. (2017), ‘On a human–robot workplace design and task allocation system’, International Journal of Computer Integrated Manufacturing. 30(12), pp. 1272–1279. DOI: 10.1080/0951192X.2017.1307524 Tynan, B., Ryan, Y., and Lamont-Mills, A. (2013), ‘Examining workload models in online and blended teaching’, British Journal of Educational Technology, 46(1), pp. 5–15. DOI: 10.1111/bjet.12111 Valiathan P. (2002), Blended Learning Models [online]. Available at: http:​//​www​​.purn​​ima​ -v​​aliat​​han​.c​​om​/wp​​-cont​​ent​/u​​pload​​s​/201​​5​/09/​​Blend​​ed​-Le​​arnin​​g​-​Mod​​els​-2​​002​-A​​STD​.p​​ df (Accessed: 15.05.2020).

44  Agnieszka Herdan Van Laer, S., and Elen, J. (2017), ‘In search of attributes that support self-regulation in blended learning environments’, Education and Information Technologies, 22(4), pp. 1395–1454. DOI: 10.1007/s10639-016-9505-x Vaughan, N., and Garrison, D.R. (2005), ‘Creating cognitive presence in a blended faculty development community’, Internet and Higher Education, 8(1), pp. 1–12. DOI: 10.1016/j.iheduc.2004.11.001 Villani, V., Pini, F., Leali, F., and Secchi, C. (2018) ‘Survey on human–robot collaboration in industrial settings: safety, intuitive interfaces and applications’, Mechatronics, 55. DOI: 10.1016/j.mechatronics.2018.02.009 Volchenkova, K. (2016), ‘Blended learning: definition, models, implication for higher education’, Education Sciences, 8(2), pp. 24–30. White, S.C. and Glickman, T.S. (2007), ‘Innovation in higher education: implications for the future’, New Directions for Higher Education, 137, pp. 97–105. DOI: 10.1002/ he.248 World Economic Forum (WEF) (2014), The Europe 202 Competitiveness Report: Building a More Competitive Europe in the Framework of The Global competitiveness and Benchmarking Network, [online]. Available at: http:​//​www​​3​.wef​​orum.​​org​/d​​ocs​/W​​EF​ _Eu​​rope2​​020​_C​​ompet​​itive​​nessR​​​eport​​_2014​​.pdf (Accessed: 10.03.2020). Worldwide Instructional Designing System (WIDS) (2019) Lifelong Learning skills in curriculum, Worldwide Instructional Designing System, [online]. Available at: https​:/​/ ww​​w​.wid​​s​.org​​/RESO​​URCES​​/RESO​​URCE-​​LIBRA​​RY​/AR​​TMID/​​1668/​​ARTIC​​LEID/​​ 96​/LI​​FELON​​G​-LEA​​RNING​​-​SKIL​​LS​-IN​​-CURR​​ICULU​M (Accessed: 10.05.2020). Wong, L., Tatnall, A., and Burgess, S. (2014), ‘A framework for investigating blended learning effectiveness’, Education and Training, 56(2/3), pp. 233–251, DOI: 10.1108/ ET-04-2013-0049 Woodall, D. (2010), ‘Blended learning strategies: selecting the best instructional method’, White Paper, August 2010, [online]. Available at: http:​/​/cla​​sstap​​.pbwo​​rks​.c​​om​/f/​​Skill​​ Soft+​-​+Ble​​nded+​​El​ear​​ning.​​pdf (Accessed: 8.06.2020).

Part 2

Innovation in the industrial sector





3

Prerequisites of innovativeness in industry 4.0 Zbigniew Makieła and Tomasz Kusio

Introduction Innovativeness continues to constitute a valid and important scientific theme, which is ascertained not only by the scientific papers published nationally and abroad and the magazines devoted to innovations and entrepreneurship but also by the need for economic development at the organisational, regional and country levels and in a global dimension. By taking into consideration the prerequisites of the current innovative processes as one of the key characteristics, it is necessary to acknowledge the fourth industrial revolution as well as the associated changes in the functioning and dynamics of innovativeness. It is acknowledged that the technologies that are strongly associated with the fourth industrial revolution do not merely constitute the elements of this revolution, but evoke changes in terms of the basis of competitiveness (D’Aveni, 2017).1 The directions of the changes in the competitiveness of modern-day enterprises are decided by the advantages relating to the reduction of costs, increase in quality and increase in the value of goods and services, as well as first and foremost the agility of the organisation, which may be expressed during the period of implementing changes to the goods and services (McKinsey, 2015).2 This is closely reflected in the innovative processes and determines the innovative intensity (Kusio, 2019).3 Innovativeness and particularly its dynamics may be acknowledged as the key factor of success. It is also perceived to be an important attribute of economies, sectors and organisations themselves (Romanowska, 2015).4 The perception of innovativeness with reference to entire economies, particular sectors and individual organisations constituted the subject matter of scientific deliberations from a long-term perspective (Kraśnicka and Ingram, 2014), while mutual dependencies between the particular levels of innovativeness are acknowledged. The more innovative the organisations are in a given economy and territory, the more innovative the region or country is. The more intensive the innovative processes are, the greater the number of innovations they should be identified with. Differentiation in the definitions between innovations and innovativeness is distinguished by classifying innovativeness as the ability to create and implement innovations (Dziurski, 2019).5 Simultaneously, the mutual dependencies between DOI:  10.4324/9781003184065-3

48  Zbigniew Makieła and Tomasz Kusio innovativeness and competitions are sought out by pursuing the existence of these dependencies in among others, the mutual impact of innovativeness on various levels, in accordance with the principle that the greater percentage of innovative enterprises in a particular sector, the more this sector or economy is featured by innovativeness. Apart from political slogans relating to an innovative economy that is evident in Poland, it is also worthwhile by taking account of the national level of innovativeness, in which the discussion becomes a strong part of the legislative trends and the frantic updating of legislative acts that are to support the growth of innovativeness. These issues start at the governmental level and finish with the regulations and directives of individual organisations. All of this is in the name of innovativeness, which by all means constitutes the right notion. Nevertheless, to what degree may innovativeness be stimulated and is it better to stimulate it without the danger of the unintentional hindering of the actual innovative processes? A similar dilemma also refers to the management of the economy at the highest level. It is difficult to provide ready-made role models of procedure, or economic models for the dynamic, problem-free growth of innovativeness in Poland. However, in this work there shall be attempts to highlight the problematic issues of innovativeness for the reader in the following context: 1. The organisation and role of an individual in innovative processes; 2. The country and significance of institutionalisation in terms of stimulating innovativeness; 3. Globalisation and the associated openness of the innovative processes. The aforesaid observed dependencies constitute the effect of self-observations, but also the analysis of other national and foreign researchers who presented their publications at home and abroad in the field of innovativeness in their deliberations stemming from their hitherto research. In accordance with the indicated division of the proposed deliberations, they simultaneously constitute the subject matter of the following research questions: 1. Is innovativeness at a micro-scale level, namely in an organisation that may be primarily stipulated as employee–employer? 2. In the context of the deliberations conducted on the subject of territorial innovativeness, which is mainly at a national level, is it possible to acknowledge the mechanisms institutionalising the innovative processes as the main determinant? 3. Do the globalisation processes have a decisive impact on innovative openness? During the course of conducting deliberations on the research questions put forward, critical analysis of both national and international literary sources was availed of.

Innovativeness in industry 4.0  49

From entrepreneurs to innovative organisations As stated by Stanisławski (2017), in the current perception of innovation, there is a departure from radicalism in favour of evolution, while there is also greater significance attached to commercialisation and modification with regard to fundamentalism, which was to be the effect of innovation. This refers to the increase in the degree of usefulness, whose gauge may be treated as the level of added value that matches the level of value for a client, which is provided by new goods or services. This change constitutes a key point of reference with regard to defining and perceiving innovativeness with reference to the organisation (Figure 3.1). It is important to know to what extent it occurred as a result of a change or changes conducted by the organisation itself, as well as the difference between the starting point and finishing point. Entrepreneurship, which is inextricably associated with innovativeness and the creation of values, currently finds its place in every social, public and economic organisation. Entrepreneurship and innovativeness are states that are closely related. In order to create innovations, while also enhance products and their market use, the wisdom of activities is essential, while also knowledge, courage and the skill of transforming ideas into profitable undertakings (Makieła, 2018).6 It would seem that the aforementioned attributes relate to an individual in a natural way, thus entrepreneurship is easier to acknowledge as the attribute of human activity.

Further surroundings

Final stage

Intermediate stage

Initial stage

Closer surroundings

New value

Change in an organization

Figure 3.1  Relations between organizational change and innovation. Source: Stanisławski R. (2017), Open innovation a rozwój organizacyjny mikro, małych i średnich przedsiębiorstw (Open innovation and organizational development on microscale, small scale and medium-scale enterprises), Łódź: Politechnika Łódzka, p. 57.

50  Zbigniew Makieła and Tomasz Kusio Entrepreneurship is also tied to an entrepreneurial person (Schumpeter, 19607; Bratnicki, 20028). It is estimated that over 100 definitions relating to entrepreneurship9 are in use, among others, it is treated as a novel way of using a combination of resources with the aim of creating an organisation and/or practices that are aimed at satisfying the social needs.10 As noted by Sadowski and Andrzejczyk,11 the definition of entrepreneurship as a process of establishing and conducting an enterprise does not reflect the nature and full spectrum of the significance of the notion that is attributed to it in modern times. The entrepreneurial activities also involve the use of the possibilities noted in the environment by means of the execution of self-undertakings that may bring economic or non-economic effects. While recurring in various definitions, the common elements refer to innovativeness, as well as the creation of values, while in the aforesaid definitions there is also a reference to the creation of an organisation that is not focused on profit. In defining entrepreneurship, the notion of creativity also appears and the ability to create this depends on the strategic potential to a significant degree, which is among others, based on internal and external/ organisational abilities to build networks.12 Entrepreneurship is also acknowledged to be the final element in the process that commences with creativity13 (Figure 3.2), thus placing the notion on an equal footing with the notions of innovativeness and entrepreneurship, which hitherto existed relatively independently. Some term this definitive triad as genius loci by perceiving in it the key to the general growth and development of communities.14 Likewise, the role and significance of an individual are strengthened in terms of the notion. During the course of conducting deliberations in the field of the notion of entrepreneurship and innovativeness, it is necessary to emphasise that in the theories of economics and management, the outlined notions also refer to an individual in terms of the notion, as well as to the organisations, while are also used in a territorial context. It is possible to refer to an entrepreneurial scientist, while also to an entrepreneurial university. Finally, it is possible to conduct a ranking of the entrepreneurship of organisations and even provinces (województwa). Actually, the exact same logic of deliberations takes place in the case of the term innovativeness. Innovativeness also finds conceptual ties with entrepreneurship, which is the result of creative destruction (van Doorn et al., 2017).15 In this conceptual trend, it would be necessary to distinguish one more level of innovativeness that relates to people and the abilities of people to create and implement novel solutions. This notion of course to a large extent finds references to the entrepreneurship of individuals. The issues of the definitive distinctions of innovativeness and entrepreneurship constitute a separate subject for analysis, at least with regard to the individual, or person. Nevertheless, during the course of deliberation on the problematic issues of innovativeness with reference to the various levels that researchers enumerate, the reference to an individual would seem to be necessary due to the fact that it is actually human capital that is the driving force of the innovative processes, while in the context of the evaluation of the level of innovativeness, it is also very strongly embedded (European Innovation Scoreboard, 2019).

Innovativeness in industry 4.0  51 Latest scientific and technological developments Technological pressure

CREATIVITY

INNOVATION

ENTREPRENEURSHIP

– creating new and useful ideas

– improvement, evaluation and first materialization

– creating value in the market

– detecting opportunities

– chance assessment

– exploiting the opportunities

==================

=================

===================

Result: new ideas

Result: prototype, patent, business plan

Result: new products, services, processes

Social and market needs Market demand Figure 3.2   Model of process of development of entrepreneurship via creativity and innovation. Source: Kieszkowska-Grudny A. (2018), “Kreatywność i osobowość menedżerów a sukces i przedsiębiorczość organizacji” (“Creativity and personality of managers and success and entrepreneurship of organization”), in: Lipińska A., Klimas P. (eds.), Kierunki badań innowacyjności (Directions of research on innovativeness), Kraków: Wydawnictwo UJ, p. 128.

An interesting example, which in a natural and clear way indicates the significance of an individual in the innovative processes and their significance from the viewpoint of the possibilities of the company surviving on the market is that of family firms. In the case of family firms, both the issue of succession, as well as the issue of their innovativeness count in terms of their survival (Vrontis et al., 2018).16 In order for family firms to be able to survive, their owners, while also their successors should display innovative tendencies. In terms of the issue of the definitive distinctions with reference to entrepreneurship and innovativeness, the individual is the key element. The features of the individual, which urge him/her to undertake action aimed at enhancing the surrounding reality testify to his/her entrepreneurship, while in turn, the fact of implementing creative solutions itself constitutes innovativeness, while guided by the conceptual logic of differentiating innovation from innovativeness. From the deliberations conducted, it may be acknowledged that the first factor in the innovative process in terms of organisation is the individual himself/

52  Zbigniew Makieła and Tomasz Kusio herself. Innovativeness commences from the moment of recognising the problems that require rectification, while also recognising the demand among consumers for the new products or services. In the preliminary stage of the innovative process, a great role falls on the entrepreneurs and individuals. Great significance is attached to the knowledge at hand, as well as the skills and abilities to avail of it, namely, first and foremost entrepreneurship. New ideas require creativity that is placed on an equal footing with entrepreneurship and innovativeness. This signifies that an affirmative answer to the first research question is possible.

From pre-entrepreneurial policies to an innovative economy The substantial role of an individual in the innovative processes is very noticeable at the stage of creating novel solutions, however, attention is also drawn to the role of an individual in driving the innovative processes. Although the automation of the work processes would seem to have a debilitating effect on the importance of human labour, there is simultaneously the opposing growth in the significance of the knowledge and talent of the employee. Hence, there is a shift in the significance of the perception of the key workplace of an individual in the working environment towards creative processes, thus having an impact on the generation of innovations. The issues described relate to individuals in a natural way, while also to the processes of rationalising the use of the knowledge of individuals, or to greater or more significant accomplishments in terms of the effects of the work efforts of an individual. The theory of human capital to a large extent is starting to relate to the theory of stakeholders.17 The personal direction of the issues of innovativeness in terms of drawing attention to the network methods of the rationalisation of the processes of supply and demand with regard to knowledge and innovations engages the actors of science and business in the relational processes as two sides of the demand/supply chain, but also as an intermediary link, or having the impact of accelerating the aforesaid relational processes. Education, knowledge and the resources of human capital create the foundations of the economy, both at an individual level and at an aggregated level. The skills, technologies, education and industrial sector create a favourable cycle in terms of the increase in labour efficiency, which in turn drives economic growth.18 The place of an individual from the position of the creator is shifting in the organisation, namely towards the stage of implementing innovations, as a consequence of the analysis of the practical possibilities and the profitable application of the innovative solutions. Likewise, it is possible to acknowledge that the innovative process is subject to a greater level of institutionalisation than up to now. This primarily refers to the implementation of innovative solutions, while the significance of the deployment of innovative solutions is growing. The number of interesting solutions does not end in the form of the commercialised technologies, if only due to the high costs of implementation. There is also a lack of the appropriate connection between those expecting the solutions and the providers of these solutions.

Innovativeness in industry 4.0  53 The transfer of knowledge and technology may take place from the sphere of science to the industrial and manufacturing spheres, while may also take place between economic organisations.19 The recipients of knowledge and technology on the side of business declare that they do not know the offer of services provided by scientific centres, while also encounter difficulties in terms of acquiring detailed information on the subject of the research potential of the university. Due to this fact, the fundamental reason for the failure to undertake cooperation and avail of the research findings in the possession of the university is deemed by the entrepreneurs to be the information barrier. The remaining barriers to cooperation with universities were acknowledged as follows respectively: The high cost of the services rendered, bureaucracy, while also the failure to adjust the range of services to the profile of the business activities of the company. The issue of supporting innovativeness constitutes the theme that is valid from the viewpoint of both the economic needs of the country, as well as from the viewpoint of the organisations themselves, for which maintaining or strengthening the competitive position is paramount. The development of innovativeness at a national level is associated with the cooperation of business with the sphere of R&D. It is acknowledged that the level of this cooperation is more significantly influenced by the factors that motivate both sectors, rather than the barriers that weaken the blossoming of this cooperation. From the viewpoint of national politics, research at a national level indicates the need to support this cooperation at the moment when the level of the external technological effects of this cooperation is high.20 One of the ways of communicating between a university and the environment is that of promotion. The aim of promotion is acknowledged to be the shaping of the attitudes and behavioural traits of the potential clients, acquiring a competitive advantage, while also creating a positive image.21 In the sphere of promotional activities, there are both the activities of public relations (among others, maintaining good contact with the local media), creating the visual identity of the organisation, but also the skills in terms of creating the environment of support for development initiatives, or also maintaining the appropriate ties with self-governing local authorities, while also prominent enterprises and institutions. The role of intermediaries may also differ depending on the stage in which the particular economic entity finds itself in terms of maturity.22 At the stage of a start-up, the intermediaries may participate in the transfer of knowledge that involves commercialisation, i.e. in the direction from the university to the external environment. At the stage of the growth of the enterprise, the intermediaries may participate in and have an impact on the expansion of the scale of production, while also adjust the product offer to the market expectations. In turn, at the stage of maturity, the intermediaries may help in the sphere of increasing the level of effectiveness in terms of the allocation of resources, the reduction of transactional and coordination costs, while also facilitating the search for external partners in the creation of the network of partnership ties. The intermediaries, among other things, search for new ideas, talents, technologies, while also possessing the

54  Zbigniew Makieła and Tomasz Kusio possibilities and skills in the sphere of their use in practice. They may be divided into two groups as follows: 1. Agents (representing the innovator or inventor); 2. Brokers (whose task is to connect two parties with each other, while also providing assistance in terms of conducting transactions). The role of entrepreneurs in the sphere of the transfer of knowledge and technology is proposed to be placed on three levels, namely micro-scale, meso-scale and macro-scale.23 On the micro-scale level, the intermediaries have an impact on the execution of R&D activities by the entrepreneurs themselves, whereas, on the meso-scale level, the intermediaries have an impact on the technological development of the region, while on a national scale this refers to the level of impact on a macro-scale. In the case of the micro-scale, which is particularly important from the viewpoint of the ties between the enterprise and the environment, the role of the intermediaries differs with reference to SMEs, as well as large enterprises. Large enterprises, whose functioning within the dimension of the creation of innovative solutions very often comes down to their own R&D activities, avail of aid and advice on a micro-scale, meso-scale and macro-scale. They may have their own intermediaries, whose role involves, among other things, providing access to their own solutions. The intermediaries of cooperation between the parties of supply and demand as regards the demand for novel technologies and products constitute a significant sector in the context of strengthening the level of innovativeness of the economy. The institutionalisation of the sector of mediation in terms of knowledge transfer takes place at the level of individual organisations where positions or units are created or assigned to be responsible for this, as well as at a territorial level, e.g. a region or country. In the context of a large organisation, building ties with stakeholders also takes on significance. In the theory of stakeholders, building transparent long-term and lasting ties with all the interested parties in terms of the functioning of the organisation constitutes the fundamental assumptions for the strategies of the corporation and the creation of value. Apart from the stakeholders, the unquestioned partners are the enterprises themselves, namely the owners and employees, clients, suppliers and cooperative partners such as, among others, the local communities, public administration, while also the competitors are worthy of mention.24 Apart from the obvious competitive approach of this group of stakeholders with regard to the business activities of the organisation, the reference of the definition of competitors to the phenomenon of cooperation is also important. Building ties with stakeholders may constitute the effect of the institutionalisation of the strategies of strengthening the social capital of the organisation. Thanks to similar activities, the organisation may acquire the essential resources for the creation and implementation of innovative solutions. Another interesting variant in terms of the institutionalisation of the implementation of the innovative solutions that currently constitutes a significant issue

Innovativeness in industry 4.0  55 in the policies of innovativeness at a national level, namely spin-off firms. The creators in this enterprise who are incapable of commercialising their ideas in a direct manner may decide to establish a new enterprise. A similar mode of institutionalisation in terms of the implementation of innovative solutions may be the result of having the appropriate resources. The findings of scientific research at a national level that is conducted in academic enterprises indicate strong dependency between the innovative activities of these firms and the possibilities of financing these undertakings. A total of 70% of the enterprises surveyed indicated that the cooperation with financial institutions had an impact on the implementation of innovations by the aforesaid enterprises.25 A further interesting discovery that arose from the research conducted is also the existence of the dependency between the aggressiveness of competition and the age of an enterprise. Together with the age of an enterprise, there is an increase in the significance of the quality of the products on offer, or even flexibility in terms of adjusting to the needs of clients and innovativeness. Likewise, academic enterprises illustrate to a high degree the awareness of the need for innovativeness. Among the dependencies observed that relate to academic enterprises, the processes of innovativeness occurring in these enterprises are to the greatest extent determined by the degree of competitiveness of the sector, the economic situation of the country, the tax system, while also the access to economic infrastructure. Institutional support is important in order to acquire a greater degree of commercialisation of innovative solutions in economies. This support should first and foremost relate to the national and regional levels in this sphere with regard to the greater number of organisations whereby activities supported from outside the business environment are important. Their nature is, among others, mediation, subsidising, advisory or consulting services. Hence, it would seem that in the context of the deliberations on the subject of territorial innovativeness, among other things, national institutionalisation is of great significance. In order to gain the desired degree of development modern solutions are required, which in turn generates the need for institutional support for economic organisations. This signifies the fact that the answer to the second research question posed is also affirmative. During the course of the deliberations conducted, further significant information emerged, which relates to the ties between the institutionalisation of pro-innovative activities and the stage of the implementation of innovations. In as much as the role of an individual and his/her creativity is important in the stage of creating novel ideas, the stage of implementation requires a broader sense of cooperation, which in turn forces the institutionalisation and entering the thicket of rules and regulations. Furthermore, the issue of institutional support is of significance in terms of strengthening the processes of implementation.

From globalisation to open innovations In the innovative process, the creation of novel solutions and their implementation should be of an intensified nature at present. The dynamics of the innovative processes in the organisation should be high if it wants to sustain its competitive

56  Zbigniew Makieła and Tomasz Kusio position. In relation to this fact, in order for the innovative processes to be maintained in an enterprise, it is insufficient to restrict them to their own resources. This not only relates to small and medium-sized enterprises, which frequently have a shortage of such resources, but also large enterprises. Cooperation is essential, as a result of which access to a wide range of external resources becomes possible. In terms of business, cooperation with scientific institutions is particularly important. In the context of the need for cooperation in the environments of science and business, great importance is attached to the paradigm of open innovations as the effect of utilising their own knowledge and external knowledge. In research on innovativeness, particularly in terms of research on open innovations, it has been claimed that in organisations where there is the element of openness to a wider degree, there is also a greater level of innovativeness,26 while first and foremost the tendency to undertake innovative activities. At the peak of the global vision of entrepreneurial networking lies the need to reach out for the most trustworthy information in the most appropriate form to be given to the most adequate recipients (innovation appropriation). This signifies that in a global notion, the creation of the best knowledge may be executed by the most adequate thinkers for the best representatives of the institutions that will implement the solutions in the best way without geographical, technological, or financial barriers, etc. The minimisation of barriers is to deliberately accompany the maximisation of benefits. The denominator for barriers shall be that of financing, which however is possible to overcome in a networking context, as exemplified by crowdfunding – network financing, or social network financing. Cooperation may be treated as a type of alliance that relates to various areas of the functioning of the organisations that participate in this cooperation. The awareness of the entities undertaking cooperation that have limited resources is significant, while also the conviction that the specified undertaking and intentions may be executed more rapidly, efficiently and at a lower cost by operating together. Organisations that form part of cooperation ties pursue the execution of the hitherto challenges, yet by engaging lower quantities of resources and means than before. The success of the cooperative undertakings is determined by the factors of a behavioural nature, as well as a process, financial and technological nature.27 Open innovations may have the source of knowledge both in terms of paying for the knowledge received and whereby it is not necessary to purchase the knowledge acquired (Figure 3.3). The ties occurring between the parties to the exchange of information, including the case of the possession of the degree of formalisation that is determined by the actual nature of acquiring knowledge for the implementation of innovative solutions. The acquisition of innovative solutions by way of purchase also involves the necessity of signing an agreement in order to lead to a sales transaction. The lower level of formalisation is characterised by the forms of acquiring knowledge, in which no commercial way occurs. Open innovations may be acknowledged as “the two-directional or onedirectional exchange (outflow and inflow) of knowledge, experience and ideas

Innovativeness in industry 4.0  57

Figure 3.3  Forms of open innovations according to Dahlander and Gann. Source: Stanisławski R. (2017), p. 67.

executed between an enterprise and entities within its environment (by means of the ties of cooperation or competition).” This cooperation constitutes the combination of two areas of innovative activities, the use and exploration of resources.28 In the current situation of economic openness to the processes of innovative openness, the decisive impact is evoked by globalisation. It makes national economic systems more interdependent than up to now, which implicates new qualitative ties at the level of states, but also particular organisations. The ties arise from the increasing freedom and speed of entering and executing transactions.29 The global dimension currently constitutes the determinant of the systems of cooperation, while in turn network cooperation is treated as the determinant of the modern economy.30 Globalisation is associated with various opinions in the sphere of the benefits it brings from the perspective of different countries depending on their level of development. Regardless of the opinions in the sphere of benefits, or dangers that accompany the spread of globalisation, there is no doubt that with the growth of globalisation, the level of mutual interpersonal dependencies is increasing,31 while also the necessity to develop inter-organisational dependencies. Another phenomenon observed that is associated with globalisation is the fact that the problematic issues of the need for innovativeness as such are starting to give way to the need for innovation intensity. The highest increase in the role of dynamics in the innovation processes and somewhat as the need for their identification and repetitiveness would seem to be identical to the dynamics of globalisation and internationalisation. Simultaneously, the observation of the

58  Zbigniew Makieła and Tomasz Kusio advancing technologisation determines the need for not only innovativeness but also the intensification and dynamics of innovativeness. These processes relate to both global firms, including international corporations, as well as large national firms, while also small and medium-sized firms. However, SMEs in the current economic reality and globalisation are also subject to the need for internationalisation. This is expressed both in terms of these firms having their subsidiaries or SMEs established abroad, as well as the cooperators, e.g. in the form of physical entities who, albeit work and live in another country remain in professional ties with the parent company, thus constituting the front of the expansion of business activities of an international nature. The dynamics of these processes cause a greater demand for knowledge for the purpose of generating and implementing novel solutions. Simultaneously, in a natural, or it could be said, market way, the need to increase the rationality of the use of resources takes place. As a result, an intrinsic regulation takes place in a natural way in terms of the processes of the supply and demand for information and knowledge of a specialised nature. These processes imply the generation of the aforesaid open innovations, which constitute the effect of the processes of regulating the intensified demand for knowledge, while simultaneously its provision by means of network cooperation. Likewise, open innovations are acknowledged to be the current innovative reality.

Summary and recommendations The subject matter of deliberations in this chapter constituted the analysis of the innovative processes in the following three dimensions: The role of an individual in innovativeness at the level of the organisation, the innovative mechanisms in the context of the national innovativeness, while also the ties between globalisation and innovative openness. Subsequent to the distinction of the aforesaid three leading areas of the development of innovativeness, three main research questions were put forward that are adequate for the distinguished areas of theoretical deliberations. The first of these research questions referred to the possibilities of ascribing innovativeness to the micro-level, namely the organisation towards the individual. During the process of conducting literary analysis, it is possible in a clearly obvious manner to answer this question in the affirmative. In the preliminary stage, innovativeness refers to first and foremost the creation of solutions and ideas that are to respond to the current problems and challenges in a better and more effective way. This relates to new products, services, processes, or even the organisations themselves. This, in turn, refers to more effective ways of manufacturing, organisation, sales, while also the provision of services. The role of an individual, as a creator, is the key at this stage, while taking account of the identification of the needs of clients, but also creativity in terms of the creation of new ideas. Simultaneously, entrepreneurship which appears in the form of creative unease is the driving force of pro-innovative activities. At the same time, entrepreneurship first and foremost constitutes the attribute of human activity, which additionally

Innovativeness in industry 4.0  59 confirms that at the preliminary stage of the innovative processes at the microlevel, namely, within the organisation, the role of the individual is key. In the subsequent stage of deliberations, the aspects of implementing innovative solutions were taken into consideration. The role of the individual seems to continue to be significant in this context. His/her place moves from the position of a creator to the analysis of the profitability of the undertaking and subsequently to the stage of implementing the innovations. The implementation of novel solutions that precede the novel solutions, analysis of the profitability, relates to these solutions which are the most beneficial for the particular organisation, albeit the most beneficial solutions are not necessarily derived from the parent company. Furthermore, in a multitude of cases, the increase in innovativeness is impossible based on their own solutions, as the organisations do not possess the appropriate resources for the creation of innovative solutions. The role of the individual creator, albeit still important, is starting to give way to the work of a multitude of people, while an increasing level of importance is being ascribed to the institutionalisation of activities. The cooperation is the result of the necessity of gaining access to new and creative resources that are unavailable to the individual. This particularly refers to SMEs. Due to this fact, the significance of scientific units that have multiple creative resources is growing, which are also the providers of innovative solutions. Additionally, great significance is also attached to the sector of knowledge transfer and technology transfer which dynamises the processes of knowledge exchange. In certain cases of interesting innovative solutions which are derived from scientific units, are actually commercialised by academics. This relates to academic enterprises and spin-off enterprises. In this context, the significance of financing novel solutions in turn also increases. The notion of the implementation of innovative solutions contributes to a discussion relating to innovativeness at an institutional level as follows: The sector of knowledge, the financial support of innovativeness and the cooperation of enterprises with scientific units. Likewise, the growing role of institutionalisation and the territorial dimension of innovativeness is becoming rather clearly outlined as the implementation process forces cooperation between the various partners. This signifies that it is possible to answer the second research question in the affirmative. The issue of the need for inter-organisational cooperation in the context of the growing level of competitiveness leads to the search for adequate innovative solutions in an increasingly wider territorial perspective. In any case, the geographical dimension in these times of digitisation and networking of economies constitutes a lower barrier than up to now. The principles of the thriftiness of managing resources and the need for greater economic efficiency lead to the fact that the search for interesting solutions is attracting more attention. The blurring of the geographical boundaries in the innovative processes confirms the growing significance of globalisation. The more the globalisation processes intensify, the greater the tendency to go outside the nearest environs in order to search for innovative solutions. By the same token, the dependency between the increased open innovativeness and globalisation signifies that the third research question put forward is answered in the affirmative.

60  Zbigniew Makieła and Tomasz Kusio The deliberations conducted were exclusively based on both national and international literary analysis, which constitutes a mere fragmentary picture of the research. Supplementation of the deliberations with empirical research would additionally facilitate the acquisition of not only a confirmation, or rejection of the assumptions adopted that were encompassed in the research questions. However, as a result of the analysis, it is possible to formulate the following recommendations: 1. In the processes aimed at dynamising the formation of novel solutions, the priority of drawing attention to the support of creativity and entrepreneurship of an individual is necessary, regardless of whether he/she is an employee of a particular organisation or not. 2. In the processes of supporting the implementation of innovations, the reduction of the barriers to cooperation in the environments of the providers and recipients of innovative solutions is important. However, this not only relates to business and universities but a broad perception of the environment of creators and the recipients, who are particularly experiencing the shortage of resources in the process of creating innovative solutions. 3. In order to control the processes of the dynamisation of the competitiveness of the business units responsibly, it is essential to minimise the barriers to gaining access to the global resources of knowledge, while also taking account of the necessity to share their own resources of knowledge.

Notes 1 D’Aveni R. (2017), “Choosing Scope Over Focus,” MIT Sloan Management Review, 58 (4), pp. 22–26. 2 McKinsey (2015), Industry 4.0: How to navigate digitization of the manufacturing system, McKinsey & Company. 3 Kusio T. (2019), Więzi relacyjne uczelni z biznesem, Kraków: Wydawnictwa AGH. 4 Romanowska M. (2015), “Innowacyjne przedsiębiorstwo w nieinnowacyjnej gospodarce,” Przegląd Organizacji, 8, pp. 4–8. 5 Dziurski P. (2019), “Innowacyjność jako determinanta relacji koopetycyjnych,” Przegląd Organizacji, 5, pp. 3–8. 6 Makieła Z.J., Stuss M.M. (red.) (2018), Przedsiębiorczość i zarządzanie innowacjami: Wiedza, technologia, konkurencja, przedsiębiorstwo, Przedsiębiorczość i innowacyjność – wprowadzenie, Makieła Z.J., pp. 15–42. 7 Schumpeter J. (1960), Teoria rozwoju gospodarczego, Warszawa: PWN. 8 Bratnicki M. (2002), Przedsiębiorczość i przedsiębiorcy współczesnych organizacji, Katowice: Akademia Ekonomiczna im. K. Adamieckiego w Katowicach. 9 OECD/EU (2017), Supporting Entrepreneurship and Innovation in Higher Education in Poland, Paris/EU Brussels: OECD Publishing, p. 20. 10 Mandyoli B., Iwu C.G., Nxogo Z. (2017), “Is there a nexus between social Entrepreneurship and the employability of graduates,” Foundations of Management, 9, p. 61, in: Mair J., Nobor E. (2016), Social Entrepreneurship: How intentions to create a social venture are formed in social entrepreneurship, UK: Palgrave Macmillan, pp. 61–74. 11 Sadowski A., Andrzejczyk A. (2018), “Współpraca instytucji otoczenia biznesu i uczelni wyższych w obszarze edukacji przedsiębiorczej,” Przegląd Organizacji, 4 (20), pp. 20–26.

Innovativeness in industry 4.0  61 12 Dyduch W., Bratnicki M. (2018), “Strategizing Corporate Entrepreneurship for Value Creation and Value Capture,” International Journal of Contemporary Management, 17 (1), pp. 14, 7–26. 13 Kieszkowska-Grudny A. (2018), “Kreatywność i osobowość menedżerów a sukces i przedsiębiorczość organizacji,” in: Lipińska A., Klimas P. (eds.), Kierunki badań innowacyjności, Kraków: Wydawnictwo UJ, p. 128. 14 Malara Z., Malara M. (2018), “Rzemiosło, czy sztuka – rzecz o źródłach innowacji i innowacyjności,” in: Malara Z., Skonieczny J. (eds.), Innowacje w gospodarce, przedsiębiorstwie i społeczeństwie, Wrocław: Oficyna Wydawnicza Politechniki Wrocławskiej, pp. 26, 25–33. 15 Van Doorn S., Heyden M.L., Volberde H.W. (2017), “Enhancing entrepreneurial orientation in dynamic environments: The interplay between top management team adviceseeking and absorptive capacity,” Long Range Planning, 50 (2), pp. 134–144. 16 Vrontis D., Weber Y., Thrassou A., Riad Shams S.M., Tsoukatos E., Karagouni G. (2018), “The role of Dynamic Entrepreneurial Capabilities and Innovation in Intergenerational Succession of Family Firms” in: Innovation and Capacity Building: Cross-disciplinary Management Theories for Practical Application. 17 Kusio T. (2019) Więzi relacyjne uczelni z biznesem, Kraków: Wydawnictwo AGH. 18 Żyra J. (2013), Efekty ekonomiczne niedopasowań strukturalnych i kompetencyjnych w obszarze edukacji, Kraków: Politechnika Krakowska, p. 214. 19 Poznańska K. (2016), “Transfer wiedzy i technologii z podmiotów naukowych do gospodarki,” in: Wawak T. (ed.) Zarządzanie w szkołach wyższych i innowacje w gospodarce, Kraków: Wydawnictwo UJ, pp. 141–147. 20 Prokop J. Wiśnicki B. (2015), “R&D Activities in Oligopoly and Social Welfare,” International Journal of Management and Economics, 46, pp. 134–146. 21 Malara Z., Ryńca R. (2016), “Problemy kształtowania konkurencyjności współczesnej szkoły wyższej. Uwarunkowania, instrumenty, działania,” in: Borowiecki R., Dudek M., Nowicka-Skowron M. (eds.) Zarządzanie rozwojem organizacji. Wybrane problemy, Kraków: Wydawnictwo AGH, p. 147. 22 Stanisławski R. (2017) Open innovation a rozwój innowacyjny mikro, małych i średnich przedsiębiorstw, Łódź: Wydawnictwo Politechniki Łódzkiej, pp. 96–97. 23 Stanisławski R (2017) Open innovation a rozwój innowacyjny mikro, małych i średnich przedsiębiorstw, Łódź: Wydawnictwo Politechniki Łódzkiej, p. 92. 24 Wechta P. (2017), “Zastosowanie kapitału relacyjnego w praktyce CSR na przykładzie spółki KGHM Polska Miedź S.A.” in: Mazur-Wierzbicka E. (ed.), Współczesne wyzwania w obszarze zarządzania zasobami ludzkimi, Seria Gospodarka i Organizacja, 1, Szczecin: Uniwersytet Szczeciński, pp. 122–130. 25 Korpyna J. (2019), “Entrepreneurial Orientation of Acadmic Spin-Offs: Statistical Correlations,” Problemy Zarządzania – Management Issues, 17 (1/81), pp. 93–106. 26 Laursen K., Salter A.J. (2004), “Searching high and low: What type of firms are universities as a source of innovation?,” Research Policy, 33 (8), pp. 1201–1215. 27 Nowak D. (2017), “Determinanty sukcesu przedsięwzięć kooperacyjnych,” Studia i Materiały WNEiZ US, 48 (3), pp. 317–331, pp. 321–322. 28 Stanisławski R. (2017), Open innovation a rozwój innowacyjny mikro, małych i średnich przedsiębiorstw, Łódź: Wydawnictwo Politechniki Łódzkiej, p. 66. 29 Borowiecki R., (2017) “Rola lidera zmiany we współczesnym przedsiębiorstwie,” in: Liderzy o liderowaniu, (ed.) Bojar, pp. 20–21, pp. 20–24. 30 Klimas P. (2014), “Kryteria doboru partnerów współdziałania sieciowego,” in: Stabryła A., Malkus T. (eds.), Strategie zarządzania organizacjami informacyjnymi, Kraków: Encyklopedia Zarządzania Mfiles​.p​l, p. 298. 31 Ferreira C. (2018), The relationship between globalization and economic growth: A Co-integration approach, Proceedings of IV International Conference: Proceedings of IV International Conference: Globalisation and Regionalisation in Contemporary World: Competition, Development, Stability, organised by Krakow University of Economics.

62  Zbigniew Makieła and Tomasz Kusio

References Borowiecki R. (2017), ‘Rola lidera zmiany we współczesnym przedsiębiorstwie’, in: Bojar E. (ed.), Liderzy o liderowaniu w XXI wieku: refleksje przedstawicieli nauk o zarządzaniu i praktyków, Lublin and Toruń: Towarzystwo Naukowe Organizacji i Kierownictwa ‘Dom Organizatora’, pp. 20–24. Bratnicki M. (2002), Przedsiębiorczość i przedsiębiorcy współczesnych organizacji, Katowice: Akademia Ekonomiczna im. K. Adamieckiego w Katowicach. D’Aveni R. (2017), ‘Choosing Scope Over Focus’, MIT Sloan Management Review, 58 (4), pp. 22–26. Dyduch W., Bratnicki M. (2018), ‘Strategizing Corporate Entrepreneurship for Value Creation and Value Capture’, International Journal of Contemporary Management, 17 (1), pp. 7–26. Dziurski P. (2019), ‘Innowacyjność jako determinanta relacji koopetycyjnych’, Przegląd Organizacji, 5, pp. 3–8. European Innovation Scoreboard (2019), https​:/​/ww​​w​.eus​​tat​.e​​us​/el​​ement​​os​/el​​e0016​​800​/e​​ urope​​an​-in​​novat​​ion​-s​​coreb​​oar​d/​​inf00​​16823​​_c​.pd​f (accesed: 12.04.2019) Ferreira C. (2018), ‘The relationship between globalization and economic growth: A Co-integration approach’, in Proceedings of IV International Conference: Globalisation and Regionalisation in Contemporary World: Competition, Development, Stability, organized by Krakow University of Economics, Krakow. Karagouni G. (2018), ‘The role of Dynamic Entrepreneurial Capabilities and Innovation in Intergenerational Succession of Family Firms’ in: Vrontis D., Weber Y., Thrassou A., Riad Shams S.M., Tsoukatos E., Karagouni G. (eds), Innovation and Capacity Building: Cross-disciplinary Management Theories for Practical Application, New York: Springer. DOI: 10.1007/978-3-319-90945-5_3 Kieszkowska-Grudny A. (2018), ‘Kreatywność i osobowość menedżerów a sukces i przedsiębiorczość organizacji’, in: Lipińska A., Klimas P. (eds.), Kierunki badań innowacyjności, Kraków: Wydawnictwo UJ. Klimas P. (2014), ‘Kryteria doboru partnerów współdziałania sieciowego’, in: Stabryła A., Malkus T. (eds.), Strategie zarządzania organizacjami informacyjnymi, Kraków: Encyklopedia Zarządzania Mfiles​.pl​. Korpyna J. (2019), ‘Entrepreneurial Orientation of Acadmic Spin-Offs: Statistical Correlations’, Problemy Zarządzania: Management Issues, 17 (1/81), pp. 93–106. Kusio T. (2019), Więzi relacyjne uczelni z biznesem, Kraków: Wydawnictwa AGH. Laursen K., Salter A.J. (2004), ‘Searching High and Low: What Type of Firms Are Universities as a Source of Innovation?’, Research Policy, 33 (8), pp. 1201–1215. Makieła Z.J (2018), ‘Przedsiębiorczość i innowacyjność: wprowadzenie’, in: Makieła Z.J., Stuss M.M. (eds.), Przedsiębiorczość i zarządzanie innowacjami: Wiedza, technologia, konkurencja, przedsiębiorstwo, Warszawa: C.H. Beck, pp. 15–42. Malara Z., Malara M. (2018), ‘Rzemiosło, czy sztuka: rzecz o źródłach innowacji i innowacyjności’, in: Malara Z., Skonieczny J. (eds.), Innowacje w gospodarce, przedsiębiorstwie i społeczeństwie, Wrocław: Oficyna Wydawnicza Politechniki Wrocławskiej, pp. 25–33. Malara Z., Ryńca R. (2016), ‘Problemy kształtowania konkurencyjności współczesnej szkoły wyższej. Uwarunkowania, instrumenty, działania’, in: Borowiecki R., Dudek M., Nowicka-Skowron M. (eds.), Zarządzanie rozwojem organizacji. Wybrane problemy, Kraków: Wydawnictwo AGH.

Innovativeness in industry 4.0  63 Mandyoli B., Iwu C.G., Nxogo Z. (2017), ‘Is There a Nexus between Social Entrepreneurship and the Employability of Graduates?’, Foundations of Management, 9 (1), p. 61, DOI: 10.1515/fman-2017-0005 McKinsey (2015), Industry 4.0: How to Navigate Digitization of the Manufacturing System, McKinsey & Company. https​:/​/ww​​w​.mck​​insey​​.com/​~/​med​​ia​/mc​​kinse​​y​/bus​​ iness​​%20fu​​nctio​​ns​/mc​​kinse​​y​%20d​​igita​​l​/our​​%20in​​sight​​s​/get​​ting%​​20the​​%20mo​​st​%20​​ out​%2​​0of​%2​​0indu​​stry%​​204​%​2​​00​/mc​​kinse​​y​_ind​​ustry​​_40​_2​​016​.p​​df Kraśnicka T., Ingram T. (ed.) (2014), ‘Innowacyjność przedsiębiorstw – koncepcje, uwarunkowania i pomiar’, Wydawnictwo Uniwersytetu Ekonomicznego w Katowicach Nowak D. (2017), ‘Determinanty sukcesu przedsięwzięć kooperacyjnych’, Studia i Materiały WNEiZ US, 48/3, pp. 317–331. OECD/EU (2017), Supporting Entrepreneurship and Innovation in Higher Education in Poland, Paris/EU Brussels: OECD Publishing. Poznańska K. (2016), ‘Transfer wiedzy i technologii z podmiotów naukowych do gospodarki’, in: Wawak T. (ed.), Zarządzanie w szkołach wyższych i innowacje w gospodarce, Kraków: Wydawnictwo UJ, pp. 141–147. Prokop J., Wiśnicki B. (2015), ‘R&D Activities in Oligopoly and Social Welfare’, International Journal of Management and Economics, 46, pp. 134–146. DOI: 10.1515/ ijme-2015-0025 Romanowska M. (2015), ‘Innowacyjne przedsiębiorstwo w nieinnowacyjnej gospodarce’, Przegląd Organizacji, 8, pp. 4–8. Sadowski A., Andrzejczyk A. (2018), ‘Współpraca instytucji otoczenia biznesu i uczelni wyższych w obszarze edukacji przedsiębiorczej’, Przegląd Organizacji, 4, pp. 20–26. Schumpeter J. (1960), Teoria rozwoju gospodarczego, Warszawa: PWN. Stanisławski R. (2017), Open innovation a rozwój innowacyjny mikro, małych i średnich przedsiębiorstw, Łódź: Wydawnictwo Politechniki Łódzkiej. Van Doorn S., Heyden M.L., Volberde H.W. (2017), ‘Enhancing Entrepreneurial Orientation in Dynamic Environments: The Interplay Between Top Management Team Advice-Seeking and Absorptive Capacity’, Long Range Planning, 50(2), pp. 134–144. DOI: 10.1016/j.lrp.2016.06.003 Wechta P. (2017), ‘Zastosowanie kapitału relacyjnego w praktyce CSR na przykładzie spółki KGHM Polska Miedź S.A.’ in: Mazur-Wierzbicka E. (ed.), Współczesne wyzwania w obszarze zarządzania zasobami ludzkimi, Seria Gospodarka i Organizacja, 1, Szczecin: Uniwersytet Szczeciński, pp. 122–130. Żyra J. (2013), Efekty ekonomiczne niedopasowań strukturalnych i kompetencyjnych w obszarze edukacji, Kraków: Politechnika Krakowska.

4

Economic and institutional aspects of Industry 4.0 in Poland Rafał Wisła and Michał Włodarczyk

Introduction Achievements in production process technology have led to significant changes in the organisation and structure of production, work performance and the efficiency of other production factors. Sometimes, these are distinctive to such a level that they render the periodisation of development processes possible. Rostow (1960, 1971) assumed that countries experience certain stages of economic growth, which he defined as traditional society, transition phase, take-off, drive to maturity, mass consumption and searching for quality. The third stage – take-off – is characterised by a marked increase in industrialisation, reallocation of labour resources and the concentration and development of institutions supporting industrialisation. Experiencing the successive stages of economic growth, each time boosted by a different set of production factors, always entails investments. Rostow’s theory was modified by Friedman (1966), who distinguished four successive development stages: a pre-industrial stage (corresponding to Rostow’s first and second stages of growth), transitional stage (corresponding to Rostow’s take-off), industrial society (mature stage of development), and a post-industrial stage (mass consumption). In practice, the transition between successive stages can be quite erratic in terms of time and tend to be structurally diversified. In complex and dynamic structures such as the national economy or an integrated, grouped economy, it is often observed that the specific development stages occur simultaneously. Thus, the notion of “revolution” is not relevant with regard to the category of growth or economic development and is also not relevant with regard to industry. The course of development processes has little in common with the occurrence of completely new situations that have no equivalents in the past. None of the successive development stages negatively impact previous ways of production; instead, the former makes use of the latter. Within the area of industry, the periodisation of its development can be marked by the following events (Olszewski, 2016):

DOI:  10.4324/9781003184065-4

Economic and institutional aspects   65 ·· ·· ·· ··

The mechanisation of human labour (the atmospheric engine, hydraulic press, electric power grids); Industry 1.0 (from roughly the turn of the 17th and 18th centuries). Automation (the automation of production processes, both discrete [switchbased] and analogue); Industry 2.0 (from roughly the start of the 20th century). Robotisation (the mobile teleoperator, numerically controlled machine tools with programmes recorded on magnetic tapes, industrial robots); Industry 3.0 (from roughly the 1940s).1 Industry 4.0 (digitalisation and advanced integration of horizontal and vertical value chains, smart automated plants, customer-centric plants) factories use advanced networks to intelligently respond to changing tasks and operate in a state of permanent reconfiguration. A large range of devices are becoming ever more flexible and intelligent; they are also becoming better at communicating with other devices or data sources via the Internet.

The primary differences between the third and fourth revolution are as follows. The fourth revolution I characterised by universal global access to the Internet, drastically reduced data storage costs, mobile devices, intelligent sensors, renewable energy resources as well as artificial intelligence (Gracel, 2016). The essence of intelligent production, the Internet of Things and Industry 4.0 is the mutual communication abilities of cyber-physical systems. During production processes, these systems can respond autonomously to clients’ requirements, the availability of resources, energy prices and many others. These systems also manage logistics costs. The concept of Industry 4.0 is based on a totally networked and flexible production process. In an Industry 4.0. factory, the main element of a digital supply chain is the robot. The issue of Industry 4.0 is not the subject that is widely undertaken worldwide. The intellectual foundations of the purposefulness of using this term in scientific research are the work of the following researchers: Batista et al. (2017); Brynjolfsson and McAfee (2014); Bukata et al. (2017); Gabriel and Pessl (2016); Kuan Chung et al. (2017); Magruck (2016); Pfeiffer (2017); and Wanyama (2017). The aim of this article is to discuss selected economic and institutional aspects of the shift in the Polish economy to the next successive stage of industrialisation and economic growth. Robotisation based on digitalisation and advanced automation in the Polish industry is at a relatively low level compared to other EU countries and, as such, it is not possible to optimistically presuppose a rapid leap to the stage defined by the assumptions of Industry 4.0, which is initiated in countries with intense robotisation and digitalisation of industrial production. This chapter comprises an introduction, materials and methods, result, discussion and conclusions. The section on materials and methods describes the methodology and primary data used to achieve the goal of the study. The result presents the industrial sector in Poland by employing the following units: Marketed production, employment, investments, work performance as well as investment in research and development. This section also presents the dynamics and changes with regard to equipping Polish industrial enterprises with automation resources

66  Rafał Wisła and Michał Włodarczyk for production processes throughout the period of 2010 to 2014. The discussion emphasises the assumption that robotisation based on digitalisation and advanced automation in industry is a necessary prerequisite for successfully transferring to the stage defined by the assumptions of Industry 4.0. In the context of this assumption, the basic obstacles to the development of Industry 4.0 in Poland are noted.

Materials and methods This article does not search for a universal model for the fourth industrial revolution. By following the rules of scientific cognition and designed test procedure, maintaining the proper rigour and the already set discussion frameworks, one looks for the essence of Industry 4.0. The findings of the resulting argument are considered to be the theory having the nature of the proper hypotheses which, according to Popper’s approach, should be subjected to further rigorous testing procedures, targeted to their falsification. The authors hope to provoke a discussion and, as a consequence, encourage other researchers to carry out tests confirming the validity of the formulated hypotheses or their rejection. The philosophy of socio-economic development, confronted with the image of the contemporary reality, allows distinguishing one main logical axiom of modern development, at least. The creation of knowledge and its effective use in the manufacturing process determine the ability and competitive position of economies at all levels and areas of impact on the environment (Tang, 2005; Leydesdorff, 2006). We can say this of the companies based on the creation and absorption of knowledge in their ongoing manufacturing processes (Brilman, 2002). What’s more, the concept of the global economy based on knowledge as a distinctive feature of the modern internationalisation process is a quite commonly used term (Thurow, 2000). The collection of data used in the analysis was extracted from the Central Statistical Office (Poland) and the International Federation of Robotics in June 2017. The years 2005–2015 are accepted as the research period. But it is often narrowed down to 2010–2015. (The concept of Industry 4.0 appeared in practice in 2010–2011.) Two research methods were used to achieve the purpose of the chapter: A descriptive analysis of the structure, direction and dynamics of the fourth industrial revolution and a case study. As Hargadon and Douglas (2001) pointed out, “historical case studies provide a perspective that covers the decades often necessary to observe an innovation’s emergence and stabilization.” To achieve the main goal of this chapter, a longitudinal case study approach was used.

Result Industrial sector in Poland The number of entities conducting business activities in the Polish industry in the period 2005 to 2015 increased from 195,268 in 2005 to 207,579 in 2015.

Economic and institutional aspects   67 This relatively small increase (roughly 0.6% per year) was accompanied by a nearly 83% increase in sales value (including this period). If this is combined with a 0.3% average annual increase in employment, the demand for relatively high sales dynamics is driven not only by demand (new market outlets) but also by productivity – the effect of the increase in quality of fixed assets involved in manufacturing (Table 4.1). Among roughly 207,600 industrial entities, 99% are private entities, representing the dominant (98.2%) domestic capital. However, less than 2% of entities with predominantly foreign capital had a 42% share in the production sold in 2015. When we compare this figure with the value of gross monthly industry wages, the following general regularity can be observed. The higher quality of fixed assets involved in the manufacturing process in entities with foreign capital accompanies significantly higher total-factor productivity, and much higher wage growth dynamics. The Polish industry is dominated by micro-enterprises. The number of enterprises in which the number of employees exceeds nine persons was 32,206 in 2015. Of this: ·· ·· ·· ·· ·· ··

23,971 were entities where the number of employees ranged from ten to 49; 3,817 were entities where the number of employees ranged from 50 to 99; 3,126 (100 to 249); 993 (250 to 499); 438 (500 to 999); 263 (1,000 or more).

In the group of business entities with more than 1,000 employees, almost 40% of production sold in 2015 had been generated by only 263 industrial enterprises; nearly 82% of production sold in 2015 had been generated by 4,820 entities employing more than 100 persons (14.8% of all industrial enterprises). The coefficient of sold production concentration (Table 4.2) was calculated using an interpolative formula, constructed using the Lorenz curve. The coefficient assumed values between 0 and 1; the higher the concentration, the closer the value of this coefficient was to 1. The concentration is understood as the irregularities in the distribution of a given phenomenon according to class size (i.e. the deviation of actual distribution from regular distribution). Table 4.3 presents the dynamics of industry output in conventions. The output of the industry on a constant basis (2005 = 100) for the period 2005 to 2010 was 128.7 (at the end of 2010), and for the period 2010 to 2015 with a constant base 2010 = 100 was 120.0 (at the end of 2015). The “previous year = 100” convention helps to identify the years in which the wave of global financial and economic crisis (starting in 2008 in the United States) reached Poland. The years 2011 to 2014 show a clear weakening of the dynamics of global industrial production in Poland. Investment outlays are financial or tangible outlays, the purpose of which is the creation of new fixed assets or the improvement (rebuilding, enlargement,

687,810.1 985,715.9 1,210,038.6 1,255,515.6 1,301,911.8 1,417,247.1 123,803.5 148,358.2 132,406.1 124,262.3 117,259.5 133,623.8 564,006.6 837,357.7 1 077,632.5 1 131,253.3 1 184,652.3 1 283,623.3 667,301.3 545,547.3

216,396 3,348

Sold production (current prices in mln PLN)

195,268 193,818 200,025 207,579 217,701 222,158 2,483 2,285 2,087 2,064 2,054 2,052 192,785 191,533 197,938 205, 515 215,647 220,106

Entities conducting economic activity (during the year)

846.4

1,997.5

2,857.6 2,909.5 2,955.7 3,003.8 3,094.6 3,188.6 517.0 416.3 310.2 297.8 278.6 279.4 2,340.6 2,493.2 2,645.5 2,706.0 2,816.0 2,909.2

Employed persons as of 31 XII (in thous.)

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2016, p. 39); (2018, p. 33). * Excluding cooperatives employing up to nine persons.

2005 2010 2014 2015 2016 2017 Public sector: 2005 2010 2014 2015 2016 2017 Private sector: 2005 2010 2014 2015 2016 2017 of which: Private domestic ownership* Foreign ownership

Total:

Specification

805.8

1,701.3

2,619.2 2,696.1 2,676.5 2,705.6 2,777.9 2,849.7 522.1 419.6 309.2 296.5 274.9 273.0 2,097.1 2,276.5 2,367.3 2,409.1 2,503.0 2,576.7

5,171.36

3,669.16

2,361.61 3,257.75 3,876.91 3,983.49 4,111.33 4,365.76 3,282.47 4,633.50 5,487.66 5,518.99 5,638.34 5,775.09 2,131.47 3,003.46 3,666.00 3,794.13 3,943.35 4,216.19

Average paid Average monthly employment (in gross wages and thous.) salaries (in PLN)

Table 4.1 Basic data regarding economic entities in industry by ownership sectors and forms of ownership

68  Rafał Wisła and Michał Włodarczyk

Economic and institutional aspects   69 Table 4.2 Sold production concentration coefficients in industry by sections and divisions (in current prices) Sections

2005

2010

2015

2017

Mining and quarrying Manufacturing Electricity, gas, steam and air conditioning supply Water supply; sewerage, waste management and remediation activities

0.832 0.815 0.758

0.816 0.814 0.739

0.816 0.792 0.783

0.815 0.788 0.783

0.673

0.645

0.651

0.639

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2016, p. 67); (2018, p. 62).

Table 4.3 Indices of output of industry Specification

2010

2011

2012 2013

2014

2015 2016 2017

Previous year = 100 For base years 2005 = 100 For base years 2010 = 100

107.3 107.4 100.7 101.5 102.9 106.2 103.1 105.6 128.7 138.2 139.2 141.3 145.4 154.4 159.4 168.3 100 107.4 108.2 109.8 113.0 120.1 123.8 130.7

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2016, pp. 80–82); (2018, pp. 73–75).

Table 4.4 Investment outlays in industry Specification

2005

2010

2014

2015

2016

Total 48,001.9 68,979.2 91,064.4 105,122.6 93,824.8 (in mln PLN, current prices) Indices of investment outlays: For base years 2005 100 133.8 175.8 199.4 174.5 = 100 For base years 2010 – 100 131.4 149.0 130.4 = 100

2017 94,761.5

179.4 134.1

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2016, pp. 324, 329); (2018, pp. 311, 316).

reconstruction or modernisation) of existing capital asset items, as well as outlays for so-called initial investments (Table 4.4). Investment outlays in the Polish economy in 2015 amounted to almost PLN 370 billion (current prices); industry represented 28.4% of this value, i.e. more than 105 billion PLN. The period 2010 to 2015 was characterised by a significantly faster growth rate in investment outlays (149.0) compared to 2005 to 2010 (133.8). For the investment outlay amount of PLN 105 billion in the Polish industry, PLN 10.2 billion was spent on entities employing 49 or fewer people.

70  Rafał Wisła and Michał Włodarczyk A further PLN 18.9 billion was spent on medium-sized entities (with a working force of 50 to 249). The total expenditure of the small- and medium-sized enterprises sector accounted for 27.7% of total industry expenditure in Poland. Of the three main types of outlays, i.e. (1) machinery, technical equipment and tools; (2) buildings and structures; and (3) transport equipment, the first group was by far the largest contributor to total industry (52.8% in 2015), and a high growth rate can be observed for these expenditures (in the period 2010 to 2015, an average of roughly 13.4%). The total expenditure on research and development (R&D) activity, and research in GERD in Poland in 2015, was PLN 18.060 million. Industry R&D expenditures amounted to PLN 3.926 billion, which accounted for 39.03% of total R&D expenditures in Poland (Table 4.5). Compared to 2011, these expenditures increased by PLN 1.960 billion, while a significant increase occurred in the share of this sector in terms of total R&D expenditure in Poland from 16.8% in 2011 to nearly 40% in 2015. Table 4.6 shows the changes in the number of employees in research and development in the area of industrial processing. In the years 2011 to 2015, there was an almost 85% increase in the number of employees in the R&D departments of industrial enterprises. In the research group, this was an increase of 110.7%. At the same time, in other areas of industrial activity, the overall employment increase was less than 1%. Summing up this analysis for the period 2010 to 2015, the following strong trends in the industrial sector in Poland can be observed: ··

27% dynamics of sales of industrial products (in current prices, 2010 to 2015);

Table 4.5 Internal expenditures on R&D activity and research equipment (current prices, in million PLN) Specification Internal expenditures

Research equipment (as of 31 XII)

Grand Of which Of total expenditures, the total capital funds expenditures From Non-budgetary Gross the value Total Of which state units’ budget own-funds 2017 2016 2015 2014 2013 2012 2011

5,546.6 3,921.8 3,926.1 3,630.5 3,319.9 2,729.7 1,966.1

1,832.0 935.0 1,044.5 1,137.4 1,125.7 1,151.7 457.4

539.9 386.5 369.4 348.6 246.5 222.6 188.7

5,006.7 3,535.2 3,556.8 3,281.9 3,073.4 2,507.1 1,777.4

4,671.6 3,343.7 3,253.3 2,948.0 2,750.1 2,284.4 1,647.5

2,026.3 2,246.0 1,719.3 1,375.8 929.7 910.7 571.5

Degree of consumption (in %) 57.6 58.1 58.9 48.0 50.2 66.1 55.5

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2018, p. 405); (2016, p. 421); (2015, p. 461); (2014, p. 459).

Economic and institutional aspects   71 Table 4.6 Employment in research and development activity in manufacturing divisions Specification

2017 2016 2015 2014 2013 2012 2011

Employment in R&D (in full-time equivalents*) Total

Researchers

Technicians and equivalent staff

Other supporting staff

25,020.1 20 ,283.4 19,487.6 17,351.0 13,989.1 11,341.7 10,557.0

18,420.8 14,259.4 12,365.6 11,261.5 9,085.3 7,135.6 5,869.0

4,253.2 4,081.3 4,400.8 3,876.6 3,383.0 2,901.7 2,946.1

2,346.1 1,942.6 2,721.2 2,213.0 1,520.9 1,304.4 1,741.9

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2018, p. 407) (2016, p. 423); (2015, p. 463); (2014, p. 413); (2013, p. 461). * One full-time equivalent equals one person-year spent on research and development activity.

·· ··

42% share in sold production of entities with predominantly foreign capital; Nearly 53% of investment expenditures directed at the modernisation and purchase of machines, equipment and tools directly used in the production process (2015); nearly 40% of expenditures on R&D in Poland were expenditures of industrial entities (2015); more than 110% increase in the number of employees in industrial R&D (2010 to 2015)  .

The above analysis is based on the high dynamics of labour productivity (in industry) as measured by gross added value per employee (Table 4.7). In 2015, this was shown to have amounted to 123.8 (at 2010 prices) and was one of the higher results in the European Union. Level of automation in Polish companies Research regarding the level of automation in Polish manufacturing companies shows that only 15% of factories are fully automated (ASTOR, 2016, p. 12), while 76% of factories indicate partial automation. Still, few factories use IT systems for operational management and production control. The challenges of the third Table 4.7 Indices of labour productivity in industry measured by gross value added per employed person Specification 2010 2011 2012 2013 2014 2015 Previous = 100 Total

2016

2017

2010 Previous 2010= Previous 2010 =100 = 100 100 = 100 =100

109.9 107.2 104.2 102.6 102.7 105.2 120.7 101.2

122.1 102.6

125.3

Source: Statistical Yearbook of Industry – Poland, Central Statistical Office (2016, p. 258); (2018, p. 254).

72  Rafał Wisła and Michał Włodarczyk Table 4.8 Means of automating production processes in industry Years

Automatic Computer- Machining production controlled centres lines production lines

The number of industrial enterprises* 2014 2,444 2,456 1,648 2013 2,363 2,342 1,571 2012 2,419 2,370 1,558 2011 2,372 2,314 1,486 2010 2,292 2,273 1,420 In unit 2014 16,540 15,692 11,082 2013 15,702 14,827 10,396 2012 15,327 14,391 9,536 2011 14,254 13,668 8,866 2010 13,866 12,853 8,430

Numerically Industrial controlled robots and laser manipulators machine tools

Computers controlling and regulating manufacturing processes

637 597 567 540 488

1,080 1,010 980 910 835

2,293 2,243 2,262 2,229 2,152

1,540 1,415 1,342 1,207 1,131

12,353 11,389 10,438 9,285 8,021

40,924 38,234 35,723 34,394 33,097

Source: Science and technology in 2014 – Poland, Central Statistical Office (2015), pp. 135–136. * Data concern economic entities employing more than 49 people.

industrial revolution are still current for those who manage Polish manufacturing enterprises. There are several reasons for this, among them the late adoption of Western technologies (as late as after 1989), low labour costs, lack of access to adequate capital, lack of specialised engineering staff and a focus on marketing and sales areas in order to build market position (Gracel, 2016, p. 38; see Table 4.8). At its current stage of development, Polish industry needs to first build a strong infrastructure in the field of automation and computerisation, which can serve as a foundation for investment in more intelligent technologies. It also requires major investment in terms of preparing managers and engineers to apply these technologies (Gracel, 2016, p. 38). In 2014, there were 8,557 industrial enterprises that employed more than 49 people. In the production process, they were using the following means of automating production processes: ·· ·· ·· ·· ·· ··

Automatic production lines (28.6% of industrial enterprises employed more than 49 people); Computer-controlled production lines (28.7%); Machining centres (19.3%); Numerically controlled laser machine tools (7.4%); Industrial robots and manipulators (12.6%); Computers controlling and regulating manufacturing processes (26.8%) ( Table 4.9).

Between 2010 to 2014, the dynamics of equipment in terms of automating production processes were as follows:

Automatic production lines

1,648 1,179 469 1,228 2,876 11,082 5,304 5,778 4,455 15,537

15,692 6,776 8,916 3,004 18,696

Machining centres

2,456 1,684 772 1,545 4,001

Computercontrolled production lines

1,540 984 556 666 2,205

637 459 178 407 1,044 12,353 2,957 9,396 699 13,052

1,080 600 480 284 1,365

Numerically Industrial robots controlled and manipulators laser machine tools

Source: Science and Technology in 2014 – Poland, Central Statistical Office (2015), pp. 135–136.

Number of industrial enterprises More than 49 persons 2,444 50–249 persons 1,683 250 persons and more 761 10–49 persons 1,786 More than 10 persons 4,230 In units More than 49 persons 16,540 50–249 persons 6,880 250 persons and more 9,660 10–49 persons 3,558 More than 10 persons 20,098

Specification

Table 4.9 Means of automating production processes in industry (in 2014)

40,924 9,418 31,506 2,619 43,543

2,293 1,507 786 1,175 3,468

Computers controlling and regulating manufacturing processes

Economic and institutional aspects   73

74  Rafał Wisła and Michał Włodarczyk ·· ·· ·· ·· ·· ··

Industrial robots and manipulators (increased by 54% between 2010 and 2014); Numerically controlled laser machine tools (36.2%); Machining centres (31.5%); Computers controlling and regulating manufacturing processes (23.6%); Computer-controlled production lines (22.1%); Automatic production lines (19.3%).

In 2014, there were 25,727 active small manufacturing enterprises in Poland employing from ten to 49 people. Within this group of enterprises, the intensity of automating production processes within the overall production process was as follows: ·· ·· ·· ·· ·· ··

Automatic production lines (6.9% of companies employing 10 to 49 people used automated production); Computer-controlled production lines (6.0%); Machining centres (4.8%); Numerically controlled laser machine tools (1.6%); Industrial robots and manipulators (1.1%); Computers controlling and regulating manufacturing processes (4.6%).

On the other hand, the means of automating production processes used by small, medium and large enterprises were as follows: ·· ·· ·· ·· ·· ··

Industrial robots and manipulators (17.7%); Numerically controlled laser machine tools (16.1%); Machining centres (28.7%); Computers controlling and regulating manufacturing processes (30.2%); Computer-controlled production lines (5.4%); Automated production lines (6.0%).

Equipment with the means of automating production processes is checked only in industrial enterprises. In 2014, the largest group of automation means presented by these enterprises involved computers used to regulate and control production processes – more than 43,000 items; this was 5.3% more than in the previous year. Assembly lines also constituted a significant group. The number of automatic and computer-controlled assembly lines increased within the years 2014–2015, accordingly, by 4.0% and 9.0%. The largest increase compared to the previous year concerned the number of machining centres (by 20.3%). Automation capabilities could mostly be found within private sector enterprises. Taking into consideration the size of the enterprise, the largest number of individually analysed automation means was found in enterprises comprising more than 249 employees. The exception was numerically controlled laser machine tools, which were present in enterprises employing from 50 to 249 employees (Science and Technology, 2015, 2016).

Economic and institutional aspects   75 Over the period 2003 to 2013, the density of automation in Poland increased from two to 22 robots, calculated per 10,000 industry-employed individuals. Poland, with its indicator at the level 22 per 10,000 industry-employed individuals, occupies the lower part of the ranking (Figure 4.1). A higher density of automation is visible among the leading countries, as well as in countries with similar levels of development as Poland, e.g. Hungary and Slovakia. The average density of automation in Europe equals 85 machines per 10,000 individuals employed, almost four times more than in Poland. The almost constant growth of this indicator for Poland is undoubtedly a positive tendency compared to the whole of Europe or countries in Central and Eastern Europe; however, it is nonetheless too slow. For example, in 2003 Poland and Hungary experienced almost identical automation density at two robots per 10,000 industry employees. In subsequent years, both economies were characterised by an upward tendency where the level of industrial production automation was concerned, with one difference – in the Hungarian economy, this growth was visibly faster. As a result, the density of automation in 2014 in the Hungarian economy was more than twice as much as in Poland (see Łapiński et al., 2015, p. 11). The differences in levels of production automation in the Polish economy are more visible when compared with the Slovenian, Slovakian and Czech economies. Automation of the Polish industry moves forward at a slower pace than average in Europe. It seems that the Polish industry will not be able to attain a level of automation equal to the European average within at least another next decade. It must be emphasised that maintaining the current tendency will render the Polish industry relatively poorly robotised, and thus less competitive (see: Łapiński et al., 2015, p. 12). The transfer of technologies was analysed within industrial enterprises. The statistics that were collected for this transfer concerned the purchase and sale of licences (excluding standard software licences), research and development work, the means of automating production processes, consulting services as well as other technologies (Table 4.10). Between 2013 and 2015, the largest number of enterprises that bought the above-mentioned technologies mostly paid for licences. The largest number of licences sold abroad was in European Union countries and in the United States. Means for automating production processes were largely bought in European Union countries, as well as in other non-European countries. The purchase of technologies was conducted primarily by companies belonging to the industrial processing sector (Science and Technology, 2015, 2016, p. 133). In Poland, production mechatronisation is not yet fully in place. Compared to Germany (292 robots for 10,000 workers) and South Korea (450 robots for 10,000 workers), Poland is far behind in this area. However, future visions of the Polish economy do take into account innovative development trends. Motor, electronic and metallurgic industries appear to be the most mechatronised in Poland. It is difficult to say which direction the concept of Industry 4.0. will evolve in and what the results will be. It must be stressed that although there have been significant

Figure 4.1  Intensity of the robotisation in industries of European countries – number of machines to 10,000 workers (in 2014). Source: International Federation of Robotics (www​.ifr​.org, www​.worldrobotics​.org), cited in: Olszewski (2016). “Mechatronizacja produktu i produkcji – przemysł 4.0,” Pomiary Automatyka Robotyka, 3, p. 17; DOI: 10.14313/PAR_221/13.

76  Rafał Wisła and Michał Włodarczyk

1,005 897 621 441 170

78 69 54 78 94

715 889 577 429 149

Purchase of

Purchase of

Sales of

2014

2013 71 39 34 63 36

Sales of 519 724 471 318 92

Purchase of

2015 47 72 44 47 32

Sales of

839 1 038 773 491 189

Purchase of

2017 107 53 106 117 59

Sales of

Source: Science and Technology (in 2013, 2014, 2015, 2016, 2017) – Poland, Central Statistical Office (2014, p. 142; 2018, p. 136; 2016, p. 133; 2017, p. 96).

Means of automating Licences Consulting services R&D Other technologies

Specification

Table 4.10 Number of domestic enterprises which purchased/sold technologies in Poland

Economic and institutional aspects   77

78  Rafał Wisła and Michał Włodarczyk developments in Polish industry, these changes are not taking place as rapidly as in other countries in Central Europe.

Discussion If we assume that robotisation is based on digitalisation and that advanced industry automation is an essential condition for the transfer to the stage defined by Industry 4.0 specifications, there are considerable barriers in Poland that must be overcome to proceed to the next stage in the organisation of production processes (Gracel, 2016; Olszewski, 2016; Łapiński et al., 2015): 1. Profile and a relatively small production scale. From a Polish perspective, this signifies that the specificity of produced items, or the organisation of production processes, do not require the implementation of automatic means of production. 2. No need for robotisation means that current organisations, and the degree of technological advancement in production processes in Polish companies, are perceived as adequate, according to the current status of the company. In some cases, this means that entrepreneurs do not consider automation in general a necessity. 3. Low salary rates, and as a result, prolonged periods of amortisation of automation means in the production process (a robotised post in German industry amortises after nine months; in Poland, the equivalent is 36 months). 4. Shortage of specialised staff, particularly in the sphere of mechatronics, i.e. robotics, automatics, sensorics, actuatorics, electronics and IT (a report by the Polish-German Board of Commerce and Industry reveals that a significant acceleration of Polish industry development demands roughly 400,000 qualified workers involving all technology types and levels). 5. A lack of companies owning and producing mechatronic components that are made in-country, which is not a necessary condition for the ultimate mechatronisation of the equipment but will suit the technical and organisational progress of Polish Industry 3.0-stage advancement, i.e. robotisation, based on digitalisation and the advanced automation of stage 2.0, appears insufficient in the present Polish industry situation as a context for discussing full responsibility for the possible transfer to the next stage, as defined by Industry 4.0 assumptions. Assumptions related to concepts such as intelligent production, the Internet of Things and Industry 4.0 are typical of countries with intensive industry production robotisation (Schwab, 2015). The International Federation of Robotics (2014) claims that Poland belongs to the least robotised group of countries. Polish industry development is slower than average compared to the rest of the world (and Europe); at the same time, the process of robotisation is speeding up considerably. According to Rifkin’s conception (2012), Poland has not reached the industrial revolution stage.

Economic and institutional aspects   79 Some currently published papers take the stand that there is a correlation between the evolution of society (Society 5.0) and the development of Industry 4.0. The barriers for Society 5.0 are very similar to those for Industry 4.0: Lack of integrated national strategies, not-adequate legal system, obsolete technology on the market and difficulties in finding qualified employees (i-SCOOP, 2017). Without transparent and stable law dedicated to modern industry, a highly connected and specialised smart factories environment cannot operate and communicate among all other participants (ASTOR, 2017, p. 25). Then the implemented solutions, e.g. robots, algorithms or sensors, provide a lower level of benefits (Schweichhart, 2016). According to a PwC survey from 2016, the biggest challenge for industrial manufacturing companies in terms of Industry 4.0 is the lack of digital culture and training (52% of respondents). They also mentioned unclear economic benefits of digital investments (40%), unclear digital operations vision (38%) and high financial investment requirements (38%). All these topics were way more important than concerns about control of data privacy and intellectual property, lack of standards or slow expansion of basic infrastructure technologies (PwC, 2016). Based on that, Polish transitioning into Industry 4.0 should be based on holistic strategy both for the country and specific manufacturers which should be prepared and upskill themselves. It is difficult to estimate unambiguously what the fourth industrial revolution will bring but one can suggest various risks connected with the development of mechatronics and artificial intelligence. Recognising the risk and defining it properly allows one to make appropriate decisions about implementing or abandoning the implementation of new technologies. Therefore, science should have defined research tasks in which the basis is axiological components, empirical verification, extrapolation using modelling and simulation, evaluation, results interpretation and the verification of strategies and actions (Kuzior, 2017). At the macroeconomic scale, in international comparative studies, testing this process seems to be possible. Unfortunately, it has many limitations.

Conclusion The analysis of the Polish economy and the institutional issue of Industry 4.0 in the country enabled us to derive the following general conclusions. For the period 2010 to 2015, the following strong trends could be observed in the industrial sector in Poland: (1) 27% dynamics of sales for industrial products; (2) a 42% share in producing and selling entities with predominantly foreign capital; (3) 53% of investment expenditures directed towards the modernisation and purchase of machines, equipment and tools that are directly used in the production process; (4) 40% of expenditures on R&D in Poland are contributed by industrial entities; and (5) a 110% increase in the number of employees in industrial R&D (2010 to 2015). Robotisation based on digitalisation and advanced automation in the Polish industry is at a relatively low level compared to other EU countries. Research

80  Rafał Wisła and Michał Włodarczyk pertaining to the level of automation in Polish manufacturing companies shows that only 15% of factories are fully automated, while 76% indicate partial automation. In Poland, the concept of Industry 4.0. remains fairly theoretical, although an increasingly larger group of entrepreneurs are getting ready to put new solutions into practice. Industry 4.0 should be analysed in a multifaceted manner, as various countries approach the subject differently. A general comparison of German and Polish approaches demonstrates a more practical understanding of the phenomenon in Germany and a much more theoretical approach in Poland. Nevertheless, one can nonetheless highlight a number of representative aspects in the phase of discussion as well as concept implementation itself. At the latter stage, state government initiatives are more crucial than those provided by local government and those of the individual entrepreneurs, who may be inspired to follow foreign examples. What we cannot observe, however, is the involvement of society, as there have not been any adequate institutional proposals regarding education in this matter. There are no educational proposals in new drafts of the Law for Higher Education, which may result in reversing the system from the challenges of Industry 4.0 posed at education and research. The following areas where challenges exist can be identified: Output (personalised, local production and mass customisation), process (networked manufacturing and cluster dynamics), business models (fragmentation of the value chain), competition (converging frontiers), skills (interdisciplinary thinking as a key component) and globalisation (lighter footprint).

Acknowledgements We would like to express particular thanks for inspiring us to write this text to Professors Gerhard Banse (EA European Academy of Technology and Innovation Assessment – Bad Neuenahr-Ahrweiler, Germany), Andrzej Kiepas (Silesian University of Technology, Poland) and Ewa Okoń-Horodyńska (Jagiellonian University, Poland).

Note 1 The first robots in Poland were used in 1976, at an enamelware factory in Olkusz (Olkuska Fabryka Naczyń Emaliowanych). Machines developed by the Norwegian company Trallfa were used, as well as enamelware tooling developed by a German company, De Vilbiss. In 1980, the Polish industry was able to make use of 600 robots and 370 machines. In the first year of martial law – in 1983 – not one robot was produced or used. In 1988, 508 machines were used; in 1989, 805 machines; and in 1990, 1253 machines. An adequate number of personnel was not available to rationally apply robots. The education of robotics engineers only began in the late 1980s and the early 1990s, when the Department of Automatic Control and Robotics was opened at the Faculty of Mechatronics, at the Warsaw University of Technology, and subsequently at most Polish technical universities (Olszewski, 2016).

Economic and institutional aspects   81

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Challenges for the development of the principles of Industry 4.0 in the context of occupational security and safety – selected conditions Jolanta Maroń

Introduction The automation and robotisation of factories allowed for an unprecedented optimisation of production processes. Owing to the fact that robots and drones do not get tired of performing monotonous, repetitive activities, they are precise and fast; they do not receive a salary or demand social benefits and can work continuously; their work is cheaper than human labour and their efficiency is unattainable for human workers employed in carrying out identical work. The development of automation was followed by the emergence of the industrial internet of things (IIoT), i.e. tools, devices and industrial machines equipped with an IP address that are able to communicate with other intelligent machines via the Internet. The objective of Industry 4.0 is to bring into existence a smart, self-regulating and interconnected industrial system integrating cyber-physical systems into manufacturing. Industry 4.0 is a new paradigm of production that leads to faster and more precise decision-making and an entirely new approach to production, work organisation, manner of work and task performance, which have a significant influence on the health and safety of workers (Polak-Sopinska et al., 2019). The objectives of this chapter are to provide an overview of the potential effects (positive and negative) of Industry 4.0 on occupational health and safety (OHS) and to list some of the recommendations regarding the integration of OHS into manufacturing in the Industry 4.0 context. The author carried out a comparative analysis and an insightful review of the literature currently available on this topic, as well as research reports. The research results clearly indicate that there are many risks as well as opportunities for occupational health and safety that derive from Industry 4.0. A considerable challenge, especially in the transitional period, is posed by the insufficiency of initiatives with respect to occupational health and safety, including standards and regulations, which may render them incommensurate in the face of newer threats as Industry 4.0 technologies emerge. Furthermore, it may lead to forfeiting the proactive approach towards occupational health and safety that has been established in most industrialised countries. Further research is required to enhance the integration of occupational DOI:  10.4324/9781003184065-5

Occupational security and safety  85 health and safety into manufacturing in the context of Industry 4.0. To achieve this, an interdisciplinary approach needs to be adopted drawing on the expertise of a team comprising experts from different fields of science, e.g. engineers, IT experts, psychologists, social and occupational scientists and medical personnel. This chapter aims to reflect on the integration of OHS into Industry 4.0, discusses the potential effects of Industry 4.0 technologies on OHS and finally lists some of the recommendations found in scientific literature. The chapter includes a literature review on recent research results analysing the implications of Industry 4.0 and health and safety issues (Wróbel-Lachowska et al., 2019).

Industry 4.0 background for OHS risks and solutions Activities related to the implementation of the Industry 4.0 concept include, in addition to technologies, interactions with people and job security. Industry 4.0’s intention is to adapt the workspace so that it can almost immediately respond to changing customer requirements. The indisputable fact is that Industry 4.0 is associated with automation, but people in the production process will never be definitely made redundant. Human resources in Industry 4.0 remain key players; communication between people and machines is the foundation of the success of the Industry 4.0 connectivity concept. Work in the Industry 4.0 factory has a diverse and complicated set of challenges, and the re-configuration of production areas, including very fast tool changes and even physical movement of equipment, can pose a range of challenges for occupational health and safety while a very large number may involve the need to carry out a risk assessment separately for each of them (Wróbel-Lachowska et al., 2018). For the health and safety of personnel and data in a secure network, considerations must be treated professionally to comply with laws and regulations – local, state and international. Industry 4.0 provides an opportunity to further increase work safety and the possibility of collecting data in real time and then using it before potential danger becomes reality, e.g. on factory equipment, a set of tools can be installed that are able to detect and report operators’ behaviours that may pose a threat to occupational safety. This equipment can take a number of forms, the most recognised being intelligent digital cameras that take photos or video, which they then send to a central point control system, which automatically signals any abnormal behaviour, such as employees entering an area with no entry allowed. Many system engineers also promote equipping machines with safety sensors that can immediately detect when an operator enters the danger area or an employee approaches too close to a particular machine or device at the factory. In such cases, the default response is to simply turn off the machine, or in the case of a collaborative robot, slow down the machine to a safe speed, which gives the employee time to move away from the source of danger. Modern industry comprises real-time communication, big data, human–machinery cooperation (connectivity), remote sensing, monitoring and process control, autonomous equipment and interconnectivity, which are becoming major assets in modern industry. As the fourth industrial revolution or Industry 4.0 is becoming

86  Jolanta Maroń Table 5.1 Comparison of the current approach to OSH management with the proposed one The current approach

Proposition

Global risk assessment (in relation to profession group, employee group). Risk assessment performed when changing jobs (change of technology). Selection of preventive measures for changes in the workplace (technology change). Lack of control and information about the loss of protective parameters of personal protective equipment. Training addressed to a selected group of employees.

Personalisation of risk assessment in reference to an individual employee profile. Dynamic risk assessment taking into account the change in the level of work environment factors. Dynamic risk management by means of automatic selection of a protection level adapted to the changing environment. Real-time monitoring of protection parameters and their automatic adaptation to the changing environment. Training tailored to the individual employee profile and activities in the risk management system.

Source: Gralewicz (2018). Safety Management in an Intelligent Work Environment, pp. 18–20.

the predominant reality, it will bring new paradigm shifts, which will have an impact on the management of occupational health and safety (see Table 5.1). The automation and robotisation of factories have enabled an unprecedented optimisation of production processes. The most recent stage in the development of automation was the emergence of IIoT. In addition to communicating with each other, intelligent machines can also be remotely controlled from anywhere in the world – all that is needed is a terminal device tablet, notebook or smartphone with internet access. If an intelligent machine is equipped with appropriate process sensors and recorders, as well as data transmission systems, we can receive current information about temperature, pressure, humidity, current parameters, vibrations, chemical composition, location and video transmission. The type of collected data depends on what sensors and recorders are used. In a recent report, 39% of Polish enterprises declared a high level of digitisation, 45% claimed that their companies are at least at the same level as their most important competitors and Polish companies overall are projected to spend up to 7.7% of their annual revenues on activities related to digital transformation by 2020 (PricewaterhouseCooper Reports, 2020). Industry 4.0 is an advanced stage of business development triggered by digital transformation in which value chains, products, services and business models are changing. After the third industrial revolution, which involved the automation of individual processes, we are now witnessing the fourth, enabling the connection of devices within digital ecosystems, and deepening integration within horizontal and vertical value chains. The main factors enabling the development of Industry 4.0 are: ·· ··

The amount of data available The tools for the analysis of that data

Occupational security and safety  87 ·· ··

The mobile connectivity The digital channels available to the consumer (PricewaterhouseCooper Report, 2020)

Modern Polish companies focus on quick and easy changes consisting of the use of digital tools both to increase production efficiency and reduce costs. According to entrepreneurs, the main obstacles to deeper changes are high costs and lack of necessary infrastructure (e.g. too few available broadband Internet connections). Industry 4.0 is mainly associated with the automotive industry. However, traditional industrial sectors, such as the mining industry, are opening up to intelligent machines. Sensing abilities in mining machines allows them to respond in real time to anomalies in their work and to predict any errors or failures. Some aspects of the programme of an intelligent mine are run in the largest Polish mining companies. In turn, for the issue of failure forecasting in factories, Industry 4.0 technology for maintenance and predicting upcoming failures is not used as often, as technology allows for errors and accidents. The 2017 PricewaterhouseCooper Report shows that the next five years will be a period of a significant increase in the investment expenditure of Polish enterprises on activities related to digital transformation. In the last two years, their average amount was 5.7% of the annual revenues of companies, but by 2020 they increased to 7.7%, which translated into an expenditure of over PLN 100 billion a year. As many as 83% of respondents were convinced that they would receive a return on their investments within a maximum of five years. The entire industry transformation to model 4.0 will be a significant change in terms of process organisation. The role of humans will change radically. The work of making key decisions and the responsibility for coordinating the production process will be moved to a new role. They will have to develop new capabilities in process programming, defining procedures and going beyond the whole machine initiative. They will remain as process supervisors themselves. The change will be difficult from the point of view of the huge generational differences of people participating in it. Organisations will need to find leaders who will carry out this change and inspire organisations to develop further in new areas in line with the thesis that Industry 4.0 is primarily evolution. Among Polish enterprises, 29% of organisations intend to use digital technologies to modify their existing range of products and 27% declare that they want to expand their offerings with new innovative products, while 27% will ensure their investment in services is based on data analysis of other companies. In connection with investments in digitisation, Polish entrepreneurs expect specific benefits, primarily related to efficiency; 34% of companies expect efficiency to improve by over 30.5%, while 40% expect it to grow by 11% to 30%. According to 22% of respondents, the introduced changes will reduce costs by more than 30%, while 20% expect the same increase in revenue.

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Occupational health and safety in the Industry 4.0 era Implementing the development of Industry 4.0 and the effective use of new technologies is a very complex and time-consuming process. To gain an advantage over competitors requires the full commitment of the management and security staff for planned investments. Based on a large number of transformation projects carried out with leaders in the industry, PwC experts have developed six steps to make a company a leader in Industry 4.0:

1. Strategy creation 2. Launching the pilot programme 3. Precise definition of needs and resources 4. Learning data analytics 5. Building an appropriate organisational culture 6. Creating an ecosystem favourable to Industry 4.0

The main issues concerning occupational health and safety in the Industry 4.0 era are: Whether companies treat OHS properly, whether they correctly estimate the consequences of Industry 4.0 on OHS, whether employees gain or lose and finally whether employees should worry. According to the assumptions of Industry 4.0, human workers will be continuously disappearing, due to a large extent to seamless interconnectivity and the large volume of available information data. Experts predict that Labor content and work organization will change the way the human factor is taking part and adding value in many industrial value chains. This will have consequences both for low-skilled workers and their operational shop floor activities, but also for high-skilled white collar and management representatives, such implications will have significant impact on workforce. (Sima et al., 2020) An overview of the relevant research and literature regarding the possible implications of Industry 4.0 on human health and safety shows a shortage of initiatives, including standards and regulations, which poses difficulty in the face of constantly appearing risks of Industry 4.0 as technologies emerge. Efforts on the part of engineers, IT experts, psychologists and social and occupational scientists shall continue to grow. The phenomena listed are accompanied by changes in work environments as follows: ·· ·· ··

Modifications of work processes due to the introduction of non-standard productions (direct design approach to production) Multifactorial risk due to the complexity of new technologies and work processes Machine failures due to the increased degree of multi-functionality of the production process

Occupational security and safety  89 ·· ·· ·· ··

Flexible hours and flexible work processes Mobile work Information overload of employees Lack of solutions guaranteeing privacy protection and personal data protection

It should be mentioned that security measures limiting the flexibility of production processes or preventing the full use of their potential, e.g. closing machines in safety zones, will not solve the problem. Overloading employees with information while not applying procedures to protect personal data leads to disturbances. In addition, the use of advanced ICT technologies in the field of occupational safety encounters legal limitations regarding the possibilities of functional assessment, which puts it in an intelligent work environment. The current static approach to risk management becomes insufficient with dynamically occurring objects in the work environment. Research results from the third stage (2014–2016) of the multiannual programme Improving Safety and Working Conditions in the field of scientific research and development work (funded by the Ministry of Science and Higher Education/National Center for Research and Development and coordinated by the Central Institute for Labor Protection – State Research Institute) provide further insight. This requires changes in the approach to occupational risk management in the context of using the traditional hierarchy of OHS measures. This is a set management system useful for health and safety applications and the active creation of appropriate conditions for employees. PN-ISO 31000:2012 (3) defines the management of any type of risk in a systematic, transparent and reliable manner. These are recommendations to implement in OHS to comply with legal provisions in this regard and to actively create appropriate working conditions. Types of threats are changing along with advanced technologies. This, in turn, necessitates the development of a new approach to methods relating to risk management in an enterprise, forcing enterprises to seek advanced technologies and solutions that guarantee the improvement of employee health and safety conditions as well as the environment.

Intelligent work environment management in Industry 4.0 Grzegorz Gralewicz (2018) proposes the concept of managing an intelligent work environment, then the use of new technologies and solutions that will enable a reduction in real time of changes in the work environment factors – such as personalisation of risk assessment in relation to the employee’s individual profile, taking into account their psychophysical state – as well as risk factors in the work environment and its location relative to machinery. Thus we have a complex optimisation of decision-making processes leading to dynamic risk assessment and dynamic management in an intelligent work environment. This approach also allows us to perform simulations and optimisations, which significantly reduce the time of application at the workplace as well as giving significant financial benefits.

90  Jolanta Maroń Industry 4.0 requires a dedicated security protocol. There are many different security protocols on the market: openSAFETY, Sercos, Profinet, etc.; all widespread data systems now have a secure version. They were all designed to develop older wired systems to turn off machinery and equipment and to allow greater information flow to maximise equipment uptime and shut-down as a last resort. An alternative to these protocols is the safety zone module, which constantly checks the condition of the cables and negates the need to invest in a separate safety system. Risk assessment should be made of each scenario for which there is a likelihood of occurrence (actual and any machine configuration that can be selected), while people must undergo the necessary training to work effectively in this more dynamic environment. In applications where physical views of machines and devices are always required, the same degree of protection will still be required – the most unpredictable and sensitive aspect of every production environment has always been and remains everyone working in this environment, and no effort should be spared to protect people, no matter what production processes were implemented. Figure 5.1 indicates the results of the ranking of employees’ preferences as to improving their safety performance in the future. While individual system components can be considered “safe,” treating them together can be a completely different matter. One example of this approach in an Industry 4.0 environment can be the addition of a requirement to programme alternative motion paths for autonomous equipment or robots that encounter obstacles in their paths in the factory. Table 5.2 presents the hierarchy of occupational risk management measures in the light of the new approach to OHS in Industry 4.0.

Figure 5.1  How would you like to use data and/or analytics to improve your safety performance in the future? Source: Safety Data Survey (accessed March 2020).

Occupational security and safety  91 Table 5.2 Hierarchy of occupational risk management measures – a new approach Avoid threats, eliminate threats

With the use of solutions having the following functions:

•• virtual design and planning •• testing 3D models – modelling, optimisation, visualisation Reduce, minimise By using technical means having the following functions: threats •• monitoring of work environment factors and employee activity •• monitoring of machine park parameters and adaptation to changing conditions •• monitoring technology parameters By organisational measures having the following functions: •• warning and informing employees •• monitoring of work environment factors and employee activity •• health monitoring Improve employee Through training adapted to the individual employee profile at each behaviour hierarchy level Source: Gralewicz (2018). Zarządzanie bezpieczeństwem w inteligentnym środowisku pracy (2), p. 20.

The obtained effects may be listed as follows: ·· ·· ·· ·· ··

Freeing the operator from monotonous and stressful situations Significant increase in the effectiveness of the quality control process and a high detection efficiency of the products Detection of defects invisible to the naked eye High operational safety by tailoring protection measures supported by risk analysis Process optimisation through stable cycle time of automated operation (Mathis, 2018)

Figure 5.2 presents safety technology ranking, which constitutes a guide to implementing technology in world-class safety processes. It helps to comprehend how technology will enhance future safety applications, how data can aid continuous improvement in an organisation, how to implement safety technology to assist during inspections and how technology can assist safety professionals with training workers across all generations. The question is not why an organisation should implement safety technology, but when.

Safety technology roadmaps in Industry 4.0 According to Terry Mathis (2019), organisations should create safety technology roadmaps updating safety programmes and processes to meet the requirements of progressing Industry 4.0. They should formulate a projection, a flexible plan to adapt to challenges (see Figure 5.3).

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Figure 5.2  The ranking of values of safety technology. Source: https://www​.ehstoday​.com (accessed May 2020).

Figure 5.3  Safety technology roadmap ranking in Industry 4.0. Source: EHS Today, Unlocking the Value of Safety Technology, EHS Today Library (accessed February 2020).

Occupational security and safety  93 The list of types of items to meet such requirements and their potential uses is as follows: ·· ··

··

··

··

··

··

Microlearning – device-based modules of training utilising the latest brain sciences and other breakthroughs, and providing follow-up training with easy access to information and teaching of the training-to-performance progression Wearables – devices that go with the worker and can track anything from heart rates and calories burnt to location and sudden motion; falls can be detected and reacted to in real time; workers can be warned if they are entering areas with new or unusual dangers; workers’ behaviours related to safety can be monitored with exacting accuracy and discrete feedback mechanisms Mobile communication – tablets and mobile phones can be used to hold training, groups can be formed around them and safety manuals updated; incident reporting can be delivered, polls and surveys can be taken, prompts can be sent to workers to do stretch-and-flex sessions, observations or audits or take breaks, leaders can send messages of strategy, lone workers and drivers can be reached with training or informed without travel costs and lost work time, emergencies can be addressed more quickly and lessons learnt from incidents can be communicated in a timely manner Sensors – can alert heavy-equipment operators of the presence of workers in their blind spots (and sometimes equipment can react); sensors can also tell when someone enters a work zone and if they are wearing the proper PPE for that area; they can also have chips built into clothing or equipment to track and locate any worker and can determine if everyone on a shift actually left the workplace at the end of the day Robotics and drones – confined space entries are being performed by robots rather than workers, and inspections at height and aerial surveys are performed by drones; it takes workers out of harm’s way and allows them to operate a piece of equipment that takes all the risks Smart signage – many cardboard and metal signs are being replaced with tablet-type devices that can be stationed in critical areas and changed or updated online; it allows more control and quicker changes; some organisations are automating control of either foot or vehicle traffic in construction zones or hazardous areas of manufacturing plants Exoskeletons – can be used to avoid sprains and strains, prevent cumulative injuries, or turn a worker into a human forklift if workers are doing awkward, repetitive or exceptionally heavy work

Adopting such solutions certainly depends on the budget and resistance of an organisation. Prices on these new technologies are being reduced quickly whereas the resistance takes more time and effort to overcome, yet it is necessary to prepare workers mentally for inevitable changes such as how the IIoT, artificial intelligence (AI) and Industry 4.0 can help various sectors in the new post-coronavirus crisis paradigm (Chaudhury, 2020). According to the CII, its priorities currently

94  Jolanta Maroń fall into three phases: Survival, recovery and business as usual along with digital transformation (Chaudhury, 2020). The necessity evolves to solve problems with digital transformation, its challenges, hardware, software and core services that can optimise industry operations in the field of development and implementation of solutions based on IT, AI and automation of Industry 4.0. Ilya Izmaylov, Business Transformation Director at Zyfra said: “[T]he path to Industry 4.0 should be followed by creating a consolidated digital culture as, in fact, the effect can equal to zero without the motivated participation of all employees, from top management to operating personnel” (cited in Chaudhury, 2020).

Industry 4.0 safety conditions in the coronavirus pandemic outbreak Following the outbreak of the coronavirus, Industry 4.0 has undergone tremendous pressures. Recent reports document that factories in China have been disrupted by shutting down on a massive scale. A lot of the impact is assessed based on the thesis that manufacturing continues to be mostly traditional, i.e. manufacturers produce goods with the same materials and components in bulk and distribute them through well-established supply chain networks globally. The outbreak has shed light on the advantages of Industry 4.0 and cloud manufacturing – in particular, what manufacturers call a “high mix, low volume” solution that gives manufacturers the flexibility to produce products on demand at varying quantities in response to orders that are made at irregular intervals at varying amounts each time. The case of Chinese factories shows that manufacturers have to embrace a radical shift in paradigm by implementing cloud computing, the internet of things, virtualisation and advanced computing technologies. The problem arises that Industry 4.0 is assumed to be for large-scale robotics and automation. Many organisations have reached a certain level of automation yet often the digitisation of manufacturing processes is limited to robotic tools and digitising enterprise resource planning (ERP) processes to enable machine operators to collect, store, manage and integrate manufacturing processes on accessible software. Continuing to provide assistance and maintenance services, even abroad while workers cannot reach their workplace, seems very complicated. Cuttingedge technology, built-in sensors and connectivity constitute a powerful weapon against COVID-19 and further pandemic restrictions. In view of Industry 4.0, many companies have long equipped themselves to provide remote assistance. Many machines are equipped with remote monitoring sensors, and several companies have predictive maintenance programmes to avoid blocking production and showing breakdowns. Priorities currently fall into three phases – the survival phase, recovery and business as usual – along with the digital transformation. These are some of the ways to move directly into the third phase and build a more resilient business (Chaudhury, 2020). There is an urgent call for digital transformations and their capabilities, as well as hardware, software and essential services for human

Occupational security and safety  95 workers’ safety that can optimise industry operations in the field of development and implementation of solutions based on IT, AI and automation for industry. Renowned international and national industry experts present a concrete view of the safety of human workers in the pandemic crisis situation. They view the use of digitalisation as transforming the operations of the mining sector (e.g. Chaudhury, 2020), and take ideas of implementing intelligent mine solutions. Mining companies face the challenge of providing industrial safety while simultaneously increasing the completeness and efficiency of ore output, extracting useful components from it and increasing the productivity of mining equipment operations. All these challenges have been addressed over a long period of time in the mining industry. Yet, the use of digital technologies can make it possible to do so on quite a different level of quality. The notion is that after each load and unload, truck drivers obtain the most optimum route according to a complex of criteria. The data is visualised for the excavator operators and the truck drivers on the smart panels in the cabin to help them choose the best option. Dynamic optimisation enables the distribution of haul trucks along routes in an open cycle with a multi-criteria optimisation factor. The system also allows shift changes, break times and refuelling, among other things, to be optimised and haul trucks’ loading violations to be managed and monitored (Chaudhury, 2020). In order to increase production efficiency in accordance with industrial safety standards, there is a need to develop innovative solutions for the mining industry, including dispatching and diagnostic systems, robotised autonomous dump trucks and drill rigs, analytics for solving mining process optimisation problems, AI and computer vision technologies. Implementation of all these innovative solutions will inevitably lead to an intelligent mine safe for people and effective for business.

Conclusions and recommendations The author used research methods and techniques including induction and deduction methods, analysis and synthesis, a critical analysis of the literature currently available on the subject, as well as a comparative method to elicit key aspects of safety precautions in Industry 4.0. The staff of Industry 4.0 factories are required to undergo the necessary training so that employees thoroughly understand the ethos and capabilities of Industry 4.0 in cooperation with component suppliers and safety engineers, realising that a production environment consistent with Industry 4.0 concepts is possible in practice. Most medium and small businesses do not want to invest in security because they do not see a direct impact on profits. This problem looks different in large plants or capital groups, where the company’s management is aware that if an accident occurs in any branch or division, the whole group is perceived as an employer not caring about the employee’s safety. These companies often have additional safety requirements and it may happen that their criteria exceed the imposition of rigour by the legislation system. In addition, they routinely organise

96  Jolanta Maroń training in this field for their employees (on the subjects of the tool directive, machinery directive, harmonised standards, risk assessment, etc.): ·· ·· ··

Security audit for compliance with requirements Modernisation/adaptation in accordance with the recommendations As-built audit

Companies are routinely obliged under the Labour Code to carry out OHS services, which are run either by an advisory body or by maintenance services responsible for the technical condition of the machine park. Actions that represent a low cost compared to possible losses in the event of an accident may require two-level training for management and employees from the maintenance, automation and electric departments, which will allow them to become familiar with the law in force both in Poland and the EU. Taking such training ensures increasing awareness and acquired competencies for further activities in this area. Owing to this, it is possible to carry out professional threat analysis in positions, independently or with the support of external companies. A methodology for such actions is necessary, as adequate knowledge and training of participants will result in avoiding many problems. Organisational shortcomings or operator innovations that increase efficiency can be properly categorised. When staff is equipped with knowledge of minimum or essential requirements, any potential accidents that may be caused by people’s innovative solutions without being aware of the quality response for such acts can be easily avoided. The reason for such actions is unawareness of threats generated by such changes or consciously executing commands of superiors who want to improve performance. At each level of the hierarchy, a dynamic risk assessment should be undertaken, taking into account real risk factors in the work environment, and then the assessment should be personalised in relation to each employee profile. It should be emphasised that future work related to the concept of Industry 4.0 will certainly focus on the further effectiveness of the cooperation of operational elements of production systems and human workers and monitoring their effectiveness in all areas of Industry 4.0. Safety culture is a shared value that should not be separate from overall organisational culture but should rely on management commitment and employees’ engagement as the human component of operational excellence. The author recommends that further research on the impact of OHS in Industry 4.0 in the future should consider the following: ·· ·· ··

A shift in balance from designing environmental controls for avoiding risks to increasingly designing methods for safer engagement in potentially risky situations as well Minimising employee risk might lead to policies requiring workers to only operate on company premises or other highly controllable environments Exploration of what others have already learnt about the OHS implications of this shift – from mining operators who have been working with the

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·· ··

··

·· ··

technology for over a decade to the universities deploying autonomous meal delivery bots With coronavirus experience, technology will increase the scope for virtual work or telework to a range of different areas (there are some potential workplace health and safety issues that need to be addressed as a consequence) The rise and fall of specific jobs, which will be linked to emerging consumer demand for specific goods and services. There are a number of services that an ageing population will want and delivery of these services will not be replaced by robots An age-diverse workforce is a different challenge for an organisation, especially in occupations that have a degree of physical or manual components to the way they work, e.g. building and construction workers, surgeons, nurses and other medical professionals Global warming and environmental change mean that natural resources will become more valuable, and their use and protection may be affected Population growth and megalopolis problems, e.g. transport, commuting, safety and consequences for workplace health and safety

Discussion Industry 4.0 is well underway and already having a big impact on manufacturing throughout the world. Technologies such as IIoT, big data and analytics, digital twin/thread and the smart connected factory and supply chain are all elements of Industry 4.0 that are becoming ubiquitous in almost every manufacturing company. Yet, Industry 4.0 is proving to be much more sophisticated than just new technology; it is creating new interconnectivity, new industries and processes. The impact can already be observed in the following fields: Additive manufacturing, artificial intelligence (AI), augmented reality (AR)/virtual reality (VR), mobile computing, digital manufacturing, cloud computing, edge computing, blockchain and world-class maintenance. Yet, it is also important to ensure the interconnectivity of human workers with machines and equipment, thus ensuring OHS. There are more and more technological innovations to protect against accidents or loss of life and provide comfort in the workplace.

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Occupational security and safety  99 Sąsiadek, M., Basl, J. (2018) ‘Świadomość i poziom wdrożenia koncepcji przemysłu 4.0 w wybranych polskich i czeskich przedsiębiorstwach.’ Artykuły IZIP, Polskie Towarzystwo Zarządzania Produkcją, Opole, pp. 189–98. Schwab K. (2018) Czwarta rewolucja przemysłowa. Studio Emka, Warszawa. Sima, V., Ileana, G.G., Subić, J., Nancu, D. (2020) ‘Influences of the industry 4.0 revolution on the human capital development and consumer behavior: A systematic review.’ Sustainability, 12(10), p. 4035. DOI: http:​//​dx-​​1doi-​​1org-​​1fbpq​​26cp0​​221​.h​​ps​ .bj​​.uj​.e​​du​.pl​​/10​.3​​39​0​/s​​u1210​​4035. Wittbrodt, P., Łapuńka, I. (2017) ‘Przemysł 4.0: Wyzwanie dla Współczesnych Przedsiębiorstw Produkcyjnych.’ Innowacje w Zarządzaniu i Inżynierii Produkcji 2, pp.793–799. Wrobel-Lachowska, M., Polak-Sopinska, A., Wisniewski, Z. (2019) Challenges for Logistics Education in Industry 4.0. In: Nazir S., Teperi AM., Polak-Sopińska A. (eds) Advances in Human Factors in Training, Education, and Learning Sciences. AHFE 2018. Advances in Intelligent Systems and Computing, vol 785. Springer, Cham. https://doi.org/10.1007/978-3-319-93882-0_32.

Part 3

Regional innovation systems





6

Regional innovation in the example of Małopolska Tomasz Kusio

Introduction The issue of innovativeness is important from the national point of view, in particular, bearing in mind the low level of innovativeness of Poland. Despite the passage of years, Poland still remains closer to the end than the beginning of the European list of countries that are innovative. In order to be able to change the level of innovativeness in relation to other countries, the dynamics of increasing innovation should be improved. The so-called innovation intensity is spoken about mainly in relation to organisations, and even more strictly in relation to business organisations such as enterprises. In the context of territorial innovation development, smart regional specialisations are currently of great importance. Regionalisation is also reflected in agile and networking theories, in particular with regard to clusters. Clusters also include areas that are not necessarily administratively defined, such as provinces. Very often clusters are industry clusters, going beyond administratively defined territories. Innovation issues in the regional context are gaining importance not only due to the growing importance of clusters or smart regional specialisations. Regions, like countries, are also subject to evaluation and indexation. Apart from the European Innovation Scoreboard, there is also the Regional Innovation Scoreboard, which emphasises the importance of regional innovation. The importance of regionalism and the specificity of its functioning is a well-known and still-sensitive topic in some cases. An example of the great importance of regional autonomy was and is the individual and collective speeches of inhabitants, representatives of regions. Recognition of the importance of a region and its potential is often emotionally and politically exploited in political speeches or political power struggles. From this point of view, the importance of the region’s innovativeness is increasing in order to support the processes of strengthening the regions and bridging the differences in living standards in all European regions. The aim of the work is to try to refer to the region as an entity subject to innovation assessment in the context of potential factors determining innovativeness and internal connections of organisational units located in the region. An example that will serve to obtain the results of the evaluation of the region will be the region of Małopolskie Voivodeship. For this purpose, a critical analysis of DOI: 10.4324/9781003184065-6

104  Tomasz Kusio national and foreign literature will be applied, as well as an analysis of innovation reports, including in particular the European Innovation Scoreboard and the Regional Innovation Scoreboard.

The innovative potential of regions A territory can be defined as a complex set of actors, resources and values, a common good consisting of tangible and intangible assets. Tangible and intangible assets consist of a complex set of actors, resources and values constituting the foundations for creating value, which is an indispensable element of innovativeness, the occurrence of which in turn means achieving an increased standard of living of the inhabitants, but also increasing the level of competitiveness of enterprises. Tangible and intangible assets refer to actors, resources and values in a given territorial area, and their development is an opportunity for the region to increase competitiveness. The collection of tangible and intangible resources in a region consists of the total regional potential, whose development will determine the competitiveness of the region. The development potential of the regions can be considered as the most promising in terms of competitiveness. The development of a region’s competitiveness is influenced by the quality and growth of, among others, the intellectual capital of the region, which may include (Gębska, 2018):

1. Human capital of the region’s inhabitants; 2. Social capital of the region’s inhabitants; 3. Regional development capital; 4. Structural capital of the region.

Each of the above-mentioned types of capital, consisting of the total intellectual potential of the region, may be characterised as either tangible and intangible attributes. The capital may also be characterised by a combination of both tangible and intangible attributes. The development of the region’s material resources is carried out through partial projects, development initiatives. In the implementation of development initiatives aimed at fulfilling social or economic objectives, the key role is played by individuals, groups of people or organisations, further known as stakeholders. In the context of public organisations, the importance of stakeholders is growing due to the fact that the main objective of public organisations is precisely actions for the benefit of society and particular social groups, which are the main beneficiaries of public benefit activities (Spik and Mijal, 2018). The inhabitants of a given region together with their abilities, skills and work make up the human capital of that region. In addition to being the entity for which the activities of the public authorities are carried out, the residents are also the target group of business for which they are consumers. In addition to being the recipients of services and numerous activities of entities for which they are important stakeholders, the residents are also those belonging to business, scientific, non-governmental or public administration organisations,

Regional innovation in Małopolska  105 with their personal potential in their activities. The inhabitants of the region implement development initiatives. The social activity of citizens who, apart from their involvement in the social and economic life, are involved in enterprises or science and public entities and are engaged in initiatives of a social character, serving the social benefit, is becoming increasingly important. The issue of public benefit in the development of the region is more and more important because of the growing importance of social values. Thus, not only the perception of the functioning of profit-oriented organisations is changing. The issue of self-financing potential is becoming more and more important in the functioning of these organisations, which is in line with the search for sources of financing for socially useful projects. In the context of enterprises, i.e. primarily profit-oriented organisations, this orientation is also subject to modification. For-profit begins to be treated not in a one-dimensional way, i.e. financially, but in a multidimensional way, where the financial profit is replaced by value. Building value for stakeholders means, among others, time, satisfaction and other intangible assets (Rostek and Zając, 2018). The importance of social values for entrepreneurs is reflected in corporate social responsibility. A person, a citizen, an inhabitant of a region, a provider of individual productive and intellectual potential, is an intangible reflection of the potential. The growing importance of a person is expressed precisely in social entrepreneurship. The development of the value chain can be considered a network stream (Adamczyk, 2018) whose importance is growing. With the growing importance of values whose expression is not profit in the financial sense, but values whose attributes are intangible, the results and solutions whose main application is the social dimension become more significant. Social innovations can also be defined as that part of innovations that aims to better meet the needs of the region, local communities, businesses and organisations (Skawińska et al., 2014). Social innovations are an expression and result of the social activities of, among others, the inhabitants of the region. Social capital consists of, among other things, relations between the inhabitants of the region, as well as inter-institutional relations. Regional business-oriented institutions, including development agencies, play an important role in supporting the development of the social capital of the region. In the regional dimension of supporting innovation, especially in the context of institutionalisation, innovation centres play a large role. Business environment institutions strongly fit into the logic of social and economic development, not limiting themselves exclusively to the local or regional dimension. They can be classified as institutional infrastructure as regards regional or national innovation potential (Gródek-Szostak, 2016). Human capital and the social capital of the region’s inhabitants are strongly connected with each other and constitute a growing factor of regional development, directly and indirectly. These two types of capital can be related to people. As far as the structural capital of the region is concerned, one can distinguish among its elements social infrastructure and technical infrastructure, while among the elements of development capital one can distinguish R&D activity, investments, higher education and population migration (Gębska, 2018). The basic instrument for supporting the development of entrepreneurship on the part

106  Tomasz Kusio of public administration units is the construction of technical infrastructure used in the activity of enterprises. Social infrastructure and technical infrastructure do not only constitute the structural capital of a given region. They are also related to the development capital of the region. The development of investments in the region is the development of social infrastructure, but also education and science. Infrastructure development is a significant if not a key development attribute of the region. As the research shows, communities in Poland are in particular oriented towards the implementation of activities of an infrastructural nature (Pondel, 2017). What is more, in the opinion of respondents of community self-governments, it is the implementation of activities of an infrastructural nature that is considered to be a determinant of the success of a community (three-fourths of communes indicated such an answer). Then, and this is very interesting information, communes considered the value of financial resources obtained from the European Union as a marker of success. At the same time, it is worth mentioning that the funds obtained from the EU were used by commune self-governments to implement activities of an infrastructural nature. Activities of an infrastructural nature should be regarded as key in terms of commune self-government activity plans. To increase the competitiveness of rural areas, changes in the community management model are necessary (Pondel, 2017). There are many directions of stimulating the development of municipalities, with limited financial possibilities of local government units, especially smaller ones. The majority of municipalities allocate their budgets to the implementation of their own activities. The basic objectives they pursue require an appropriate budget and even, in this case, the issue of allocating a certain part of the budget to development activities is a challenge for municipalities. Therefore, in order to enable further, more and more dynamic development activities in the area of the potential of local administration units, it is necessary to engage the resources of various capitals held by the municipality. Support for the infrastructural development of the region is provided by social capital, thanks to which partnership initiatives such as public–private partnerships or inter-sectoral partnerships are created. Moreover, appropriate planning and policies are also necessary. The preparation of local development strategies shall be part of the local development planning process, which shall consist of the following stages (Brandenburg, 2011):

1. An assessment of the existing situation; 2. Preparation a development strategy; 3. Formulation of development projects; 4. Selection and detailed definition of tasks; 5. Evaluation of development effects or strategy implementation.

In EU terminology, the term “regional policy” is used interchangeably with structural or cohesion policy. The main objective of regional policy is to equalise the level of development of less developed areas, and in particular areas with a geographically less favourable location.

Regional innovation in Małopolska  107

Determinants of regional innovation The creation and development of local entrepreneurship are influenced not only by regulations but also by the entrepreneurial behaviour and attitudes of people who form the institutional framework in the form of local government organisations and non-profit NGOs (Borowiecki and Makieła, 2019). On the other hand, if we refer to persons influencing the creation of regulations at the local level, their characteristics and entrepreneurial attitudes have an even greater impact on the creation of the entrepreneurial infrastructure of the region. Therefore, the impact of human potential on the development of regional innovation can be directly attributed. The development of innovativeness in relation to the region is an extremely important issue due to the observed relations between the development of innovativeness and geographical proximity of interdisciplinary cooperating enterprises, public administration units, research and development units and non-governmental organisations. The proximity of the location, in territorial terms, favours the exchange of resources being in possession of the mentioned institutions. While discussing the issues of regional innovativeness, there is a natural reference to perceiving the region as a subject of consideration. What is more, when discussing innovation from the regional perspective, one should take into account the perception of the region in the administrative context. For this reason, innovativeness in the territorial context is mentioned when the innovativeness of a country, voivodeship, commune or poviat is discussed. Very often, however, especially considering the cooperation of business, social or public entities in an interdisciplinary dimension, the notion of a region does not fully coincide with the definition in the administrative context. Therefore, it is necessary, in particular, to take into account the location proximity factor as a key factor in discussing the development of innovation. Strengthening the competitive position of the regions is connected, inter alia, with the development of an innovative environment, mechanisms, attitudes and innovation strategies. Apart from assigning attributes of innovation to products or services, as well as assigning attributes of innovation to ways of their creation or sale (process, organisational, marketing), innovation is also treated as a feature that refers to enterprises or economies. For this reason, the following levels are indicated, among others: Individual, organisational and macroeconomic (Kłosa and Widera, 2017). In the above context, innovativeness may be understood and perceived in the context of the potential of an individual, organisation or more broadly, e.g. a given territory – on a macroeconomic scale. As a feature of innovation, in this context, it may mean the ability to create innovative solutions for their implementation, but also their absorption, as innovative solutions do not necessarily have to come from a given unit or organisation. What also influences the definition of innovation is the region. The innovativeness of a given solution may not result from the fact that it is new on a global scale, but from the novelty on a regional scale. Products or services that have long been known in one region are at the same time something completely new in another region. In the era of

108  Tomasz Kusio globalisation, this regional context of innovation is less important, although it is still relevant. Innovation is measured and popular innovation indicators in relation to the assessment of innovation at the macroeconomic level, i.e. the measurement of the economy of the country, include: 1. The relation of budgetary outlays and outlays of enterprises on R&D activity to GDP; 2. Share of enterprises conducting innovative activity in the total number of industrial enterprises; 3. Share of new and modernised products sold in the production of products sold in the industry; 4. Number of inventions filed for patent protection. The above indicators for measuring innovation at the macroeconomic level can be considered very general in terms of measuring innovation compared to the European Innovation Scoreboard (EIS, 2019; RIS, 2019), but nevertheless valuable in terms of measuring the innovation of the economy. The EIS indicators which are used to measure innovation in the community are a much more advanced and comprehensive instrument to measure innovation. The European Innovation Scoreboard itself is one of the most recognisable indicators for innovation, and the Regional Innovation Scoreboard has been created in regional terms. The criteria that are taken into account in the preparation of the above rankings included in 2019 such main areas as framework conditions, investments, innovation activities, the impact of employment and sales. Within the above general aggregated groups of indicators, ten groups of indicators were distinguished, which are presented in Table 6.1. The European Innovation Index makes reference to measuring innovation in both countries and regions, although not all individual indicators can be measured due to a lack of data. The index is an advanced tool in which data concerning the current situation are used, but also data whose occurrence may influence the creation of innovation. The issue of regional innovation is currently being addressed in the context of smart regional specialisations (Borowiecki and Kusio, 2016). The recognition of the importance of the regional context in building innovation is reflected in the concept of smart specialisation. An increase in competitiveness of companies in the SME sector is a result of both the SME’s own activities and the business environment. In the creation of institutional frameworks for the establishment of regional entrepreneurship, it is important for managers responsible for the process of their creation to have such features and skills as proper search for appropriate resources, combining them in the context of entities of a given area, so that social values could be created as a result. Regional decision-makers responsible for the creation of regional development strategies should know about the expected social values that should result from an entrepreneurial activity carried out in a given territory through the knowledge of the nearest local environment. In order to achieve higher efficiency in the implementation

Regional innovation in Małopolska  109 Table 6.1 A comparison of the indicators included in the European Innovation Scoreboard and the Regional Innovation Scoreboard EIS 2019 Framework conditions Human Doctorate graduates per 1,000 population aged resources 25-–34 Percentage of population aged 25–34 having completed tertiary education Lifelong learning, the share of population aged 25–64 enrolled in education or training aimed at improving knowledge, skills and competences Attractive International scientific co-publications per million research population Scientific publications among the top 10% mostsystems cited publications worldwide as percentage of total scientific publications of the country Foreign doctorate students as percentage of all doctorate students InnovationBroadband penetration (share of enterprises with friendly a maximum contracted download speed of environment the fastest fixed internet connection of at least 100 Mb/s) Opportunity-driven entrepreneurship Investments Finance and R&D expenditure in the public sector as percentage support of GDP Venture capital expenditure as percentage of GDP Firm R&D expenditure in the business sector as investments percentage of GDP Non-R&D innovation expenditures as percentage of total turnover Enterprises providing training to develop or upgrade ICT skills of their personnel Innovation Activities Innovators SMEs introducing product or process innovations as percentage of SMEs SMEs introducing marketing or organisational innovations as percentage of SMEs SMEs innovating in-house as percentage of SMEs Linkages Innovative SMEs collaborating with others as percentage of SMEs Public-private co-publications per million population Share of private co-funding of public R&D expenditures Intellectual PCT patent applications per billion GDP (in assets Purchasing Power Standards [PPS]) Trademark applications per billion GDP (in PPS)

RIS 2019 No regional data Smaller age group 30–34 Identical Identical Identical No regional data No regional data

No regional data Identical No regional data Identical For SMEs only No regional data Identical Identical Identical Identical Identical No regional data Identical European trademark applications (Continued )

110  Tomasz Kusio Table 6.1  (Continued) A comparison of the indicators included in the European Innovation Scoreboard and the Regional Innovation Scoreboard

Impacts Employment impacts

Sales impacts

EIS 2019

RIS 2019

Individual design applications per billion GDP (in PPS)

Design applications

Employment in knowledge-intensive activities (manufacturing and services) as percentage of total employment

Employment in medium-high and high-tech manufacturing and knowledgeintensive services No regional data

Employment in fast-growing firms of innovative sectors Medium and high-tech product exports as percentage of total product exports Knowledge-intensive services exports as percentage of total service exports Sales of new-to-market and new-to-firm innovations as percentage of total turnover

No regional data No regional data For SMEs only

Source: European Innovation Scoreboard.

of public tasks, initiatives consisting of the cooperation of administration with the private sector are implemented (Augustyńska, 2007). Such cooperation also allows increasing the level of accessibility to resources, e.g. financial, as well as developing concepts and implementing initiatives of a social innovation nature. Multilateral interactions between the enterprise and other actors of the environment affect the actual innovation potential, first of all in the research and development sector, which gains particular importance in the context and perspective of open innovation (Żołnierski, 2017). From the point of view of supporting scientific cooperation, but also entrepreneurial cooperation (Czaplicka-Kotas et al., 2017), organisational structures such as research networks, scientific and industrial consortia, regional and industry clusters are particularly important. They should support effective dialogue between the academic and business environment. Broad multidisciplinary cooperation bringing together many scientific entities of different specialisations and entrepreneurs representing the entire value chain remains underestimated. As Łącka (2012) points out, there is a correlation between the level of innovativeness of the economy and business entities and the level of development of links between the R&D sector centres and enterprises, as well as the effectiveness of the technology transfer system and knowledge commercialisation. The interrelationships that refer to the region “Porter” are presented graphically in Figure 6.1, indicating the benefits and competitive advantages in the form of the so-called “Diamonds.”

Regional innovation in Małopolska  111 Company strategies and local competition Demand from local customers

Production factors Related and supporting sectors

Figure 6.1  Sources of location advantage model (diamond). Source: Porter M.E. (2008), On Competition, Harvard Business School Publishing, Boston, pp. 227–228.

They concern the advantages and benefits that arise from the location. It is noteworthy that sources alone, including factors of production, company strategies, support sectors and local customer demand are not enough. This specific potential still needs cooperation and exchange, which indicates an important role of social capital. It is reflected in the innovation index – “linkages.” The links between science and business are of particular importance when it comes to the impact on the development of innovation (Kusio, 2019). From the point of view of the determinants of the development of innovation, which are covered by the “production factors” area, there is a correlation with the tendency to strengthen the infrastructure, which could be seen in the results of the survey of municipalities when discussing the potential of the region. The production infrastructure of enterprises on the business side and the technical and social infrastructure of public administration units on the other side are important factors from the point of view of business and public administration. This dependence is confirmed by the formula of public–private partnerships. It is also worth adding, from the point of view of determining the parties of public–private partnerships, that it is on the side of the public partner that a number of entities are mentioned, while the other party in the partnership is the representation of the business sector, the private sector. The above indications, which characterise the public–private partnership, are defined by the partnership guidelines. It may be that a larger number of partners join the partnership agreement; however, the formula of created partnerships always has a public–private dimension. The roles of a manager of enterprises and public administration units are becoming similar. The roles of the current manager, which are considered necessary in the modern management of public organisations, are (Nowodziński, 2010): 1. Consensus architect – is responsible for listening to different interest groups and ensuring an adequate decision-making process; 2. Populariser of local affairs – is responsible for informing the local community about its important aspects; 3. Pattern of ethical behaviour – is a personal example in ethical behaviour and service to the community;

112  Tomasz Kusio 4. Co-contractor of local authority – shares power with others, builds a strong network of connections with the local community. What is particularly important in terms of the desired characteristics of a manager is knowledge of the local socio-economic situation. Moreover, the ability to identify local needs should be accompanied by a vision of development, i.e. all those activities for local development that are feasible, not only within the framework of self-execution but also through the use of tools such as public–private partnerships.

Clusters as a network dimension of a regional economy When discussing regional innovation, attention should be paid to the positive effect that proximity creates for entities located in one region. This is due to (Grycuk, 2017): 1. Intensity of cooperation with the environment; 2. Availability of external sources of knowledge, e.g. obtained from research institutions, suppliers, customers, competitors; 3. Frequency of planned and unplanned interactions with a diverse group of partners; 4. Gaining information about changing customer needs, new technologies, products, markets, business models and management tools. According to Porter (2008), demanding customers, as well as strong competitors in the region, exert pressure on entrepreneurs to improve their market offer, improve quality, control costs and streamline processes. Thus, companies are better prepared to compete in other markets, including foreign markets. Benefiting from the existence and functioning of the competition seems to be an interesting and surprising statement, however, a similarly positive result of the region’s activity confirms the great developmental importance of companies operating in the cluster. Economic and social entities have their own resources, to which access is unlimited, but also have access to the resources of other organisations they cooperate with. This type of access to resources should be characterised as limited. Innovation is considered a key determinant in the creation, multiplication and conversion of resources. According to the company’s resource theory, key resources should be valuable, non-imitated and non-replaceable (Lis and Lis, 2019). The higher the intensity of cooperation between the actors in the environment, the higher is also the level of exchange of resources such as knowledge. Open innovation is a reflection of access to the resources of different organisations and at the same time the exchange of those resources. Geographical proximity favours the exchange of resources between organisations, concentrated in a given region. At the same time, what also determines the acceleration of the processes of exchange and renewal of resources possessed by the organisations is the kinship or branch

Regional innovation in Małopolska  113 complementarity of entities managing in a given region. However, a concentration in close geographic proximity is not itself a sufficient instrument affecting development processes. In order to achieve the effect of synergy and lead to the renewal of resources of individual organisations, mutual relations are needed. The higher the level of intensity of cooperation between the organisation and the environment, i.e. the more intensive the relations are, the greater the possibilities for resource exchange. Long-term inter-organisational interactions create bonds (Kusio, 2019). In turn, the very establishment of inter-organisational links can be one-off or long-lasting. An inter-organisational network can be considered a set of actors connected by a set of ties (Manczak, 2017). Actors form an arrangement of two or more organisations involved in long-term cooperation with varying degrees of intensity, permanence, coherence and openness. The purpose of networking is long-term and forward-looking, although the very decisions to create a network of partnerships may be the result of an urgent, deliberate need. The dissolution of a partnership network may be the result of an urgent need, while the very effect of an existing network may have a long-term functioning dimension. The types of connections occurring in networks are presented in Figure 6.2. Cooperation between sectoral stakeholders may be more or less formal. For specific initiatives that are both profit-oriented and socially beneficial, formalisation is essential as it involves the financial commitment of each cooperation partner. Project initiatives are the result of cooperation between partners in a network and affect the establishment of relationships between partners. Clusters are a specific type of network that is particularly relevant to the region. Porter (2001) considered geographical clusters to be clusters of interconnected enterprises, suppliers, entities providing services to enterprises in cooperation and industry-related relations with them, as well as cooperating institutions, which include scientific institutions. The researcher is considered to be a pioneer of the concept of clusters, which has subsequently gained significant scientific interest and achievements. The concept of clusters is still current and important, and what is closely related to this idea at the moment is open innovation, which is scientifically justified in the exchange of knowledge and information.

Actor bonds

Resources ties

Activity links

Figure 6.2  Types of network links. Source: Hakansson H., Snekota I. (2006), “No business is an island: the network concept of business strategy,” Scandinavian Journal of Management, Vol. 22, pp. 256–270.

114  Tomasz Kusio Clusters can positively influence the development of the local economy, if only due to the fact that as a result of their functioning jobs can be created and innovativeness is improved, which in turn entails the need for new knowledge and the intensification of relations with local stakeholders, which may include representatives of public administration, third sector organisations and social economy (Gryczak, 2017). Porter (2003) distinguished three types of clusters : 1. Local cluster; 2. Resource-dependent cluster; 3. Export cluster. A local cluster serves the local market, i.e. the market covered by the activities of the cluster and the area of concentration of the organisations that make up the cluster. He has assumed that in a local cluster competition with other regions is limited. The geographical concentration of organisations in a resource-dependent cluster results from the location of resources, such as natural resources. Cluster companies’ competition has both a national and international dimension, which is conditioned (Frankowska, 2019) by basing activities on raw material, which, for example, is extracted, processed and offered to supra-local markets. An export cluster is not conditioned by raw materials, and the cluster’s offer is not directed to the local market. The formation of a cluster results from a cluster, a different kind of resources, which can be e.g. labour force or scientific and research facilities. The cluster’s offer goes out to supra-local markets, including international markets, which refers to the name of the cluster. Clusters are a specific type of inter-organisational links that are subject to evolution, and one of the directions of cluster development is to undertake cluster initiatives. Cluster initiatives serve as a platform for joint activities of entities that are concentrated in these platforms (Lis and Lis, 2019). Cluster initiatives can be considered an instrument of cluster development, as well as a factor determining the growth of competitiveness of the entities that make up the cluster. Although cluster initiatives do not have to include all entities that co-create the cluster, and not all the entities that follow, it seems that the benefits of cluster initiatives can apply to the whole cluster, as all efforts to increase the growth and competitiveness of the cluster in the region, which involve companies, authorities and the scientific community of the region, are considered a cluster initiative. The institutionalisation of cluster initiatives may involve, among other things, setting up a new organisation for the duration of the project. This initiative may, as the enterprise develops and succeeds, be extended or may end. Its success, apart from the quality of the consortium and the possibility of gaining customers, may also be determined by the innovative dynamics of the development of a given product or service, which are the subject of the initiative. Studies and research recognise the functioning of the cluster as an inter-organisational network (Frankowska, 2019), where among organisational units there is more cooperation, although sometimes there is also competition, which indicates the occurrence of so-called “coopetition.”

Regional innovation in Małopolska  115

Małopolska as an example of an innovative region Małopolska is considered to be one of the historical areas of Poland, covering the south-eastern part of the country. Currently, the term Małopolska in geographical terms refers mainly to the administrative area of Małopolska province. The Lesser Poland Voivodeship (Małopolska), further on, covers an area of over 15,000 square kilometres, with approximately 3.4 million inhabitants. Although Małopolska is one of the country’s smaller regions in terms of area, it is in fourth place in terms of population. Thus, the population density in the province is the second largest in the country. There are 62 towns in Małopolskie Voivodeship, including three with poviat rights. Urban areas are inhabited by 48.65% of the population, and rural areas by 51.35% (Wikipedia, 2020). As far as potential is concerned, the region of Lesser Poland Voivodeship is in third place in the country in terms of the number of inventions submitted and patents granted. However, already in terms of per 1 million inhabitants, it is the leading place in the country. There are about 600 entities conducting research and development activities in the voivodeship, which means third place in the country. Moreover, there are 15 cluster initiatives in the region, including Life Science Kraków and the Sustainable Infrastructure Cluster. Apart from clusters, there are also industrial and technology parks in the region. As far as the business environment is concerned, the Kraków centre with its 238 centres is the second region in the country supporting business services. The Małopolska region should also be considered as an employment leader when it comes to those working in the sphere of BPO services, i.e. business process outsourcing (https:///www​.malopolska​.pl​/ biznes, 2020). There are 29 higher education institutions in the Małopolska region, with over 150,000 students. More than 17% of the region’s inhabitants pursue doctoral studies, which means 6,000 people and the second result of the voivodeship in the country. Thanks to a large number of universities operating in the region, as well as technology transfer centres, or in a broader context of knowledge transfer units, Małopolska has great potential for the commercialisation of scientific research results. Many pro-development initiatives are carried out in the voivodeship on the basis of own resources, regional funds and also external funds of EU origin that are still used. As far as human potential in the field of R&D activity is concerned, the number of jobs is estimated at 17,000, of which over 60% concerns employment in the enterprise sector. The Lesser Poland Voivodeship, as has been indicated previously, is inhabited by 3.4 million people and the degree of urbanisation of the region is 72.5 compared to the EU average of 76. This means that the voivodeship should be considered as an urbanised region with a high level of population density. At the same time, it is also a poor region in relation to both Poland and, above all, Europe, which is presented in Table 6.2. Małopolska is recognised as a “moderate innovator” in the Regional Innovation Ranking. Among the majority of indicators determining the level of innovativeness, most of the voivodeship is lower than the national average Figure 6.3.

116  Tomasz Kusio Table 6.2 Data highlighting possible structural differences PL21 Share of employment in: Agriculture and mining (A–B) Manufacturing (C) Utilities and construction (D–F) Services (G–N) Public administration (O–U) Average employed persons per enterprise (firm size), 2015–2016 GDP per capita (PPS), 2017 GDP per capita growth (PPS), 2013–2017 Population density, 2017 Urbanisation, 2018 Population size, 2018 (000s)

11.6 18.7 11.4 52.4 5.0 4.0

PL

EU28 12.0 20.1 9.6 51.2 6.7 4.4

19,100 4.79

20,900 3.96

223 72.5 3,350

124 65.0 37,980

4.6 15.4 8.2 64.1 7.0 5.5 30,000 2.86 118 76.0 512,380

Source: Regional Innovation Scoreboard 2019.

Figure 6.3  The relative strengths of Małopolska compared to Poland and the EU. Source: Regional Innovation Scoreboard.

In the case of “Design application,” “Tertiary education”, “R&D expenditures business sector” and “Non-R&D innovation,” the level of Małopolska’s innovativeness is better than the EU average, while in most cases the indicators are lower in relation to the national average; where it was possible to collect relevant comparative data, the Małopolska region ranked higher. Thus, the Małopolska regional innovation indicator in 2019 performs better than

Regional innovation in Małopolska  117 Table 6.3 Normalised scores per indicator and relative results compared to Poland and the EU Data Tertiary education Lifelong learning International scientific co-publications Most-cited scientific publications R&D expenditures public sector R&D expenditures business sector Non-R&D innovation expenditures Product/process innovations Marketing/org. innovations SMEs innovating in-house Innovative SMEs collaborating Public-private co-publications PCT patent applications Trademark applications Design applications Employment MHT manuf./KIS services Sales new-to-market/firm innovations Average score Country EIS-RIS correction factor Regional Innovation Index 2019 RH 2019 (same year) RII 2019 (cf. to EU 2011) Regional Innovation Index 2011 RII 2011 (same year) RII – change between 2011 and 2019

49.0 5.8 667 0.051 0.50 1.66 ± ± ± ± ± 9.2 2.22 6.30 7.17 12.8 ± ---------

Normalised score Relative to 0.623 0.157 0.461 0.247 0.474 0.665 0.669 0.223 0.123 0.200 0.205 0.193 0.208 0.445 0.635 0.399 0.297 0.366 0.930 0.341 --0.263 -16.7

PL

EU

111 153 143 104 130 170 ± ± ± ± ± 131 167 134 116 98 ± ---124.9 --106.4 --

136 50 80 46 83 113 ± ± ± ± ± 47 49 100 130 80 ± ---70.1 73.4 -56.7 --

Source: Regional Innovation Scoreboard 2019.

that of the whole country at 124.9, while worse than the EU average 709 – see Table 6.3. Innovation in the territorial context is gaining importance due to the importance of direct relations that influence the dynamics of building social capital. Regional resources, whose existence is conducive to the dynamics of social capital growth, are usually divided into tangible and intangible in a great simplification, while in a broader context they can be categorised as human, social, intellectual, structural and developmental potential. Taking into account the example of the Małopolska region and its innovative characteristics, it can be considered that a high level of human capital affects the level of the region’s innovativeness on many levels, however, the infrastructural potential, which in Małopolska still differs from the EU average, does not allow the full use of this capital. Therefore, with regard to the assessment of territorial innovation and determinants of the growth of innovation, it is not only the individual elements that should be considered important but also the degree of use of these elements. For this reason, the increase in the level

118  Tomasz Kusio of regional innovation is influenced not only by the level of potential, categorised in different ways, but also by the ability to exploit it. Although the Małopolska region, in the context of human potential, should be ranked high in the innovative dimension, the lack of possibilities of its full use due to the insufficient level of infrastructural and material capital causes the dynamics of Małopolska’s innovation development to still not be satisfactory. While Małopolska can be regarded as a leader when it comes to national innovativeness, this problem still seems to be difficult to solve when it comes to innovative innovativeness. The example of Małopolska as a moderately innovative region on a European scale gives a certain view of the needs in creating regional policy in Europe. This work does not give reference to the global scale or to other examples, either European or global. There are only estimates at a national level of the approximate time needed to achieve a level of citizens’ wealth corresponding to the level and wealth at the European level. However, there is still a lack of accurate studies of the drivers of innovation processes at the national level. It appears, taking into account the national example, that the growth of territorial innovation dynamics can be influenced by factors that increase the level of human resource use. However, the extent to which this will be a question of the level of infrastructure potential is difficult to answer without appropriate studies.

Conclusions and recommendations Innovation in a regional context, which is naturally reflected in the positive impact of geographical proximity, determines the growth of the innovation dynamics of the area-based actors. For innovation processes to be effective, social capital is still needed, in particular interactions and a tendency to establish, maintain and build relationships. Clusters are a specific kind of inter-organisational network and absolutely such a place where the innovation dynamics are high. The emergence of clusters has a diverse background, including production and consumption mainly within the cluster, but also their emergence and development are associated with the presence of specific resources in a given area or the legitimacy of their functioning is based on uniformity or complementarity in making offers to clients outside the cluster. Undoubtedly, a cluster can be referred to as a territorial grouping of entities, whose functioning is regulated by the logic of complementarity due to what is being processed or offered. Complementary unification at entry and exit is what constitutes the logic of cluster functioning. In turn, the subject matter of geographically close location favours complementarity and is a factor for increasing innovation in the regional context. The region of the Małopolskie Voivodeship should be considered one of the leaders in terms of the level of territorial innovation in Poland. According to the level of some innovation indicators, Małopolska even occupies a leading position in the country. Human capital is of great importance in the context of the innovative position of Małopolskie Voivodeship. The region has a large number of universities and many business support centres. This is

Regional innovation in Małopolska  119 reflected in the number of innovative initiatives or patent activity. The human capital of Małopolskie Voivodeship has an impact on the overall innovative image of the voivodeship. Even taking into account the European context, Małopolska has a strong innovative position in terms of human capital. The situation will be slightly different in terms of infrastructure potential and the level of income generated in this case, the average for the whole country is definitely different from the EU average, and thus also Małopolska, whose position is similar to other regions in the country. In the national ranking, Małopolska, in the context of generated revenues from innovative products and services, is also in the lead, as it takes third place in terms of the number of entities having scientific and research equipment, classified as fixed assets (168), and second place in the country in terms of the share of revenues from the sale of innovative products in total sales revenues of industrial enterprises (12.1%). One of the factors that could be included in the so-called innovative climate is the promotion of innovation in the form of organised events such as brokerage events, regional innovation fairs and other types of events.

Discussion Regional innovation, although not a completely new topic, is still an extremely important issue from the point of view of its impact on innovation at the national level, but also from the point of view of the European Union. Regional innovation can be recognised as a feature of a given territorial area – region – under various criteria for defining innovation. In the national context, top-level regionalisation means voivodeships. The potential of a region, including a voivodeship, refers to the inhabitants and institutions that function within a given territorial area. The development of a region is closely related to the development of its potential, the resources of which can be defined by tangible and intangible attributes. The local authorities point to the great importance of infrastructure, as it is precisely the activities of an infrastructural nature that constitute the basic development objectives in the context of the region, as recorded in strategic documents. However, it is people who create institutions and it is people who are the recipients of services offered through infrastructure. Improving the service offer serves to improve the quality of goods and services produced. Many European countries need support because, in the light of research on their level of development, it has turned out that they are at a disadvantage because of their less favourable geographical location or low population density (Adamiec, 2017). Improvement in the level of regional development is possible thanks to the development of innovation in a given area. For this reason, it is important to pay attention to factors influencing the regional development of innovation. Taking up the subject of possibilities of influencing the development of regional innovativeness is connected with the assessment of regional innovativeness, factors taken into account in the process of assessment of a given region in the context of its level of innovativeness. The higher the level of innovation indicators in the

120  Tomasz Kusio regional context, the greater importance of instruments determining the development of these indicators. The determinants of regional innovation can therefore be looked at through the lens of indicators for measuring innovation, where, in the EU context, aggregated criteria include, inter alia, human resources in a given region or country, systems for the dissemination of research results, an innovation-friendly environment, business investments, financial support, innovators, links and relationships, as well as intellectual resources, sales and employment indicators. The above list of criteria is the result of an attempt to include in the assessment of innovation not only what constitutes a direct image of it, but also factors that influence the development of this innovation. The set of criteria that serves to assess innovation in a national context cannot always be the same as the set of criteria in a regional context. The shaping of innovation at the macroeconomic level can also be studied from the point of view of bottom-up activities – by institutions and people whose innovativeness is a part of regional innovation, as well as from the point of view of top-down activities that aim at facilitating the activity of people and institutions in improving their competitiveness. The activities of public authorities cover not only the financial context, e.g. in terms of offering exemptions or tax relief, but also the increasingly widespread organisational context in the EU and in the country. Determining the increase in the social capital of people and institutions within the region takes on the last of the relational activities in which public institutions themselves participate. In addition to activities promoting interdisciplinary cooperation, public–private partnerships or cross-sectoral partnerships are among the interesting initiatives that have an impact on increasing cooperation between organisations. They combine activities enhancing innovation in the form of partnerships with additional participation in co-financing or in-kind contribution. Apart from the participation of enterprises and public administration units, cross-sectoral partnerships include, inter alia, social economy entities.

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122  Tomasz Kusio Regional Innovation Scoreboard 2019: Methodology Report [online]. Available at: https​:/​/ ec​​.euro​​pa​.eu​​/grow​​th​/si​​tes​/g​​rowth​​/file​​s​​/ris​​2019.​​pdf (Accessed: 27.05.2020). Rostek K., Zając R. (2018), ‘Model grafowy komunikacji jako narzędzie tworzenia wartości w organizacji’, in: Lipińska A., Klimas P. (ed.), Biznes i zarządzanie: Kierunki badań innowacyjności, Kraków: Wydawnictwo UJ, pp. 21–33. Skawińska E., Sobolewska-Poniedziałek E., Zalewski R.I. (2014), ‘Znaczenie innowacji społecznych w kształtowaniu wizerunku regionu jako źródła przewagi konkurencyjnej’, Przegląd Organizacji, 6, pp. 6–13. Spik A., Mijal M. (2018), ‘Relationships with Stakeholders in International Research Projects in Poland’, Problemy Zarządzania, Management Issues, 16(4/77), pp. 63–84. Wikipedia [online] Available at: https​:/​/pl​​.wiki​​pedia​​.org/​​wiki/​​Ma​%C5​​%8​2op​​olska​ (Accessed: 27.05.2020). Żołnierski A. (2017), ‘Social Capital in Knowledge Transfer’, Ekonomika i organizacja przedsiębiorstwa, 12(814), pp. 151–168.

7

Transformation in the management of municipal space in the age of Industrial Revolution 4.0 From building infrastructure to creating a friendly business space Jerzy Rosiński

Introduction The purpose of this chapter is to present a four-factor business model for SMEs, which has been arrived at in the course of the author’s own research. In the author’s opinion, the proposed business model is one of the options for creating municipal space in smart cities. It is a space understood not only and not so much as an area saturated with advanced technologies, but also as an inhabitant-friendly environment using the services offered in the world of Industrial Revolution 4.0. Scientific reflection on the changes brought about by the fourth industrial revolution often focuses on the technological aspects of the ICT industry. However, the development dynamics (followed in this chapter using the example of smart cities) indicate that after the technology saturation phase, there comes a time to reflect on how users read and interact with the technical infrastructure. This reflection, which concerns the relationship between the user and technology, is in line with searching for a business model that would be appropriate for the current development phase of SMEs active within smart cities. Because business models are highly oriented towards a given industry, the article focuses on the proposals for the leisure industry. The main reasons for conducting the research were: ·· ··

Searching for a model which would be useful to SMEs, making these often small organisations independent of investments in building/leasing expensive infrastructure. Finding a business model that will result in the inclusion of a given SME in a subjective map of the city by smart city users.

The conducted analyses sought to obtain a clear and relatively simple model to help entrepreneurs operating in the leisure industry. The model was intended to allow businesses to be built so that the business activity of a given entity is included in the subjective cognitive maps of consumers, without the entrepreneur having to rely on costly ICT solutions. DOI:  10.4324/9781003184065-7

124  Jerzy Rosiński

Theoretical part Transformations of the fourth industrial revolution As noted by Rozkwitalska and Slavik (2017, pp. 185–206) automation and digitisation related to Industry 4.0 (also referred to as the Industrial Internet of Things [IIoT]), together with macroeconomic factors, will generate numerous opportunities, chances and challenges not only in the manufacturing industry but also in other industries (Müller and Buliga, 2019). Changes will be required in, among others, business models, models of employment, expected skills and new challenges in terms of results. Not only will business models change, but so will social relationships (Kagermann et al., 2013, p. 20). A new work environment encompassing integrated robot and cobot activities will put employees in new roles where current experience and expertise will turn out to be obsolete (Rozkwitalska and Slavik, 2017, p. 197). This means that the changes associated with the fourth industrial revolution go beyond the ICT industry and new material technologies, and they impact not only areas related to robotics, automation of production or information technology. It seems therefore that the transformation in these areas has an impact on other sectors of the economy as well as the style of living of workers and consumers. The development of a smart city is similar to the development of the whole economy. After all, the development of smart cities integrates digital, human and physical systems in an urbanised environment (Caird and Hallett, 2019, pp. 188–209). The rapid urbanisation of urban regions is putting pressure in terms of changes not only on infrastructure or ICT systems but also on people, services and the living environment. It therefore calls for innovative, sustainable solutions to the challenges of urban development (Caird and Hallett, 2019, pp. 188–209). Smart city – two phases of emphasis in defining the concept The concept of a smart city is currently employed by a wide range of groups, such as self-government officials, civil society organisations, private companies and academia (Falconer and Mitchell, 2012). It is also used to relate to a multilateral range of topics, such as the aggregation of smart urban projects, the improvement of citizens’ lives, mobility, the economy and the environment (Gil-Garcia et al., 2016). With such a wide range of topics, it is worth returning to the original understanding of the concept, since the wording itself, although it has become a popular buzzword, is not a new term. In the area of urban planning, the term “smart” appeared in 1990 in the United States in the context of the “smart growth” of traffic in urban agglomerations. It was linked to the theory of a compact city as a solution to the sprawl of urban agglomerations (Wey and Hsu, 2014, pp. 164–174). It was simply stated that: “Cities are working to respond to their changing reality and to become smarter” (Bounazef and Crutzen, 2019, p. 2). Sometimes the emergence of the term “smart city” is associated (Hall, 2000) with a period that came several years earlier (Anthopoulos and Vakali, 2012, pp. 178–189): The late

The management of municipal space  125 1980s. Other authors (Dameri and Cocchia, 2013, pp. 1–8; Susantia et al., 2016, pp. 194–201) name 1994 as the beginning of the use of the term “smart city.” At the same time, it is universally agreed upon that an increase in the number of publications concerning smart cities was recorded after 2010, when the administration of the European Union started to use the term “smart” when qualifying sustainable projects (Susantia et al., 2016, pp. 194–201). As regards the definition review, it is possible to risk stating that two phases can be distinguished in the way “smart city” has been defined. In the first phase of smart city development, the focus remained on the technology and infrastructure side of the project, highlighting the capitalisation of ICT achievements in cities (Anthopoulos and Vakali, 2012, p. 178). Thus, different uses of technology were sought in the definitions: From simple delivery of e-services to complex data collection and support for decisions in municipal areas (Anthopoulos and Vakali, 2012, p. 178). Interestingly, this was the case even though one of the most well-known definitions by Hall (2000) did not mention ICT, but infrastructure. However, as technology evolved, after 2005 the term “smart city” was being used by ICT companies to indicate that their systems were integrated with existing solutions in the city structure (Deakin, 2014, pp. 1–16; Li et al., 2019, pp. 730–743). As it has already been stated that the increase in publication volumes is linked to EU decisions, then one should begin by reviewing the definitions that are characteristic of the first phase of understanding smart cities by looking at descriptions that are relevant to the EU institutions. The European Parliament defines “smart city” as: “a city seeking to address public issues via ICT-based solutions on the basis of a multi-stakeholder, municipally based partnership” (Lam and Wong, 2020, pp. 13–37). Another definition (Mosannenzade and Vettorato, 2014; Anthopoulos and Vakali, 2012, pp. 178–189) often referred to is R.E. Hall’s understanding of smart cities. In his (Hall, 2000) description, [a] city that monitors and integrates conditions of all of its critical infrastructures, including roads, bridges, tunnels, rail/subways, airports, seaports, communications, water, power, even major buildings, can better optimize its resources, plan its preventive maintenance activities, and monitor security aspects while maximizing services to its citizens. These two definitions will form part of the first phase of the smart city understanding – focused on technological and infrastructure aspects and the necessary institutional support for building a new municipal substance. In the next phase of smart city development, the focus has moved away from technological, infrastructure and institutional themes. After a time of involvement in the activities carried out by consortia to, among other things, reduce energy consumption and optimise transport (Bosch et al., 2017, p. 21), more attention has been paid to how people read the “smartness” of their city (Puron-Cid et al., 2015, pp. iv–vii; Vanolo, 2016, pp. 26–36). This stage is described as the time when cities have emerged from the early “embryonic phase” of their development, focused on ICT and infrastructure (Puron-Cid et al., 2015, p 2; Bosch et al., 2017, p. 7;

126  Jerzy Rosiński Nasir et al., 2019, pp. 1181–1187). Initially, in technologically oriented smart cities, smart citizens began to be treated as another indicator (Vanolo, 2016). Today, an important and fast-growing trend of reflection seems to be focusing on how people in the city use technology or read the situation they are in (Calzada, 2020). It is precisely this reading and the activities of citizens on which the further development of a smart city depends (Vanolo, 2016). When it comes to how citizens perceive space in a smart city, is not only about smart citizens as users who read the shape of a city (Bounazef and Crutzen, 2019), but also about ways to read the reality of a city, described by the terms “user-machine interface” and “user experience” (Filomena et al., 2019, pp. 84–94). People are also drawn attention to as part of the smart city environment, describing the social environment as a “smart community” (Vinod Kumar, 2020, pp. 1–53). There are examples of when people do not want further technology solutions if they read them as a restriction of their freedom (Vanolo, 2016). There is also talk about the need for cooperation between local authorities and city inhabitants, and the adequacy of the technology used to meet their needs/expectations (Puron-Cid et al., 2015, p. v). As with the revision of the definitions of phase one, let us start with the definitions created by EU institutions. In 2014, the European Parliament defined “smart city” as a place where traditional networks of connections and services are carried out by e-customers using digital and telecommunication technologies to the benefit of residents and business (Papa et al., 2015, pp. 19–50). This definition was accompanied by the following comment: We believe a city to be smart when investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic growth and a high quality of life, with a wise management of natural resources, through participatory governance. The existing theoretical models provide us with a change in understanding of the current development of smart cities. We are dealing with multi-phase models of smart city development (Zygiaris, 2013, pp. 217–231; Caird and Hallett, 2019, pp. 188–209). In these cases, one can clearly delimit the phases related to infrastructure construction, technology and institutional support (in the five-step model cited, these would be stages one to four) and to the optimisation of operation and sustainable growth (the fifth and last of the mentioned development phases in the cited model). The move away from the focus on technology is not only due to the definition review. The results of the studies carried out in 113 out by 589 municipalities of Belgium also point to that move (Desdemoustiera et al., 2019, pp. 129–141). They suggest understanding the term “smart city” in terms of four dimensions: Technological (implementation of technology), social (sustainable and institutional human place), comprehensive (technology integration, human orientation, sustainable development and institutional factors) and “non-existent” (related to a lack of understanding of the concept of a smart city). Other studies also point to a multi-factor understanding of the concept of a smart city and the importance of

The management of municipal space  127 citizens understanding the initiatives taken in their area of residence. The factors to which attention is drawn concern environmental protection, sustainable development and the perceived tangible and intangible assets (interactions, culture, values and norms) of the city’s territory (Schleich and Faure, 2017, pp. 62–71). Reports of local authorities which make up smart cities show similar dynamics. A city that is well described when it comes to local government is Bergen (https://nscn​.eu​/Bergen; https​:/​/ww​​w​.ber​​gen​.k​​ommun​​e​.no/​​engli​​sh​/th​​e​-gre​​en​-ci​​ty​ /be​​​rgen-​​smart​​-city​). The city is being developed by the local government according to the smart city concept and is also part of the Nordic Smart City Network. Bergen is currently active in three areas: Smart Health Care, Smart Mobility (public transportation) and improving energy efficiency. There are still infrastructure activities based on new technologies (Smart Buildings), but in the other two areas (Smart Health Care and Smart Mobility), there are clear references to residents, their needs and their lifestyles. Also in the last of the areas – energy efficiency (Smart Buildings) – the discourse initially shows a focus on infrastructure (building and strengthening of the energy network) and then moves on to the level of particular residents (households). A summary of the current situation of smart cities can be found in a report which shows a broad perspective of understanding modern cities: “CITYkeys indicators for smart city projects and smart cities” (Bosch et al., 2017). The report describes five areas of smart city sustainability: People, Planet, Prosperity, Governance and Propagation. The first of the above areas, People, is explicitly defined as: “the long term attractiveness of cities for a wide range of inhabitants and users” (Bosch et al., 2017, pp. 10–11). The trend of describing smart cities with a focus on technology and in the absence of any discourse about residents is still strongly present in thinking about urban development (Fernández-Ahumada et al., 2019, pp. 1–17; Polo et al., 2018, pp 1–16), which seems to depend on the development phase of the city itself (Caird and Hallett, 2019). Based on the literature review, it can be suggested that at this stage of the development of smart cities, technology development is creating an increased interest in understanding and interacting for citizens with the advanced solutions in urban areas. We are therefore faced with an interesting paradox: the development of the digitisation of the city is causing a return to the subject of the mental map of its “users.” The local residents and their reception of the smart city are mentioned as one of the key factors in building a sustainable city (Bosch et al., 2017). Thus not only what appears in the digital environment as an effect of an infrastructure project is meaningful, but so is what users choose from that environment (Bounazef and Crutzen, 2019). This is not a completely new trend – considering the concept of smart cities has from the very beginning related to the perception by citizens of their area of residence, for example in terms of comfort of life (Surrallés and García Hierro, 2005). Thus, regardless of the acceptance of the two-phase development of modern smart cities, the theme of the citizens and their perception of technology in municipal spaces seems to be one of the most significant motives for building a sustainable smart city.

128  Jerzy Rosiński

Research part Creating a business model The innovative factors of leisure industry enterprises were analysed based on the data collected during the Start-Up Challenge Competition held in the years 2017 and 2019. Although the competition has been held annually since 2016, the character of the first edition differed from the following ones (start-ups were not split by categories, neither were they described). Each year the competition attracts 100 start-ups from among which finalists are selected in particular categories. The competitions held in 2017 and 2019 featured a category of the leisure industry. Table 7.1 presents the number and distribution of start-ups categorised as being part of the leisure industry. The business model was developed in two stages in 2018 and 2020. In 2018, data from 2017–2018 were analysed with the aim of building a business model. In 2020, data from 2019 were analysed, this time with the aim of re-verifying the business model. In addition, in 2018, references of the model created to well-functioning free time organisations were successfully found, which can be considered as part of model verification. Due to the characteristics of the research data, the qualitative approach was used in the data analysis. In the 2018 research, the main tool was semantic analysis – a technique for categorising and processing data of a qualitative nature as well as short statements and descriptions (Sezgen et al., 2019; Xiong et al., 2019; Liu et al., 2018). Importantly for the subject of the study, this method was used for data of a similar nature from the leisure industry, as it appears to be irrespective of the specific characteristics of the local market described and the affiliation of the researchers themselves (Gorgadze et al., 2019; Homburg and Boochs 2019; Liu et al., 2019). Semantic analysis was used to build a model relating to entrepreneurship and new forms of business activity, which had already been practised before (Erpf et al., 2019). In the 2020 research, content analysis was used. This choice had to do with a smaller number of research materials. However, of key importance for the choice of the inference method were additional analyses carried out with regard to the sender of the message and the assumptions made by the sender about the recipient, which are non-material variables specific to content analysis (Klimkiewicz, 2013). The analyses carried out in 2018 on material from 2017–2018 showed as a result the possibility for a four-factor model describing conducting business in the leisure industry in the age of the fourth industrial revolution. The result was arrived at in the following three steps: 1. Summarising the kinds of business activities in the leisure industry. 2. Putting the companies’ description of their activities through semantic analysis and obtaining four descriptive categories as a result. 3. Verifying the overlap of the four descriptive categories with the activities of the analysed entities.

The management of municipal space  129 Table 7.1 Description of conducting business activity by the Norwegian Fisheries Museum in Bergen as an organisation representing the leisure industry – allocation in four categories Customisation (extreme)

Hand-made (not by a robot)

1. Ways of reaching the museum building 2. Switchable visiting paths (at any time) 3. Elements of spatial arrangement “invite” to take breaks freely and find one’s own pace 4. Wide range of rest areas diverse in terms of quality 5. Staff approving of the adaptation of the space for one’s personal needs (picnic spots, places to have a snack)

1. Manual turning, moving, pushing necessary to get content of the exhibition 2. Making discoveries independently (microscopes and ability to place different objects for viewing) 3. Varied “sensory experiences” for children and adult visitors 4. Fishing independently on a micro scale (for children) 5. Wooden jigsaw puzzles (maps, marine organisms) 6. Manual skills tasks related to the sea (fishing with magnetic rods) 7. Path “a world under water” allows to have a personal experience of individual “ocean floors,” is composed of elements which allow a “personal experience” Creativity (unordered)

Real-time feedback (and action) 1. Interactive exhibition screens 2. Thematic computer games

[and similarly as for category Handmade (not by a robot)]

3. Manual turning, moving, pushing necessary to get content of the exhibition 4. Making discoveries one one’s own/ by oneself (microscopes and ability to place different objects for viewing) 5. Varied “sensory experiences” for children and adult visitors 6. Fishing with one’s own hands on a micro scale (for children) 7. Wooden jigsaw puzzles (maps, marine organisms) 8. Manual skills tasks related to the sea (fishing with magnetic rods) 9. Path “a world under water” allows to have a personal experience of individual “ocean floors,” is composed of elements which allow a “personal experience” Source: Own work.

1. Creating one’s own visit and one’s own space to rest 2. Interactive avatars created from photos of visitors within the space of the town (on screens) 3. Wooden and electronic jigsaw puzzles 4. Unexpected activities along the way (huge crab statue, fishing, entering a metal diving suit) 5. Availability of objects inviting to use according to one’s imagination, taking photos

130  Jerzy Rosiński The analyses conducted in 2018, based on the 2017–2018 material, found their final form by describing how modern leisure industry organisations operate through the following categories: ·· ·· ·· ··

Customisation (extreme); Hand-made (not by a robot); Real-time feedback (and action); Creativity (unordered).

Since the Start-Up Challenge was also run in the next year, the next step in the analysis was to verify whether the four-factor model, derived from 2017–2018 material, was also available to obtain based on the 2019 material. To this end, the same steps as those taken on the 2017–2018 material were repeated on the 2019 material. With the new material (from 2019), it was possible to ask new questions for the four-factor model that had been previously created. The main dilemmas were whether there had been any changes in the structure of the companies in the described industry and whether the four-factor model was still relevant to describe the activities carried out. In the material from 2019, as in the classification of the way in which 18 entities from 2018 operated, three categories are equally filled: Customisation (extreme), Real-time feedback (and action); Creativity (unordered). As in 2017 and 2018, the material from 2019 was relatively represented in the category Hand-made (not by a robot). This may be due to the proportion of leisure industry business initiatives that are linked to online purchases. Such services are usually intangible or are provided by software that has the nature of artificial intelligence; hence, the representation for the category Hand-made (not by a robot) is less significant. The next step was to review the four-factor model created based on the 2017– 2018 data in relation to a non-start-up organisation. This analysis step attempted to map the obtained model with its four descriptive categories to a leisure time organisation which has existed for many years on the market and has been functioning in the reality of a smart city. The Norwegian Fisheries Museum in Bergen (Norges Fiskerimuseum) was selected as an adequate facility to build references in a case study, as it has been operating in Bergen which is a smart city. Designed for modern operation in terms of the idea of its functioning, it is now considered one of the most interesting places in Bergen and Norway. A description of the functioning of the Norwegian museum was “imposed” on the four-factor model obtained by analysing the functioning of start-ups (see Table 7.1). As a result of the qualitative analysis (Table 7.1), the obtained model was confirmed with regard to an efficient organisation from the leisure industry, which is not a start-up but has been active for many years (although it has been reformed in recent years) as a museum. Detailed analyses of the material in Table 7.4 are provided in a separate publication (Rosiński, 2019). The Norwegian Fisheries Museum in Bergen has been recognised as a leisure industry organisation operating in a smart city area and using all four areas identified as important to such organisations.

The management of municipal space  131 The case study of an organisation that is not a start-up also showed that the category Hand-made (not by a robot) is the second most saturated category when it comes to the descriptions of operation. Therefore, early poor saturation may be due to the specificities of the organisations being analysed (start-ups using online shopping apps in 50% of the cases), rather than to the characteristics of the leisure industry. The case study analyses for the museum have also pointed to another aspect of the organisation’s operation. It appears that a separate added value emerges here, resulting from the synergy between the four areas, such as, for example, solutions created with one’s own hands foster creativity and facilitate considering the service as being customised to one’s personal needs, while all of it happens in real time. It seems, therefore, that we can see stability in the trend in subsequent years as regards the two ranges: ·· ··

The ability to describe economic initiatives within the leisure industry using the four proposed categories. The tendency to assign entities more strongly to one of the categories, and a relatively smaller presence of entities described in the next of the categories, which can be linked with market trends (growth in initiatives and web services related to the leisure industry).

Based on the case study describing the Norwegian Fisheries Museum in Bergen (Rosiński, 2019), it can be assumed that these four factors can relate to the specific response of the leisure industry to the challenges of the fourth industrial revolution. Discussion: proposed four-factor business development model for SMEs Interest in the perception of a smart city by its inhabitants can be a way to analyse the opportunities for SMEs in the times of the fourth industrial revolution. This may also be a way to sustainable development – it is worth noting that large social systems (and thus also smart city systems) tend to self-regulate (Kahneman, 2012, pp. 239–249). Therefore, if you present a business development model that is SME-specific and reflects today’s business reality, smart city users (Miloševic et al., 2019) can “notice” valuable SMEs in the city space and contribute to their growth as customers. It is not easy to propose such a model, as the fourth industrial revolution continues to present distinct and specific challenges for small and medium-sized enterprises (Müller, 2020a), and these challenges can be further categorised according to the nature of the conducted business (Müller, 2020b). SMEs require strategies specifically tailored to their requirements to play an important role in creating values in Economy 4.0, but in the area of both diagnosis and business model

132  Jerzy Rosiński proposals, research remains limited in the functioning of SMEs in Economy 4.0 (Müller, 2019) and there is a significant research gap here (Müller, 2020b). Only several studies (Müller and Voight, 2018) show how SMEs operate in the light of the economic, environmental and social challenges related to sustainable development in the age of IoT and Economy 4.0. It seems difficult, or even impossible, to provide a universal benchmark. The obstacle is not a small number of publications, but rather SME development models in the age of Economy 4.0, which at this stage of its development are: ·· ··

Strongly industry-oriented (Müller and Buliga, 2018; Rosiński, 2019); Characterised by development based on separate trends for business-to-customer (B2C) markets compared to business-to-business (B2B) markets: ·· For the business-to-customer (B2C) market, the development trends are on-demand services, improved resource allocation and niche advertising; ·· For the business-to-business (B2B) market, the development trends are new data types to create innovative B2B business models, new data bus forms that enable new B2B business models and new monetisation forms (Müller and Buliga, 2018).

Similar conclusions (towards narrowing the scope of the use of the model) also come from the author’s own analyses. The attempts to create business models for other categories represented in the Start-Up Challenge in 2017–2019 showed difficulties in creating a universal business model for organisations represented in each category of the competition (Rosiński, 2019). Thus, the search for a model suitable for SMEs will be restricted to the leisure industry. The proposed fourfactor business development model is shown in Figure 7.1. The proposed model does not imply the need for SMEs from the leisure industry to take up four of the four factors proposed. Rather, it shows the areas of opportunity and that the more opportunities are met, the more beneficial it is for the company. The data based on which the model was constructed indicated that the organisations active on the market carried out three or four out of the four factors of the model. This combination of factors also indicates that developing subjective cognitive maps of a smart city by its residents is an opportunity for companies not relying on high-tech ICT solutions. The existence and development of new “nontechnological” companies can be considered as an opportunity for the sustainable development of entrepreneurship in the reality of a smart city. By far the most justified from the point of view of the literature (Brzeziński and Stefańczyk, 2013; Cohen et al., 2019; Tohanean and Weiss, 2019) is the element defined as Creativity. At the same time, it is a very broad category (and therefore non-specific), hence the clarifying Creativity (unordered) in order to show the specificity of the category of creativity in the context of the described business entities, and therefore the specificity of the leisure industry in the age of the fourth industrial revolution.

The management of municipal space  133

Figure 7.1  Proposed four-factor business model for SMEs operating in the leisure industry. Source: Own work.

Already present in the economy after the third industrial revolution, Customisation (extreme), or tailoring to the needs of the customer is a well-known descriptive element. In this case, it is not so much a new descriptive element as growth in an already existing trend. Previously nearly absent in the literature, the two remaining categories are relatively new elements in the business model (Rosiński, 2019): ·· ··

Hand-made (not by a robot); Real-time feedback (and action).

What is described as Real-time feedback (and action) is already present in the relationship between software and user (especially in games and entertainment programmes), thus in this case leisure industry organisations it fits into an already existing trend. The factor of customisation was certainly present in the earlier industrial revolution (3.0), for example by producing short series of products, the ability to choose additional features or supplement the product with minor differentiators (which increased the number of combinations), but in combination with the other factors

134  Jerzy Rosiński (Hand-made; Real-time feedback; Creativity), it provides a new expression. These days, it is not so much the producer adjusting to the needs of his or her customers (reading their needs and responding), but we witness a change in which the customer personally, on their own and by means of their activity (Hand-made) creates a solution, freely combining elements in unexpected new wholes (Creativity) and immediately achieving an effect (Real-time feedback). Such a way of thinking is already present in the leisure industry (creating a character in games such as The Sims 4 or World of Warcraft). It is transferred out of the games from the virtual world to the real one (although this division seems to get increasingly fuzzy) and is transferred to new areas, outside games. What is a non-standard element is the expectation that the product or service is not only surprising in its novelty, tailored to one’s expectations and delivered quickly, but also that it is not generated automatically by robots: thus the category Hand-made (not by a robot). It seems that it is the last of these descriptive categories that have the greatest potential for development for the leisure industry. It is a potential associated with redefining past activity and functioning according to new rules so as to perform new functions. Libraries have undergone such redefining. From places in which one checks out books, they have become a common space to spend time in a friendly atmosphere, as well as places which “create culture” through events and permanent features carried out in the space of the library. A similar thing happened to museums, which used to be spaces for collecting, describing, conserving and presenting, and have become interactive spaces of experience, integrating groups of visitors (families, school groups).

Conclusions and recommendations The proposed business model falls in line with the “second phase” of smart city development, which is not only technology-oriented but largely user-centric. It is worth noting that contemporary smart city development models, for example, the strategy for the development of Helsinki as the “most functional city in the world,” include as key elements the ancillary nature of technology for citizens and the presence of start-ups, associations and universities that support smart city users in learning how to use the functionality of digital urban space (Hämäläinen, 2020). A narrow scope of industries could be a limitation of the proposed model, and therefore it is recommended to create user-oriented business models also for organisations operating in other industries. It may also be necessary to use a different research methodology than in the present text.

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136  Jerzy Rosiński Kagermann H., Wahlster W., Helbig J. (2013), Securing the Future of German Manufacturing Industry. Recommendations for Implementing the Strategic Initiative INDUSTRIE 4.0 Working Group. Online Available at: https​:/​/ww​​w​.din​​.de​/b​​lob​/7​​6902/​​ e8cac​​883f4​​2bf28​​536e7​​e8165​​993f1​​fd​/re​​comme​​ndati​​ons​-f​​or​-im​​pleme​​nting​​​-indu​​stry-​​4​ -0​-d​​ata​.p​​df (Accessed: 23.04.2019) Kahneman D. (2012), ‘Pułapki myślenia. O myśleniu szybkim i wolnym’, Wydawnictwo Media Rodzina, Poznań Klimkiewicz K. (2013), ‘W poszukiwaniu paradygmatów, metodologii i strategii. Wizerunek przedsiębiorstwa społecznie odpowiedzialnego: Analiza treści komunikatów’, in: Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, Społeczna Odpowiedzialność Organizacji 288, Wrocław, pp. 57–69 Lam M.L.-L., Wong K.-W. (2020), ‘Human flourishing in smart cities’, in: Digital Transformation in Business and Society Theory and Cases, George B., Paul J. (eds.), Palgrave Macmillan, Springer Nature, Switzerland AG, pp. 13–37 Li C.X., Fong P.S.W., Dai S., Li Y. (2019), ‘Towards sustainable smart cities: An empirical comparative assessment and development pattern optimization in China’, Journal of Cleaner Production, 215, pp. 730–743. DOI: 10.1016/j.jclepro.2019.01.046 Liu W., Lai C., Xu W. (2018), ‘Tweeting about emergency: A semantic network analysis of government organizations’ social media messaging during Hurricane Harvey,’ Public Relations Review, 44(5), December, pp. 807–819. DOI: 10.1016/j.pubrev.2018.10.009 Liu Y., Huang K., Bao J., Chen K. (2019), ‘Listen to the voices from home: An analysis of Chinese tourists’ sentiments regarding Australian destinations’, Tourism Management, 71(April), pp. 337–347. DOI: 10.1016/j.tourman.2018.10.004 Miloševic M.R., Miloševic D.M., Stevic D.M., Stanojevic A.D. (2019), ‘Smart city: Modeling key indicators in Serbia using IT2FS’, Sustainability, 11(3536), pp. 1–28. DOI: 10.3390/su11133536 Mosannenzade F., Vettorato D. (2014), ‘Defining smart city: A conceptual framework based on keyword analysis’, TeMA Journal of Land Use Mobility and Environment, Special Issue: Eighth International Conference INPUT-Naples, 4-6 June 2014, University of Naples "Federico II", Naples Müller J.M. (2019), ‘Business model innovation in small-and medium-sized enterprises: Strategies for industry 4.0 providers and users’, Journal of Manufacturing Technology Management, 30(8), pp. 1127–1142. DOI: 10.1108/JMTM-01-2018-0008 Müller J.M. (2020), ‘Sustainable industrial value creation: An analysis of Industry 4.0 with special regard to SMEs: The Crest of the innovation management research wave’, in: Series in Innovation Studies, Tynnhammar Marcus (ed.), Vernon Press, pp. 211–227 Müller J.M., Buliga O. (2019), ‘Archetypes for Data-driven business models in Industry 4.0’, in: A Conference Paper, Conference: International Conference on Information Systems (ICIS), Munich Müller J.M., Voight K.-I. (2018), ‘Sustainable industrial value creation in SMEs: A comparison between Industry 4.0 and made in China 2025’, International Journal of Precision Engineering and Manufacturing-Green Technology, 5(5), pp. 659–670. DOI: 10.1007/s40684-018-0056-z Müller J.M., Buliga O., Voigt K.I. (2018), ‘Fortune favors the prepared: How SMEs approach business model innovations in Industry 4.0’, Technological Forecasting and Social Change, 132, pp. 2–17. DOI: 10.1016/j.techfore.2017.12.019 Nasir M., Salman M., Ahmad F., Siddiquee T.A.R. (2019), ‘Critical assessment of smart city mission: A research of Gwalior smart city proposals’, International Journal of Innovative Technology and Exploring Engineering, 8(6), pp. 1181–1187

The management of municipal space  137 Papa R., Galderisi A., Vigo Majello M.C., Saretta E. (2015), ‘Smart and resilient cities: A systematic approach for developing cross-sectoral strategies in the face of climate change’, TeMA: Journal of Land Use, Mobility and Environment, 8, pp. 19–50 Pichlak M. (2018), ‘Branże twórcze jako podstawa wdrażania koncepcji inteligentnego miasta’, in: Nauki o. zarządzaniu w odmiennych kontekstach badawczych, Tutko M., Wronka-Pośpiech M. (eds.), WUJ, Kraków, pp. 37–47 Polo M.-E., Pozo M., Quirós E. (2018), ‘Circular statistics applied to the study of the solar radiation potential of rooftops in a medium-sized city’, Energies, 11(2813), pp. 1–16. DOI: 10.3390/EN11102813 Puron-Cid G., Gil-Garcia J.R., Zhang J. (2015), ‘Smart cities, smart governments and smart citizens’, International Journal of E-Planning Research, 4(2), pp. iv–vii Rosiński J. (2019), ‘Predictive factors of innovation in leisure industry organizations as an opportunity in the age of Industrial Revolution 4.0.: A case study of the Norwegian Fisheries Museum (Bergen)’, in: Network, Innovation, and CompetenceBased Economy, Ujwary-Gil A., Potoczek N.R. (eds.), Institute of Economics, Polish Academy of Sciences, Warsaw, pp. 181–203 Rozkwitalska M., Slavik J. (2017), ‘Around learning and Industry 4.0 in management theory’, International Journal of Contemporary Management, 16(4), pp. 185–206. DOI: 10.4467/24498939IJCM.17.044.8267 Schleich J., Faure C. (2017), ‘Explaining citizens’ perceptions of international climatepolicy relevance’, Energy Policy, 103, pp. 62–71. DOI: 10.1016/j.enpol.2017.01.014 Sezgen E., Mason K.J., Mayer R. (2019), ‘Voice of airline passenger: A text mining approach to understand customer satisfaction’, Journal of Air Transport Management, 77, pp. 65–74. DOI: 10.1016/j.jairtraman.2019.04.001 Surrallés A., García Hierro P. (2005), The Land within: Indigenous Territory and the Perception of the Environment, IWGIA, Copenhagen Susantia R., Soetomo S., Buchori I., Brotosunaryo P.M. (2016), ‘Smart growth, smart cities and density’, Procedia: Social and Behavioral Sciences, 227, pp. 194–201. DOI: 10.1016/j.sbspro.2016.06.062 Tohanean D., Weiss P. (2019), ‘Digital entrepreneurship and green business model innovation: Lean startup approaches’, Quality - Access to Success, 20(S2), pp. 630–634 Vanolo A. (2016), ‘Is there anybody out there? The place and role of citizens in tomorrow’s smart cities’, Futures, 82, pp. 26–36. DOI: 10.1016/j.futures.2016.05.010 Vinod Kumar T.M. (2020), ‘Smart environment for smart cities’, in: Advances in 21st Century Human Settlements, Vinod Kumar T.M. (ed.), Springer Nature, Singapore, pp.1–53 Wey W.M., Hsu J. (2014), ‘New Urbanism and Smart Growth: Toward achieving a smart National Taipei University District’, Habitat International, 42, pp. 164–174. DOI: 10.1016/j.habitatint.2013.12.001 Wyman Oliver (2012), State of the UK Leisure Industry: A Driver for Growth, Oliver Wyman, UK, Online. Available at: https​:/​/ww​​w​.oli​​verwy​​man​.c​​om​/ou​​r​-exp​​ertis​​e​/ins​​ ights​​/2012​​/jun/​​state​​-of​-t​​he​-uk​​-leis​​ure​-i​​ndust​​ry---​​​a​-dri​​ver​-f​​or​-gr​​owth.​​html (Accessed: 15.01.2020) Xiong Y., Cho M., Boatwright B. (2019), ‘Hashtag activism and message frames among social movement organizations: Semantic network analysis and thematic analysis of Twitter during the #MeToo movement’, Public Relations Review, 45(1), pp. 10–23. DOI: 10.1016/j.pubrev.2018.10.014 Zygiaris S. (2013), ‘Smart city reference model: Assisting planners to conceptualize the building of smart city innovation ecosystems’, Journal of the Knowledge Economy, 4(2), pp. 217–231.

138  Jerzy Rosiński Websites http://www​.czaswolny​.org (Accessed: 17.08.2020) https://nscn​.eu​/Bergen (Accessed: 17.08.2020) https​:/​/ww​​w​.ber​​gen​.k​​ommun​​e​.no/​​engli​​sh​/th​​e​-gre​​en​-ci​​ty​/be​​​rgen-​​smart​​-city​ 17.08.2020)

(Accessed:

Part 4

SME innovations





8

Innovation 4.0 in developing SME strategy Joanna Dzieńdziora and Małgorzata Smolarek

Introduction The contemporary hypercompetitive environment, the arrival of Industry 4.0 and intensive competition from big and international companies have a significant impact on the SME sector. Small- and medium-sized enterprises quite often use innovations in order to improve their competitive position, although such innovations relatively rarely have a pioneering character; more often they are imitative, which consists of implementing innovation developed by other entities and adopted by the market. Implementation of innovation allows enterprises to achieve and maintain a competitive advantage. Undertaking innovative activity by small- and medium-sized enterprises in the situation of a dynamically changing environment constitutes one of the best ways for the enterprise to stay on the market and achieve success. The innovative activity of enterprises is stimulated by the pressure of the competitive market. Innovative behaviours of business entities depend on many factors, such as, among others: The size of an enterprise, the scope of activity, innovative capabilities, adopted strategy and environmental conditions. Furthermore, internal relations in enterprises constitute a crucial factor. It is especially visible in small- and medium-sized enterprises with strong social relations, that is, each person working at a company is related to a different extent with the innovative process and influences shaping the organisation’s opinion (Niedzielski and Rychlik, 2006, pp. 87–88). In this chapter, it has been attempted to assess the significance of Innovation 4.0 in the concept of the strategy of developing competitive advantages of SMEs. The identification of innovation and determinants of applying innovation practices in SMEs, answering the question of the type of innovations and the type of strategies used in small- and medium-sized enterprises, has been focused on. Furthermore, the analysis covered issues related to open innovations due to their practical significance for SMEs’ strategy in the context of developing competitive advantage through cooperation and, relatedly, gaining and sharing knowledge.

Innovativeness versus SMEs Innovations constitute one of the most effective instruments of achieving, maintaining and improving the enterprise’s position on the market (Vitezić and DOI:  10.4324/9781003184065-8

142  Joanna Dzieńdziora and Małgorzata Smolarek Vitezić, 2015). They have to be a part of the whole management system (Goller and Bessant, 2017). Goffin and Mitchell (2017) are of a similar opinion, as they perceive innovations as the part of the business activity, which creates new ideas. Therefore, the requirements concerning flexibility and innovativeness of the company become more and more important, especially in the context of Industry 4.0. Innovation is the ability to create new things or ideas, which through the so-called diffusion of innovations has become widespread in practice. For the organisation, innovation is a new idea or behaviour that can concern a new product, service or technology (Beyene et al., 2016). Researchers representing social, economic and technical sciences define innovations in various contexts depending on practised scientific disciplines. The innovative activity allows reducing costs of production and sales, increasing the quality of manufactured goods and increasing inflows. Innovation is an instrument of competitiveness not only by searching, but also creating new development opportunities (Chądzyński et al., 2007, p. 142; Kijek, 2011, p. 243; Pomykalski, 2008, p. 100; Schumpeter, 1960, p. 104; Żołnierski, 2005, p. 5). As indicated by J. Gogołowicz (2013, pp. 75–94), economical innovations are deemed to constitute selling, launching a new product (service), or implementing a new process or a new manner of organising business activity. Koch (2005, pp. 81–82) has a slightly different outlook on innovations. The author defines the concept of innovation in a broad understanding, which, according to him, means new products, new offers of services, new management style, new structures and processes in the enterprise, state, administration. Innovations can result from the transfer of technology or the development of new conceptions of enterprises having a technological or organisational nature. The theoretical depiction of innovation due to its ambiguity in many areas of social-economic life may not explain much. It is also worth stating that the concept of innovation is more often associated with new technologies, which do not always mean success, yet can indicate significant dynamism in the scope of technological changes. As such, innovations may be significant or gradual, while they may result from the discoveries and the process in which a new product is created (Minh and Hjortsø, 2015, pp. 209–228). Whereas, with regard to the implementation of new changes or ideas in the intangible scope, it may be indicated that we deal with soft or social innovations. Poll and Ville (2009, p. 879) reviewed the definitions of social innovations and on the grounds thereof stated that they are very general or vague, or highly restrictive. Development based on knowledge and innovations requires increasing the use thereof in the process of managing the organisation and increasing the quality of education, which should be adjusted to the needs of the labour market and surrounding world, and primarily increasing financial resources on research and development works. The experience of countries highly developed in terms of economy confirms the thesis that innovativeness is a source of success for many companies operating on the market (OECD, 2004, pp. 14–15). Innovativeness through initiation, discovery, identification and use of opportunities creates new spaces for strategic management, the object of interest of which is long-term development, formulating the vision, mission and strategic

Innovation 4.0 in developing SME strategy  143 objectives of the organisation, the specification of the strategy and ensuring key resources: Financing the organisation, providing personnel, developing harmonious relations with key social contractors, formulating the strategy of competitive battle and managing strategy implementation, creating new values for customers and thus, increasing wealth of enterprises’ owners (Makieła, 2013, p. 24). Along with the development of the theory of innovation, the innovative process, including the stages of coming up with an idea, research and development, design, production, distribution and sales, was more and more often analysed. Innovative processes prevail in enterprises. An innovative enterprise combines three basic elements in action: It creates a new idea, implements it in practice and funds the introduction thereof. An innovative enterprise can be more broadly defined as capable and prone to continuous search and use in the practice of scientific research results, new concepts, ideas and inventions (Poznańska, 2006, p. 49). An innovative enterprise creates, absorbs and uses new products, as well as being prepared to continuously adapt to changes in the environment (Poznańska, 2006, p. 91). Small- and medium-sized enterprises, due to their characteristics, efficiency, easiness in taking risks, swift reaction to changes in the environment, low capital intensity, high proneness to innovations and directness and flexibility in contacts with a customer, are considered to be a stimulant in the economic development of problematic areas. Enterprises from the SME sector may significantly influence shaping economic growth, significantly participate in creating the gross domestic product, allow diminishing unemployment, supplement the market in the scope of the manufacture of goods and provision of services and activate the local economy (Angowski, 2005, p. 237). Unfortunately, as indicated by numerous studies, using innovations in creating a competitive strategy for Polish SMEs is decidedly insufficient, especially in terms of competing with large enterprises. Small- and medium-sized enterprises focus predominantly on “impermanent,” “downstream” advantages (e.g. labour costs) (Rogut, 2008, p. 67). The main causes of this situation, according to Marciniak (2010, pp. 143–144), include insufficient funds, small financial assistance of state and local government administration, difficult access to scientific-technical achievements, poor relations between SMEs and R&D, a lack of interest of SMEs in technological progress, the high cost of technology transfer, a passive approach and poor offerings of scientific facilities, difficult cooperation with banks, shortages of technical staff and improper state policy in this scope. At the same time, Colclough et al. (2019, p. 783) claim that currently there is not sufficient evidence to support the correlation between the company’s resources and its orientation in the scope of innovation. However, since creativity and innovations in each organisation are necessary for its market success (Anderson et al., 2014), SMEs should emphasise including innovations in their action strategies. Innovations originate from ideas that, as a result of purposeful and organised activities, will be implemented into the business practice and the effect thereof will be new economic value in the form of increasing sales or decreasing costs (Van de Ven et al., 2000). In the subject literature, there are many criteria for dividing innovation

144  Joanna Dzieńdziora and Małgorzata Smolarek strategies. The most often used is the classification that divides innovation strategies into inward-oriented and outward-oriented strategies. Inward-oriented strategies include product attractiveness strategies, market share strengthening strategies, product strategies and human capital and capital resources productiveness strategies, whereas outward-oriented strategies include offensive strategies, defensive strategies and counter-offensive strategies (Janasz, 2003, p. 67). Due to the level of innovativeness, the following division of innovation strategies can be found in the subject literature (Janasz, 2003, p. 74): Imitative strategies and lead strategies. The first one consists of following already verified paths of the enterprise’s development (it may transform into the lead strategy), whereas the other is characterised by high creativity. It requires significant capital expenditures and high costs related to leadership. Adoption of an innovative lead strategy in SMEs seems to be related to applying other practices, e.g. knowledge management. Generating value by innovations is inevitably a successful strategy (Abdul Halim et al., 2019, p. 18). Nevertheless, some organisations are much better prepared than others to seize opportunities. In this spirit SMEs, due to smaller resources, are in a significantly less beneficial situation than larger enterprises. However, since innovations often refer to a part of rather than to the whole product (Zhu et al., 2012), SMEs can specialise in specific areas and create new ideas and solutions. For instance, SMEs can obtain an advantage due to their high flexibility, allowing swift use of new technological possibilities; cooperation with strong partners that can assist in increasing knowledge and financial resources needed for obtaining key technological competencies; overcoming technological limitations; and intuitive and swift recognition of changes in customers’ preferences and market trends in order to identify new opportunities (Keskin, 2006).

Open innovations in terms of SMEs Innovations result from numerous assumptions of interactions between units, organisations and the environment in which these units and organisations operate. Development of the theory of innovation indicates further evolution of these phenomena, especially in the context of occurring and progressing changes and processes in the contemporary world economy (Borowiecki and Dziura, 2010, pp. 201–204). As a result, more complex innovative process models corresponding with the reality are created, among which the so-called open approach – open innovations, open innovativeness – can be indicated (Kozioł-Nadolna, 2012, p. 298). Open innovations are usually contrasted with closed innovations, supposedly as predecessor thereof, where organisations generate their own innovative ideas and then develop, create, sell, distribute and finance them on their own (Chesbrough, 2003, p. 20). Therefore, some authors additionally define open innovations as a set of practices benefiting from innovations (Hye-Seong Jeon and Degravel, 2019, p. 51). In the practice of innovative activities enterprises naturally focused on their internal resources (Grönlund et al., 2010), although the practice of active cooperation with external partners was also observed (Mowery, 2010). It can be especially easily noticed in Swedish companies (Bjerkel and

Innovation 4.0 in developing SME strategy  145 Johansson, 2015). In this context, Chesbrough (2003) introduced the term of open innovation, perceiving it as a contrasting approach to innovations created as a result of the closed innovation process with the use of only own resources of the enterprise. The author was the first to promote the concept of open innovation as “a paradigm assuming that organisations can and should use both, incoming and outgoing ideas and internal and external paths to the market in order to improve own technology.” Therefore, open innovations cover both the organisation’s external and internal exchange in the area of technology and ideas, also defined as purchasing and using technology (Lichtenthaler, 2008). The grounds for developing the concept of an open approach to managing innovations became the assumption that in the world, in which knowledge is broadly disseminated and available, enterprises cannot solely rely on their own research, but they should also share knowledge and obtain solutions from other organisations. Furthermore, enterprises should share solutions unused by them with other entities, among others, on the grounds of licence sales. Transferring the open model of managing innovations boils down to the conviction that if occurring changes cannot be stopped, one should benefit from them. Open innovations are of a model character that is strived for by innovative organisations. Among stakeholders who have an impact on developing, among others, a new product, process or service, there are, in fact, representatives of the organisations’ internal and external environment, including also the customers participating in processes of creating new solutions (Borowiecki et al., 2018, pp. 71–86). In small- and medium-sized enterprises searching for and implementing innovative solutions is, to a large extent, determined by the level of their network cooperation with partners: Business, scientific, public administration or third sector entities. The organisation obtains access to information from the internal environment. Moreover, open innovations provide tools that can help especially SMEs that wish to develop internal innovative measures (Garcia-Vidales et al., 2019) with the use of the information from outside the company in order to generate profits (Casprini et al., 2017). In the era of globalisation, specification and the scope of the organisation’s environment are subject to modification, especially in terms of geography. Stakeholders of the organisation constitute a special element of the environment. Among them, a significant value is provided by information from both customers and competitors. They concern the knowledge which can be obtained from consumers and which is later beneficial for customers as it is possible to offer them products and services more adjusted to their needs. In the network economy, the capacity to create innovations should be developed by the following measures (Klimek, 2013, p. 8): ·· ·· ··

Concentrating on the desired vision-oriented future by designing the future. Using creativity of persons in innovations implemented by selected teams. Ensuring partnership and cooperation – the majority of innovations result from team efforts, thus, one should shift from competition to cooperation.

146  Joanna Dzieńdziora and Małgorzata Smolarek ·· ·· ··

Having IT competencies – nowadays, it is difficult to develop innovations without proper competencies and well-thought-out engagement in the ICT area. Ensuring proper resources and support, that is, open space, technology, access to information and knowledge. Employing educated employees – self-education and self-leadership become very important in the development of competencies, whereas education plays a key role in taking care of the development of innovativeness-related competencies.

Lichtenthaler (2009) believes that SMEs adopting open innovation strategies allows them to share technology externally and covers knowledge transfer to the external environment. Moreover, it allows establishing relations between external co-workers in order to launch innovations and use technological possibilities commercially faster (Mazzola et al., 2012). Due to open innovations, SMEs can achieve better exposition to new knowledge, higher flexibility, the possibility to adjust to external technology and maximise internal possibilities (Arora et al., 2001). As indicated by numerous foreign studies, external cooperation with customers and suppliers is currently very profitable and generates many benefits (among others: Brunswicker and Vanhaverbeke, 2015; Iivari, 2015; Krstevski and Mancheski 2016; Gama et al., 2019; Freel and Robson, 2017; Gao et al., 2019; Feng et al., 2019). While analysing the above measures it should be indicated that the innovativeness of small- and medium-sized enterprises in Poland differs significantly negatively from the average for those enterprises in the European Union, which indicates the urgent need to undertake intensive searches for the possibilities to improve in the scope of the activity of enterprises from the SME sector focused on innovativeness and especially on open innovations, considering their innovative potential, even more so since the positive impact of open innovations on business results and competitiveness of SMEs should be noticed. In order to achieve the above, companies should start paying attention first to internal activities aimed at increasing or promoting knowledge among all of their members. Moreover, companies have to be willing to sell or offer licences or licence agreements to other enterprises in order to generate benefits from their property, patents, etc. It will definitely promote the development of the local and regional economy (Garcia-Vidales et al., 2019, p. 376). To sum up, SMEs should consider the implementation of open innovations in their global strategies.

Innovations in SMEs in light of the empirical research Assumptions of own studies Research results presented herein were obtained during the implementation of the project entitled “Tendencies and challenges in SMEs’ management in the Silesian

Innovation 4.0 in developing SME strategy  147 Voivodeship.”1 The general objective of the research was to diagnose management in enterprises from the SME sector. The research constituted the attempt to answer the following questions:2 ·· ·· ·· ··

What kind of innovations are used by SMEs? Do SMEs include innovation strategies in their strategies of operating on the market? What innovation strategies are used by SMEs? What main barriers are related to implementing innovations in SMEs?

The following research hypotheses were formulated in the research, among others: 1. Innovations in SMEs most often concern a product. 2. SMEs focus more on innovations being a novelty solely for a given company. 3. SMEs include innovation strategies in their strategies of operating on the market, whereas innovation concerns enterprises of a larger scale of operations to a greater extent. 4. Creating innovation strategies occurs in enterprises of a larger scale of operations to a greater extent. 5. SMEs use primarily imitative strategies. 6. SMEs rarely use the open innovation strategy. 7. Barriers related to the implementation of innovations in SMEs predominantly constitute low financial resources allocated to conducting research in this scope and the unwillingness to cooperate in the scope of developing and launching a completely new product. A survey questionnaire mainly made of closed questions was used in the research. The questionnaire was sent to 2,000 small- and medium-sized enterprises in the period between June–August 2019.3 The research was conducted with a correspondence (mail) method. A total of 422 companies participated in the research. In the next step, feedback information concerning the structure of the research sample was verified in terms of basic features – the size of the company and the form of activity. Thus, 417 entities were covered with further analysis. Those companies were asked about innovation strategies they used.

Characteristics of the studied enterprise and entrepreneur Among studied companies, 33.3% were managed by women and 66.7% by men (Table 8.1). The largest group of company owners were entrepreneurs aged 40–99 years, that is, 33.8%, whereas the smallest group was made of persons aged 29 years old and younger (10.8%). There were 21.8% company owners aged 30–39 years old, 21.3% company owners aged 50–59 years old, and the remaining 12.2% were company owners aged 60 years and older. Entrepreneurs with higher education (51.1%) and high school education (32.2%) were

148  Joanna Dzieńdziora and Małgorzata Smolarek Table 8.1 Characteristics of the research sample Research sample = 417 (100%) Characteristics describing respondents covered with the survey research: Gender of respondents Women Men Age of respondents (in years) Up to 29 30–39 40–49 50–59 Over 60 Education of respondents Higher High school Vocational Characteristics describing enterprises covered with the survey research: Size of the company according to the number of employees Micro-sized enterprise Small-sized enterprise Medium-sized enterprise Year of starting the company’s activity …–1989 1990–2000 2001–2010 2011–… Range of the company’s activity (prevailing market) National Local Regional Overseas

33.3% 66.7% 10.8% 21.8% 33.8% 21.3% 12.2% 51.1% 32.2% 16.8% 84.9% 10.8% 4.3% 11.5% 24.7% 29.0% 34.8% 33.8% 22.1% 27.1% 17.0%

Source: Own study.

prevailing among company owners. Of company owners, 16.8% had basic vocational education. Micro-sized enterprises where employment (including the owner) amounts to between one and nine persons constituted the largest group of companies (84.9% of indications). Companies with employment between ten and 49 persons were represented by 10.8% of respondents, and with employment between 50 and 259 by 4.3%. Average employment in the group of micro-sized enterprises amounted to 5.2 persons, in the group of small-sized enterprises 31.5 persons and in the group of medium-sized enterprises 146 persons. Small-sized enterprises came from various industries. In 47.5% of cases the company declared multiple branch activity and in 52.5% single branch activity. The characteristic (common) feature was the prevalence of manufacturing activity. However, in terms of the age of studied enterprises, the largest group was made of companies

Innovation 4.0 in developing SME strategy  149 established in the year 2011 and later (34.8%). In the years 2001–2010, 29.0% of companies were established. In the years 1990–2000, 24.7% of companies were established, and in the year 1989 and earlier, 11.5% of studied entities were established. Character of innovations in SMEs Silesian enterprises to a great extent declare interest in the implementation of innovations (88.5%). Unfortunately, only 46.8% of the studied enterprises declared that in the last three years preceding the research they had introduced changes of innovative character. Innovations for these enterprises4 were usually a novelty on the scale of the company (57.4%), which has been presented in Figure 8.1. Some 25.1% of the respondents indicated a novelty on the scale of the local market, 12.8% on the scale of the regional market and only 4.6% on the scale of the national market. However, it should be underlined that those were only declarations, thus, in reality, the percentage of companies implementing innovations that were novelties outside the company itself could have been even lower. These results confirm hypothesis number two. Introduced innovations primarily concerned the product. Next, they concerned the process, production, organisation, services and marketing management (Figure 8.2). This confirms hypothesis number one. Among the implemented innovations, the innovations related to the introduction of new products that were imitations of competitors’ products prevailed (72.8%) (hypothesis number five). There were 21.5% previously known solutions, which had been modernised and implemented in SMEs in this period, and strictly new solutions amounted to only 5.8%. The character of introduced innovations by type has been presented in Figure 8.3. It implies that the studied enterprises were focused on adapting already existing solutions rather than creating completely new ones.

Figure 8.1  The scale of novelty of the implemented innovation.

150  Joanna Dzieńdziora and Małgorzata Smolarek

Figure 8.2  Types of innovations introduced in SMEs.

Figure 8.3  Character of the introduced innovation versus its type.

The majority of implemented solutions of innovative character had a dimension of demand innovations (74.4%), less often interactive (25.6%). The studied SMEs did not apply the supply approach. Strategies of innovative development in SMEs Innovative changes implemented in the studied SMEs in 67.7% were planned changes (hypothesis number three). In the other 32.3% of cases the introduced changes resulted from using the market opportunity.

Innovation 4.0 in developing SME strategy  151

Figure 8.4  Innovation strategy versus size of SME.

Among studied5 enterprises, 65.2% declare having an innovation strategy, whereas the remaining 34.8% do not currently have such a strategy, while a higher percentage of enterprises having a strategy was noted in a group of enterprises with a greater scale of operations (Figure 8.4), which confirms hypothesis number three. It confirms the rule that companies with a greater scale of operations pay more attention to management with a strategic dimension than companies with a smaller scale of operations. A correlation was noted between having an innovation strategy and the size of the enterprise according to the number of employees (P = 0.009). The most positive answers were given by respondents representing medium-sized enterprises. The second place was taken by small-sized companies. The fewest positive answers were noted in the group of micro-sized enterprises (Figure 8.4). It is confirmed with Chi-squared tests (59,164), a credibility quotient (60,992) and the linear relationship test (1,863). Therefore, hypothesis number four has been confirmed. Considering the criterion of activity, small- and medium-sized enterprises have innovation strategies that are rather defensive strategies (61.8%). Strategies defined as offensive were indicated by 38.2%. The strategy of the market niche is prevailing in the group of offensive strategies (51.9%). Next are the strategy of cost and price advantage (30.8%) and the strategy of quality advantage (7.7%). The strategy of differentiation was the least frequently mentioned one (4.8%). Meanwhile, in the group of defensive strategies, the survival strategy is leading (67.2%), and then the assurance strategy follows (31.0%). The bureaucracy strategy is indicated by 1.8% of enterprises. Strategies of offensive character prevail in enterprises with a greater scale of operations, whereas in smaller enterprises (micro-sized enterprises) strategies of defensive character were prevailing (Figure 8.5).

152  Joanna Dzieńdziora and Małgorzata Smolarek

Figure 8.5  Innovation strategies by criterion of activity versus the company’s size by the number of employees.

On the other hand, considering the criterion of novelty, imitative strategies prevail in SMEs (87.9%) and the remaining 12.1% can be included in pioneering strategies. The above results prove the positive verification of hypothesis number five. It implies that the studied enterprises were focused on adapting already existing solutions rather than creating completely new ones. Taking into account the scale of operations, it can be stated that pioneering strategies were used by enterprises with a greater scale of operations. Micro-sized enterprises implemented only the imitative strategies (Figure 8.6). In the case of pioneering strategies, they are most often related to conducting own research in the area of R&D and are characterised by both advantages and disadvantages, similarly to obtaining information from the outside. In the first case, the advantages should include the ownership of developed solutions and the possibility to sell them, whereas the disadvantages should include the often high costs and time needed for achieving positive results. Meanwhile, with regard to obtaining from the outside, basic advantages include relatively lower expenditures and shorter time (this solution can be faster than the first one). Unfortunately, in this case, large knowledge is needed to properly assess the usefulness of purchased innovation for the enterprise (Brdulak, 2005, p. 55). It is often difficult for small- and medium-sized entrepreneurs to effectively compete in the race for innovations. Therefore, they should learn how to effectively use the already available ideas, especially because currently, large enterprises often prove that skilful use of the already existing ideas is crucial in the market in the context of competitiveness. Relatively few companies implement their innovations with the use of the conception of open innovations. Research

Innovation 4.0 in developing SME strategy  153

Figure 8.6  Innovation strategies by criterion of novelty versus the company’s size by the number of employees.

results show that relatively few companies (2.9% of all studied companies) use open innovations in their practice of activity (which confirms hypothesis number six). And here it can also be noticed that strategies of open innovations were used by enterprises with a greater scale of operations (Figure 8.7). Barriers in implementing innovations in SMEs The above situation can result from the fact that enterprises from the SME sector, despite the lack of proper resources for conducting research in the area of developing

Figure 8.7  Strategies of open innovations versus size of the company by the number of employees.

154  Joanna Dzieńdziora and Małgorzata Smolarek and launching a completely new product, are very unwillingly focused on starting cooperation in this scope. As many as 83.9% of studied enterprises do not cooperate and have never cooperated with any institution or other enterprise (which partially confirms hypothesis number seven). Some 10.8% of enterprises cooperate or cooperated in the past with research and development institutions, whereas only 5.3% of enterprises cooperate or cooperated in the past with other enterprises. It may be proof of a lack of trust in research and development institutions and business partners. Meanwhile, cooperation could increase development opportunities, especially in the context of implementing open innovations and the competitiveness of a given company, even more so because currently such cooperation with external knowledge sources is even considered necessary (Avalos-Quispe and Hernández-Simón, 2019). According to respondents, the main barriers to establishing cooperation with other enterprises include a lack of trust in joint measures and a lack of striving by enterprises to cooperate with other enterprises. Moreover, the lack of awareness of the potential advantages of cooperation constitutes an important barrier. This barrier is related to another barrier, that is, a lack of institutions in the environment that would promote such knowledge and assist enterprises in establishing business contacts (Figure 8.8). Barriers to implementing innovations also include, among others, a lack of relevant funds for conducting research in the scope of developing and launching a completely new product. In fact, the majority of small- and medium-sized enterprises in the scope of funding implementation of own products and/or technologies is based on own resources (85.4%). Additional funds are obtained in a form of bank loans (23.7%). This is still relatively few, since slightly more than 9.1% of studied enterprises finance investments with union funds. This tendency does

Figure 8.8  Barriers of establishing cooperation by SMEs with business partners and R&D institutions.

Innovation 4.0 in developing SME strategy  155 not only characterise enterprises from the given region but, unfortunately, occurs in the majority of Polish SMEs. It is probably related to a certain unwillingness of companies to use foreign resources due to the fear of failure that could then threaten the company’s operations in the market. Other limitations related to the implementation of innovations in studied SMEs, apart from limited financial resources, indicated by 51.1% of respondents (which partially confirms hypothesis number seven), primarily result from the low level of professionalism in managing innovations, a lack of information concerning innovative solutions on the market, a lack of access to innovative solutions on the market, a lack of strategic orientation of the company and limited human resources (Figure 8.9). Other researchers also indicate similar obstacles in instilling the strategy of innovations, the culture of innovation, innovativeness and technological possibilities in SMEs, which include the lack of investment capital, weak infrastructure, improper education and training systems and burdening provisions, as well as a lack of support in the possibilities of gaining knowledge and skills (Ogunkoya Olufemi and Hassan Banjo, 2019).

Figure 8.9  Limitations in implementing innovations in SMEs.

156  Joanna Dzieńdziora and Małgorzata Smolarek Conclusions and recommendations During the research, positive verification of all research assumptions was made. Currently, small- and medium-sized enterprises are interested in the implementation of innovations, however, numerous barriers influence the fact that almost every second company declared that in the last three years it introduced changes of innovative character. SMEs declared that the innovative changes introduced resulted from the held strategy of action. Unfortunately, in over half of cases these innovations were new only on the scale of the company. Solely 4.6% of the cases were innovations on the scale of the national market. Introduced innovations primarily concerned the product. The innovations related to the introduction of new products being imitations of competitors’ products were prevailing. The research enterprises were focused on adapting already existing solutions rather than creating completely new ones. Having an innovation strategy is declared by a little over 65% of studied companies, whereas a higher percentage of enterprises having a strategy was noted in the group of enterprises with a greater scale of operations. Considering the criterion of activity, SMEs operate on the grounds of innovation strategies being rather defensive strategies, among which survival strategy and assurance strategy are leading. Among implemented offensive strategies the strategy of market niche and the strategy of price and cost advantage are prevailing. Meanwhile, considering the criterion of novelty, imitative strategies prevail in SMEs. Simultaneously, only 2.9% of studied SMEs implement open innovation strategies. The main barriers to innovation implementation in SMEs include a lack of relevant financial resources for conducting research in the scope of developing and launching a completely new product, since the majority of small- and mediumsized enterprises in the scope of financing innovation primarily use their own resources. Other limitations include the low level of professionalism in managing innovations, a lack of information concerning innovative solutions on the market, a lack of access to innovative solutions on the market, a lack of strategic orientation of the company and limited human resources. Another obstacle is the SMEs’ unwillingness to start cooperation in the scope of jointly conducting costly R&D.

Conclusion Nowadays, innovations become the basic condition for achieving and maintaining a competitive advantage in the market. Small- and medium-sized enterprises have innovative potential, which makes it possible for them to play an increasingly significant role in creating innovative measures and become significant creators of many new innovations. However, it will happen when the increase in innovativeness is not a result of random measures, but a result of purposeful innovation strategy. The network economy forced the redefinition of the concept of innovativeness and underlined the organisation’s ability to benefit from the process of sharing intellectual capital. Thus, SMEs face the challenge of properly locating their innovative

Innovation 4.0 in developing SME strategy  157 possibilities due to the frequent lack of resources, especially in the context of open innovation. With the assumption that the commercialisation of the innovative idea is of a basic significance for innovation and that SMEs are initiators, yet at disposal of limited resources to implement them, the conclusion can be a possible solution in the direction of extending the practice of open innovation in SMEs. It seems that the practice of open innovation at the stage of commercialisation of innovative solutions consisting of cooperation with other partners can be of fundamental significance for this type of company provided that they overcome their unwillingness to start cooperation with other companies on the principles of collaboration. To conclude, one can risk a thesis that implementation of innovations can soon become a necessity for SMEs and opening innovation processes will be an unavoidable phenomenon in the near future. The new approach to the development of innovation can constitute a big opportunity for strengthening SMEs.

Notes 1 The research constituted a continuation of the research conducted in 2015, 2016 and 2018. 2 Due to the limited content of the chapter not all research assumptions have been indicated, but only those on which the issue of this study focused. 3 The author’s intention was to select the sample on the basis of principles compliant with the requirements of representativeness. The level of significance was adopted within the framework of α = 0.05, whereas the possible error to be made – at the level of 0.07. As a result of adopted assumptions, the minimal number of the sample at the level of 196 was obtained. Then, the return of surveys was assumed at the level of + /–10% and the number of the original sample was assumed at the level of 2,000 enterprises. Stratified sampling was used in the research. The verifiable form of the enterprise’s activity was deemed as the main criterion. Then, research objects were selected randomly (employing between 0 and 249 persons), conducting production activity or in which this activity was prevailing, to which surveys had been sent. 4 The data presented below concerns 195 enterprises which indicated that they implemented changes of innovative character in the last three years preceding the research. 5 Further analysis refers to all companies qualified for the analysis of enterprises.

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9

Open innovations in the hotel chain A new value chain co-created with clients: the Poland case study Mieczysław Morawski and Urszula Bąkowska-Morawska

Introduction The contemporary digital business requires continuous, real-time innovation and an ecosystem of partners where all parties benefit from and can leverage a wide set of capabilities and resources to support near-term innovation objectives. Today’s economy is global, competitive and rapidly evolving through technology and innovation (Choi et al., 2016). The ecosystem of young companies includes technology and blockchain partners, start-ups, universities, partnerships with product companies and platform players. The literature review carried out by the authors shows that co-creation with the participation of many interest groups can give any company benefits in the form of increased productivity and creativity, reduction of costs, the discovery of new business models and sources of income. Benefits can also be reaped by enterprise networks, including hotel chains. Seniors are key guests in many hotel chains. Despite their age and alleged reluctance to change, these clients also expect improvements and innovations, but only if they are tailored to their specific needs and preferences: Health, comfort and safety. The empirical research carried out in this study shows the willingness of seniors to join the innovation process but under certain conditions. The following research which was designed with barriers, problems and challenges in mind has enabled the presentation of a model for the involvement of senior clients in co-creating innovation. The authors intend to achieve several related research goals: 1. To determine – on the basis of empirical research – what the organisational and economic problems, types of risk and challenges in introducing the concept of co-creating value in small hotel chains are; 2. To determine – based on empirical research results – which mechanisms and procedures should be developed in order to encourage a group of senior clients to participate in co-creating innovation; 3. To develop – based on empirical research results – an effective model for the introduction and development of co-creating value dedicated to small hotel chains with the key participation of senior clients;

DOI:  10.4324/9781003184065-9

162  Mieczysław Morawski and Urszula Bąkowska-Morawska 4. To develop a set of practical recommendations for hotel managers indicating, step by step, the most important decisions and actions necessary to implement the concept of co-creating innovation by hotel chain stakeholders.

The concept of open innovation: literature review Currently, amidst the reality of Industry 4.0, the most important factor stimulating the innovation of enterprises is intellectual capital, i.e. knowledge and the people who possess it. In the second half of 2018, the fourth edition of the Oslo Manual (Oslo Manual, 2018), Guidelines for Collecting, Reporting and Using Data on Innovation, was published. The manual is based on the experience gathered while collecting statistics on innovation in both the Organization for Economic Cooperation and Development (OECD), as in other countries, starting from the early 1990s. It is the result of the collective work of OECD and Eurostat working groups, which was attended by over 120 experts from nearly 45 countries and international organisations. Since 1992, the Oslo Manual (Manual Oslo) has set international standards for the conceptualisation and measurement of innovation. This document provides the basis for discussions on innovation, supporting factors and innovation results. Key components of the concept of innovation include the role of knowledge as a basis for innovation, novelty and utility, and value creation or preservation as the presumed goal of innovation. According to the manual, what differentiates innovation from other concepts such as invention is that innovation must be implemented, i.e. put into use or made available for others to use. The term “innovation” can signify both an activity and the outcome of the activity. This manual provides definitions for both. The general definition of an innovation is as follows: An innovation is a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process). (Oslo Manual, 2018, p. 20) Compared to the previous editions, a major change in the definition of business innovation in this manual has been the reduction in the complexity of the previous list-based definition. Informed by cognitive testing work, the classification – instead of four types of innovations (product, process, organisational and marketing) – was reduced to two main types: Product innovations and business process innovations. The revised definition also reduces the ambiguity of the requirement for a “significant” change by comparing both new and improved innovations (Oslo Manual, 2018, p. 21). There are two major types of innovation by object: Innovations that change the firm’s products (product innovations) and innovations that change the firm’s business processes (business process innovations) (Oslo Manual, 2018, p. 70).

Open innovations in the hotel chain  163 Product innovations can involve two generic types of products: Goods and services. Goods include tangible objects and some knowledge-capturing products (see later discussion) over which ownership rights can be established, and whose ownership can be transferred through market transactions. Services are intangible activities that are produced and consumed simultaneously and that change the conditions (e.g. physical, psychological, etc.) of users. The engagement of users through their time, availability, attention, transmission of information, or effort is often a necessary condition that leads to the co-production of services by users and the firm. The attributes or experience of a service can therefore depend on the input of users. Services can also include some knowledge-capturing products (Oslo Manual, 2018, p. 71). New methods and platforms for obtaining knowledge and other innovation inputs from diverse sources have emerged, such as crowdsourcing ideas and solutions to problems (e.g. through inducements such as prizes, awards, tournaments, hackathons – collaborative events where experts meet to develop specialised software solutions – etc.), crowdfunding and the use of digital online platforms to obtain user comments and suggestions on goods and services (Oslo Manual, 2018, p. 128). Open innovation denotes the flow of innovation-relevant knowledge across the boundaries of individual organisations. This includes proprietary-based business models that use licensing, collaborations, joint ventures, etc. to produce and share knowledge. The concept of open innovation (Chesbrough, 2003a) stresses the advantages to firms of “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.” The “open innovation” paradigm has increased awareness of the distributed nature of knowledge production and usage across actors and the importance of accessing knowledge from specialised networks and markets (Arora et al., 2001). OI is focused on exploring new ideas, increasing speed, reducing risk and leveraging scarce resources (Chesbrough, 2003a). Vanhaverbeke and Cloodt (2006) argue that the heavy exchange of ideas and easy access to products is a prerequisite for open innovation. Many theorists have written about the shift from a closed innovation model, in which all aspects of the innovation process take place internally in a tightly controlled, highly secretive environment, to an open model, in which external partners play a key role in helping a company innovate (Lindegaard, 2011). The former model called for self-reliance because successful innovation required control: “If you want a job done right, do it yourself.” It was important to invest as much as possible in research and development (R&D) which gave results in the form of being first on the market with a specific solution, which in turn needed to be protected by patents. The profits could then be reinvested in more R&D (Chesbrough, 2003b). In closed innovation research projects are launched from the science and technology base of the firm. They progress through the process, and some of the projects are stopped, while others are selected for further work. A subset of these is chosen to go through onto the market. This process is termed as closed because projects can only enter in one

164  Mieczysław Morawski and Urszula Bąkowska-Morawska way via internal R&D at the beginning and can only exit in one way by going into the market via the firm’s own distribution channels (Chesbrough et al., 2006). Towards the end of the 20th century, the closed innovation model eroded. One of the main reasons was the dramatic rise in the number and mobility of knowledge workers, making it increasingly difficult for large companies to control their proprietary ideas and expertise. A second reason was the growing availability of private venture capital, which helped to finance new firms and commercialise ideas from corporate R&D. If a discovery was not pursued in time, people went on to pursue it on their own. This shattered the closed innovation strategy (Chesbrough et al., 2006). Over the past few years, many of the leading global companies have begun to embrace open innovation. Some mechanisms of OI are acquiring innovations and inflow of innovation processes, finding external sources of ideas and knowledge, out-licensing or selling a new product and bringing internal sources to the market (Dahlander and Gann, 2010). The open innovation model can be understood as the antithesis of the closed innovation model. In today’s world, useful knowledge is widely distributed, and even the most capable R&D organisations must identify, connect to and leverage external knowledge sources as a core process in innovation. Ideas that once germinated only in large companies now may be growing in a variety of settings, from the individual inventor to the research facilities of academic institutions (Chesbrough et al., 2006). Although the term “open” lends itself to several different interpretations in the science and innovation context, open innovation is a useful umbrella concept for generalising existing and prospective forms of knowledge flows across the boundaries of innovation-active firms (Oslo Manual, 2018, p. 132). Innovation collaboration is an example of a coupled process where all partners participate in both inbound and outbound knowledge flows. Data on the use of inbound and outbound knowledge flows can be used to identify the position of firms in innovation networks. Co-innovation, or “coupled open innovation,” occurs when collaboration between two or more partners results in an innovation (Chesbrough and Bogers, 2014). The “open innovation” paradigm was outlined by Chesbrough (2003b) as a contrast to the traditional closed paradigm of innovation. In the closed paradigm of innovation, protection of internal ideas and technologies and implementation of the internal R&D process seemed essential to maintain a competitive advantage (Giannopoulou et al., 2010; Chesbrough, 2004). Since, “closed innovation”-based business models are incompatible with today’s business environment (Chesbrough et al., 2006), development of new products, optimisation of organisations, bilateral cooperation between suppliers, customers and other firms, even competitors, to gain access to knowledge, technology and innovation resources are necessary (Huston and Sakkab, 2006; Giannopoulou et al., 2010). According to Chesbrough et al. (2006), the core concept of OI is that knowledge can be transferred across a firm’s boundaries. Internal knowledge diffuses outside the firm, while at the same time external knowledge penetrates within. Relationships are central to open innovation: Cooperation with others is basically the fundament of the strategy. With open innovation comes the need to

Open innovations in the hotel chain  165 create networks that include all the potential categories of partners that can support the innovation effort (Chesbrough et al., 2006). The reason companies, especially SMEs, connect with each other is technological complexity (Rese and Baier, 2011). Networks are established to acquire external knowledge (Chesbrough et al., 2006). By networking outside their borders, small businesses can complement their limited internal research and development with knowledge generated by external entities and gain access to external complementary assets. Such networking activities allow them to access national and international sources of new knowledge (Colombo et al., 2012). Teece (1989) presented how cooperation between companies increases the acquisition of knowledge and reduces the inherent waste of duplicate effort. Networks have been found to have a beneficial return on innovations such as increased patent rates, existing product improvements and new product creation, a faster time to market and access to new markets. By providing access to complementary skills, economies of scale and scope and a broader knowledge base, network ties have a positive impact on company innovation (Chesbrough et al., 2006). Open innovation has many benefits. Risk sharing is important. According to Lindegaard (2011, p. 107): “Handling of risk is key to successful open innovation.” With open innovation, risks can be shared among partners, which is impossible in the closed innovation strategy. In a closed innovation system, all of the risks are borne solely by the innovating organisation. In an open innovation system, it can be an attractive option to diversify risk and share both market and technological uncertainty with outside partners (Bingham and Spradlin, 2011; Keupp and Gassmann, 2009). In addition, it should be noted that companies that emphasise open innovation are more likely to create radical innovations and tend to sell a greater number of new products. This is especially important in the hightech industry. Companies pursuing closed innovation are more likely to exhibit a higher incremental product innovation performance. Radical innovations are new products or processes that do not have a market yet and customers, suppliers and investors still have to be found. As a result, radical innovations require a value network perspective where the innovating company manages the external network with all the actors that are necessary to launch the new product offering. This is in sharp contrast to incremental innovations where a company can rely on existing relations with suppliers, channels and end-consumers (Chesbrough et al., 2006). Incremental innovators are just better at creating continuous product improvements in the low-tech industry for example (Inauen and Schenker-Wicki, 2012). Research from Lindegaard (2011) shows that open innovation can speed the development and market launch of new products and services through acquiring external knowledge, bring more diversity to innovation and improve the success rate of new products and service. Further, open innovation addresses the issues posed by rapidly advancing science and technology. Innovating companies leverage and support their own R&D by increasing their openness in innovation (Drechsler and Natter, 2012). The key to creating innovative products and services is the result of global and diverse input. Successful organisations abandon old mindsets and open up to new ideas.

166  Mieczysław Morawski and Urszula Bąkowska-Morawska Innovation is always coupled with change due to the fact that organisations use innovation in order to respond to the changes in their internal and external environment or to take pre-emptive action focused on influencing the environment (Glinska et al., 2017). An innovation is any change in different areas of the organisation activity that introduces progress compared to the existing state, developed in or outside the organisation as a response to some signalled needs or satisfying the needs that have previously had been unrevealed (Damanpour, 1996; Brown and Ulijn, 2004). There is a wide range of factors affecting the application and development of innovation, i.e. consistent industry problems, specific mentality of consumers, cultural and national quirks of the customers enjoying hotel services, etc. (Pine and Gilmore, 1999). If co-creation could be placed relatively easy inside open innovation, the above statement would be fundamentally correct. The highly competitive environment of the hospitality industry drives the search for new ways and elements of efficient performance. One of the core trends in this sphere is the development and application of a variety of innovations and new elements that can serve as a powerful impetus for the development of the hospitality industry. Innovation of all kinds is essential for both the viability and competitiveness of hotel enterprises (Dzhandzhugazova, 2015). Innovative technologies in the hospitality process may be expressed as e.g. a new service product, technology or individual elements of its implementation; as the arrangement of hotel operations; or as new approaches to the management or marketing of the hotel. Innovative technologies in the hotel industry target the effective satisfaction of the needs of consumers and the increase in the competitiveness of service organisations (Dzhandzhugazovaa et al., 2016).

Characteristics of the object of the study The examined group of X hotels provides residence services for both domestic and foreign clients, including seniors. This entity has six operational units distinguished by their excellent location in the mountains and by the sea. Mountain hotels offer extensive recreational facilities and excellent conditions for athletes and active people, while seaside facilities offer a wide range of spa and wellness services, preventive care and a wide range of therapeutic and rehabilitation stays. The described units offer a total of almost 2,000 beds. To date, these facilities (the group has been operating for 25 years) have hosted over 10 million customers, in recent years about 70,000 people per year. The group’s idea is to promote an active lifestyle and recreation surrounded by nature, combined with all-year-round health prophylactics. Guests are offered relaxation full of attractions in a unique, friendly atmosphere both in the mountains and by the sea, accompanied by the slogan “Sports and health all year round.” A total of 400 people are employed in the headquarters and operating units (hotel facilities) of the X hotel group.

Open innovations in the hotel chain  167

Research process – assumptions, methods and results The study group for this research consisted of six hotel units, described in the previous section. The research was carried out for a few weeks, starting mid-May 2020, as all hotels were forced to close due to the COVID-19 pandemic. The sample which participated in the study belonged to two stakeholder groups of the hotels: ·· ··

Six managers managing individual hotel units. 330 clients of this group of hotels, all 65 years or older.

In the first phase, managers’ opinions were surveyed through an online interview questionnaire prepared by the authors, which consisted of 11 multiple-choice questions. Once the questionnaires were analysed, the authors conducted individual meetings with the managers to clarify the answers they provided. In each case, the conversations took the form of an open interview, to which responses to the questionnaires were only a starting point. The survey tool for senior customers was a survey questionnaire prepared by the authors of the study. The questionnaire contained ten questions, including nine multiple-choice questions. Some customers were surveyed during their stay, others were surveyed via the online system. The information base of the examined group of hotels was used. Senior guest surveys began in the second half of May 2020, once the first tourist facilities re-opened after their COVID-19-related closure. A total of 330 respondents participated in the conducted exploratory studies, being guests of accommodation facilities belonging to the examined group “X.” All members of the client group are over 65 years old. Hotel client survey Question No. 1 A total of 73% of the surveyed group of respondents indicated (Figure 9.1) that seniors have specific needs and expectations towards other groups of clients in hotels. Other respondents either had no opinion (6%) or did not think that their age group had any specific needs and expectations when it came to the hotel and recreation offer. Question No. 2 It turns out that the most important need/expectation of senior guests is, in broad terms, safety at their place of stay (Figure 9.2). Certainly, the current situation related to the coronavirus has somehow increased their concern with safety, nevertheless, one cannot deny the assumption that life and health safety will be one of the most important needs of the elderly in the near future, and only those hotels that provide satisfactory conditions will remain successful on the market.

168  Mieczysław Morawski and Urszula Bąkowska-Morawska

Figure 9.1  Do you agree with the statement that senior clients have specific needs and expectations in relation to other client groups in contacts? Source: Own study. What specific needs and expectaons do senior clients have, in your opinion? quick availability of people who can help in case of problems, e.g. health, transport, etc. extenon of the duraon of selected acvies and events, e.g. checking out of a room, releasing a table security and protecon of life and health at the place of stay addional expectaons for service employees: empathy, paence, understanding specific meal requirements and a healthy diet ease and simplicity of operaon of devices and equipment special facilies related to the equipment of rooms and public spaces in the hotel: such as handrails, stairs, moving pla
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Figure 9.2  What specific needs and expectations do senior clients have, in your opinion? Source: Own study.

Open innovations in the hotel chain  169 Special amenities related to the material infrastructure of the facility (e.g. handrails, handles, platforms) and – slightly more indications – additional expectations for staff (so-called soft infrastructure) appear to be another top choice for the guests. This indicates that not only innovations based on technical solutions, such as mobile platforms and maintenance-free check-in platforms, are the appropriate innovations to consider, but also having staff with appropriate characteristics (patience, kindness and the ability to build older customer skillsets) will be an important factor to the senior population. Question No. 3 The surveyed respondents also pointed to other important needs. The most frequently mentioned were (open question): ·· ·· ·· ·· ·· ·· ·· ··

An abundant entertainment programme; Tolerance towards guests; More rehabilitation treatments for the elderly, if available; Trips with facilities for older people; Collective transport to the hotel and back; Cultural and educational programmes; More signage, e.g. at the reception desk so that the guest would have no trouble getting back to their room; Additional physical treatment for seniors.

Question No. 4 Most of the surveyed quests indicated (Figure 9.3) that their specific needs and expectations as elderly people were being met during their stay in the hotel unit. As these answers indicate, there seems to be a good starting point for building a service system for this category of guests in the group of examined hotels. Question No. 5 A total of 38% of respondents said yes to the question of whether they would be ready to present their own ideas of how to improve their stay (Figure 9.4). The same number of respondents did not express an opinion. It can be assumed that although most are happy to see their needs being met, a much smaller proportion of older guests would like to be involved in the innovation processes. Question No. 6 When asked about factors that could encourage respondents to engage in coming up with creative ideas, financial support was the most popular option: Discounts for subsequent stays and the introduction of permanent or periodic rebates (Figure 9.5). Other options, especially those related to sharing information on

170  Mieczysław Morawski and Urszula Bąkowska-Morawska

Figure 9.3  Are your specific needs and requirements met at the hotel unit you are currently staying at? Source: Own study.

the operation of the hotel or knowledge on selected aspects of improving service quality, met with little interest. Question No. 7 In the next question, regarding which means of collecting ideas from a senior group should be used, the respondents pointed primarily to traditional methods, i.e. surveys (over 45% of responses), ideas collected by a special employee during a stay (over 35% of responses) or telephone conversations (22% of responses) after the stay (Figure 9.6). Interestingly, a large number of votes were also awarded to competitions with prizes (over 25%). Question No. 8 Guests were also asked about their opinions regarding barriers that prevent seniors from actively engaging in coming up with ideas (Figure 9.7). As it turns out, the vast majority of respondents indicate a desire to maintain privacy and anonymity during their stay. Other, far less significant barriers include the lack of adequate financial incentives and a lack of understanding on the part of clients of why they should be involved in the innovation process.

Open innovations in the hotel chain  171

Figure 9.4  Would you be ready to present your own ideas for improving the stay in the hotel for senior clients if the management of the hotel were to express this interest? Source: Own study. Which of these factors would encourage you to get involved in creang ideas that would improve the offer for senior clients? short trainings conducted by employees dedicated to a specific topic (cooking, seƒng the table, interior design, using selected applicaons, etc.) providing regular news/updates on current and important hotel maers (e.g. company plaˆorm, newsleers) the organizaon of joint meengs (in an appropriate seƒng: refreshments, small gi…s) for 65+ clients with employees from various departments similar incenves to be implemented in other hotel units that belong to this chain taking into account addional individual requests a special offer for the elderly (addional aracons in the package, e.g. meengs with invited guests - actors, singers) special prizes for the original idea for implementaon introducon of periodic/permanent discounts for staying in a hotel unit enriching the current hotel offer while maintaining the same price range proposals of price discounts for subsequent stays in this hotel unit 0

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Figure 9.5  Which of these factors would encourage you to get involved in creating ideas that would improve the offer for senior clients? Source: Own study.

172  Mieczysław Morawski and Urszula Bąkowska-Morawska What ways of collecng ideas, comments, rangs and opinions of senior clients should your host hotel use?

A Company website Open lectures on problems and challenges of hotel operaons with a discussion session aerwards Informal, inmate sessions with customer service employees Organized games, e.g. culinary workshops - favorite food, room interior arrangement Compeons, tournaments with prizes for clients - e.g. hotel of the future, quality of customer service Collecng and analyzing opinions from social media Designated employee collecng opinions and ideas throughout the stay In-depth interviews with selected loyal clients Phone calls aer the end of the hotel stay Telephone conversaons with clients before the stay Online customer surveys aer the stay Customer surveys during the stay 0

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Figure 9.6  What ways of collecting ideas, comments, ratings and opinions of senior clients should your host hotel use? Source: Own study. What barriers may occur in the acve involvement of senior clients in creang ideas? Willingness to maintain privacy and anonymity of staying in a hotel unit Senior clients might not understand the purpose of these acvies and see no need to engage in them Inappropriate means of collecng customer comments and ideas (e.g., surveys, interviews) Employees who are unable to encourage discussions, conversaons and formulate comments and ideas The lack of adequate financial and material incenves to get involved in creang ideas 0

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Figure 9.7  What barriers may occur in the active involvement of senior clients in creating ideas? Source: Own study.

Open innovations in the hotel chain  173 Question No. 9 When choosing the benefits that the co-creation of innovation by senior clients can bring, the respondents strongly (over 50% of responses) pointed to building strong relationships between elderly clients and the hotel (Figure 9.8). Other, much less frequently indicated benefits were better matching of offers to the clients’ needs and growing individualisation of offers (30% of indications each). Question No. 10 When asked whether their hotel can be described as innovative, the largest proportion of respondents gave the hotel a good rating, falling within the range of 6–8 points on average. (Figure 9.9). Management survey The authors of the study assumed that selected variants of responses to the questionnaire (carried out online) as well as comments to them (given by managers in direct open interviews, which were conducted several days later at individual hotel facilities), should all be presented in one place. Question No. 1 To the question of what innovation means in their hotel unit, the vast majority (as many as 71%) responded – with four variants to choose from – that it is an What are the benefits of including senior clients in contribung to hotel innovaon? mastering new competences regarding the service of elderly people greater loyalty of senior clients included in the innovaon co-creaon program greater sense of security among senior clients the possibility of prior assessment and even tesng of new soluons by senior clients creang a database of preferences, preferences and wishes of individual senior clients beer customer service greater variety of new soluons introducing new original ideas, impossible to create without the involvement of older customers building strong hotel-customer relaonships based on understanding mutual expectaons increasing individualisaon of offers soluons within the stay offers more suited to the needs and preferences of senior clients 0

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Figure 9.8  What are the benefits of including senior clients in contributing to hotel innovation? Source: Own study.

174  Mieczysław Morawski and Urszula Bąkowska-Morawska 140 120 100 80 60 40 20 0

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additional value resulting from the acquisition of ideas and experiences of various groups of stakeholders. Such an unambiguous answer may indicate understanding by the managers of the examined group of hotels of the importance of the principle of co-creating innovation with stakeholder groups. Question No. 2 The answer to Question No. 2 poses itself in some opposition to the answer to the first question. The largest group of managers (47%) pointed to hotel management as the main culprit of innovation (Figure 9.10). In direct conversations with managers, there was a great sense of responsibility for the hotel units being run and at the same time a high personal commitment to daily management processes. During the conversations, managers enumerated examples of close contacts with clients: Meetings with guests during meals and over a cup of coffee, frequent contacts with the group carers organised in various places of a given hotel facility (bicycle rental, bowling, swimming pool), waiting for guests at the reception desk whenever there was some issue. It may be assumed that managers see themselves as initiators of most important events, including those related to the customer approach and service. They are sensitive to customer opinions and ratings and try to respond quickly to problem situations. They are eager to listen to the expressed opinions of customers, using various occasions for short but honest conversations. In summary, managers are aware that new values are created through the input of stakeholders, including customers, but they want to have a decisive impact on the way, place and reason for using their experiences and ideas.

Open innovations in the hotel chain  175 What is the share of these enes in coming up with hotel innovaons?

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Figure 9.10  What is the share of these entities in coming up with hotel innovations? Source: Own study.

Question No. 3 In the following question (Figure 9.11), managers were to rank external entities according to their degree of impact (on a scale of 0 to 10) on boosting innovation in hotel units. There are 13 entities to choose from. Social media received the highest number of points (7.7), followed by competitors in the sector (6.5 points), followed by companies enriching the client’s offer – cultural, guide, trip, sports and recreational services, then brokers in the booking process and individual clients – with the same number of points: 6.3. This order of ranking external entities may prove that hotel units carefully observe and analyse information coming from social media as well as their competition. Then they react to perceived opinions and adapt solutions used elsewhere. While perfecting their offer, they probably largely apply the imitation strategy. The assessment of the external entities’ impact, on the other hand, is dispersed. The two mentioned entities have a fairly clear advantage, but the next three have obtained slightly fewer points. This may prove that the examined group of hotels does not have a developed strategy of engaging selected strategic partners in the innovation process. It is worth noting that the entities that according to managers do not provide any innovation, ideas or new solutions are companies providing ancillary services – laundry services, waste collection (3.0) and universities (3.0). This assessment most probably accurately reflects reality. Unfortunately, universities are not seen as partners for hotels in developing innovations. Direct conversations with managers confirmed that there is no cooperation at all, which indirectly affects the impossibility (lack of the latest knowledge about concepts and models) to develop a strategy of cooperation with stakeholders.

176  Mieczysław Morawski and Urszula Bąkowska-Morawska WHICH EXTERNAL ENTITIES ARE AN IMPORTANT SOURCE OF INNOVATION FO THE HOTEL? 9 8

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Figure 9.11  Which external entities are an important source of innovation for the hotel? Source: Own study.

Question No. 4 Customer service, a process that appears to be one of the most important in hotel services, was another area examined by the questionnaire. When asked which elements of the customer service process are being constantly improved thanks to customer opinions and assessments, the managers indicated mostly employee competence, followed by the quality and variety of food and additional attractions during the stay. During the conversations, managers clarified their choices in relation to senior clients. They stated that service employees are trained to meet the needs of elderly customers, for whom patience, self-control and kindness are important (Figure 9.12). According to managers, awareness of the particular needs of senior guests is gradually growing among employees. Additionally, aspects such as visible cleanliness and tidiness, clear instructions and recommendations made available in visible places, preferably complemented by a photo or drawing, are all factors that add up to the guests’ perception of professional customer service. According to managers, what is particularly important for seniors are also additional attractions that are provided as a full package by the hotel, such as easy access to cultural events (concerts, theatre performances) by bus with a guardian and meals provided during the trip. Question No. 5 The answers given to Question No. 5 go hand in hand with previous statements by managers. When asked how customer reviews and ratings are collected, almost

Open innovations in the hotel chain  177 Which elements of the customer service process are improved under the influence of customer opinions and ra ngs? Clarity of rules in force in the hotel unit Addi onal a€rac ons during your stay swimming pool, fitness, anima ons, concerts Quality and variety of food Condi ons of stay in the apartments - equipment, replacement of consumables, cleaning The level of professional competence and hospitality of employees Ways to book your stay Availability of informa on about the hotel offer in various media 0

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Figure 9.12  Which elements of the customer service process are improved under the influence of customer opinions and ratings? Source: Own study.

all managers said they use social media and meetings with clients during their stay for this purpose (Figure 9.13). Other means are practically irrelevant. During direct conversations, managers once again emphasised their commitment to contacts with clients, which translates into frequent, personal meetings and conversations with senior guests. Sometimes the conversations are deep and cordial, other times they are more specific, short interventions in passing. Various social media are analysed: Twitter, Instagram and Facebook. Question No. 6 This question concerned future possible ways of collecting ideas from senior clients. In the online survey questionnaire, all managers indicated in-depth interviews with selected loyal clients (Figure 9.14). Throughout the post-questionnaire conversations, managers presented various proposals for collecting feedback from their visitors. For example, a recurring idea seemed to be conversations with tour operators who organised the arrivals of senior guests at trade fairs and congresses of the tourism industry, a method which they had not explored previously. This could prove especially useful in the case of foreign organised groups when handling unprecedented preferences and expectations. Managers have not yet developed a strategy and thus a model of interaction with clients in the field of innovation. Their suggestions to talk to selected clients or use the company’s website or open lectures and lectures are unrelated. They lack a systemic view. This was clearly revealed during the one-on-one conversations with managers.

178  Mieczysław Morawski and Urszula Bąkowska-Morawska What are the ways of collecng customer opinions / rangs about the stay? Conversaons with tour operators Collecng and analyzing opinions from tradional media - radio, TV, newspapers Collecng and analyzing opinions from social media Periodic interviews and conversaons with employees Designated employee collecng opinions Meengs with clients during the stay Telephone conversaons with clients before, during and aer the stay in the hotel Customer survey 0

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Figure 9.13  What are the ways of collecting customer opinions/ratings about the stay? Source: Own study.

What other, unconven onal ways of collec ng ideas from senior clients would be worth implemen ng in a hotel? Company website Lectures, open lectures with discussion session Informal, in mate sessions with customer service employees Organized games, e.g. culinary workshops - favorite food, room interior arrangement Contests, tournaments with prizes for clients - e.g. hotel of the future, In-depth interviews with selected loyal clients 0

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Figure 9.14  What other, unconventional ways of collecting ideas from senior clients would be worth implementing in a hotel? Source: Own study.

Question No. 7 The question refers to barriers that occur in collecting ideas from clients. According to managers, the biggest barrier is the lack of time, tools and procedures (Figure 9.15). In fact, among the proposed list of barriers, managers, apart from one – employee competence barriers – also often indicated social barriers, technical and technological barriers and organisational barriers. In their

Open innovations in the hotel chain  179 What are the barriers to collecng ideas from senior clients? social barriers (lack of habits, difficules in communicaon, misunderstanding of needs and expectaons) employee competence barriers (lack of knowledge and skills, lack of training) technical and technological barriers (no proper communicaon channels, no programs, no equipment) organizaonal barriers (no posted employees, no me for addional acvies, no procedures and tools) 0

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Figure 9.15  What are the barriers to collecting ideas from senior clients? Source: Own study.

subsequent conversations, they emphasised the growing competence of employees and better service for senior guests. On the other hand, pointing to such various barriers seems to indicate that the subject of co-creation of innovation with senior clients remains for the time being in the sphere of quite distant projects, not yet analysed and deepened by, for example, identifying specific barriers, problems and challenges. Question No. 8 In Question No. 8, the respondents indicated suggestions for incentives for seniors wanting to co-create new solutions. According to the answers given, managers do not have a clear view of this topic. What dominated throughout the conversations was a traditional view of customer behaviour; the concept that financial arguments are the main incentive for any client (Figure 9.16). Managers assume that older customers can be encouraged primarily through offers of price discounts or by offering an enriched offer during a given stay or by offering special benefits or perks in the future. This approach is not much different from the approach used in relation to the remaining customer groups. Question No. 9 Answering the question of what is different about the expectations of senior clients, the vast majority of managers stated that the key difference is their specific expectations related to everyday customer service (e.g. cleaning, table service) and to a lesser extent to the comfort of the place of stay or specific requirements

180  Mieczysław Morawski and Urszula Bąkowska-Morawska How to encourage senior clients to co-create new soluons? constant informaon on current and important hotel maers (e.g. social pla…orm, newsleers) organizing joint meengs for 65+ clients with employees from various departments taking into account addional individual stay wishes a special stay offer for the elderly (addional aracons in the package, e.g. meengs with invited guests - actors, singers) special prizes for the original idea for implementaon introducing periodic/permanent discounts for hotel stays enriching the current stay offer proposals for price discounts for subsequent offers 0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Figure 9.16  How can senior clients be encouraged to co-create new solutions? Source: Own study.

for the equipment of the rooms (Figure 9.17). It can be concluded that the knowledge of managers comes from everyday contacts with this category of clients. These are some of the less accessible levels that may be due to a lack of knowledge on the subject – hence the managers’ caution in answering this question. Question No. 10 When asked Question No. 10 about the benefits of including clients to co-create innovation, the managers pointed to a greater sense of security, which is consistent with customer expectations – increased security (Figure 9.18). In addition, in their eyes, the co-creation of innovations could contribute to building strong client–hotel relationships and improving the object’s reputation as one where there is a high understanding of the needs of the elderly. Question No. 11 Most managers rated the innovation of hotel units as average. There is probably a lack of spectacular or at least significant changes in the functioning of the facilities. The changes probably involve the gradual improvement of existing solutions.

Key findings 1. According to the surveyed managers of the hotel units, the particular approach towards senior hotel guests should first and foremost be manifested

Open innovations in the hotel chain  181 What is different about the expectaons of senior clients? other life preferences (e.g. safety and comfort of the place of stay, peace and slow moon and acvies, physical availability and ease of use of devices) service expectaons (recepon, cleaning, table service) - friendliness and understanding

specific meal requirements and a healthy diet

specific requirements for room equipment 0

1

2

3

4

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6

Figure 9.17  What is different about the expectations of senior clients? Source: Own study. What are the benefits of including senior clients in contribung to hotel innovaon? mastering new competences regarding the service of elderly people greater loyalty of senior clients included in the innovaon co-creaon program greater sense of security among senior clients the possibility of prior assessment and even tesng of new soluons by senior clients greater reputaon of the hotel that meets the expectaons of older people creang a database of preferences, preferences and wishes of individual senior clients beer customer service greater variety of new soluons introducing new original ideas, impossible to create without the involvement of older customers building strong hotel-customer relaonships based on understanding mutual expectaons increasing individualizaon of offers soluons within the stay offers more suited to the needs and preferences of senior clients 0

1

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Figure 9.18  What are the benefits of including senior clients in contributing to hotel innovation? Source: Own study.

by appropriate service for this category of customers during their stay. Staff members are constantly reminded of the appropriate behavioural culture in dealing with senior clients. On the other hand, managers are actively reaching out to senior guests in order to ensure their satisfaction with their stay, similar to what they do with other groups of guests.

182  Mieczysław Morawski and Urszula Bąkowska-Morawska 2. Senior guests are treated like any other category of customers by managers, who determine the specificity of their needs and expectations by guessing rather than by trying to identify and distinguish specific features or build adequate solutions on this basis. Analyses of this category of clients are superficial and intuitive and there is no relevant research that would support the assumptions of the managerial group. The accuracy of the arrangements for specific guests depends primarily on the experience and personal commitment of the local manager. 3. Not being able to recognise the growing importance of 65+ customers with regards to innovation is indicated by the responses of managers in which they could not indicate the most important barriers in collecting ideas from senior guests, as well as the lack of original proposals for collecting those ideas and quite simple and limited incentives to co-create innovation (only material and financial). It is symptomatic that the surveyed managers, when indicating the differences in the expectations of senior clients, rarely chose their life preferences. These preferences (e.g. comfort, safety, slowing down the pace of activities) were probably not the subject of consideration among the managers and hence there were some cautious and conservative responses. It is easier to indicate the requirements related to daily service because many issues are known and are resolved on an ongoing basis (just about all the respondents mentioned customer service). However, the specific preferences of older guests regarding room furnishings, the type and quality of meals, etc. would require research and analysis that have not yet been carried out. It should be noted, however, that the understanding of the specific expectations of these clients is gradually improving, e.g. greater comprehensiveness of services and education. 4. It would be unjust to deny the surveyed managers goodwill and a kind attitude towards senior clients. As proven by this study, hotel management is very committed to the efficient functioning of their hotel units. However, there is a lack of an overall strategy adopted for the entire group of hotels and a lack of implementation of its assumptions in individual units. Missing also is the effective exchange of knowledge between hotel units and training courses or workshops. In general, 65+ guests are not treated as a special group of clients, and the features that are assigned to them are associated with the stereotypes attributed to the elderly. This, in turn, prevents the managers from treating this category of clients as able to contribute to innovation and developing programs co-creating new solutions on this basis. However, most surveyed managers mentioned observing competition and analysing social media as a main source of inspiration when it comes to innovation. The authors also noted a fascination with the development of new technologies and the possibility of their use in the future, e.g. recording the body temperature of hotel guests through scanners. 5. The surveyed 65+ guests showed a great sense of their own identity. They pointed to a variety of needs and desires, which was especially prominent in the only open question of the survey. One can infer that the respondents would like their needs to be known and treated in a maximally individualised manner. At the same time, in the closed question, the respondents chose various

Open innovations in the hotel chain  183 requirements and expectations, with most emphasis on health and life safety and specific expectations towards service employees and special hotel room equipment. These answers showed not only high self-awareness of their own preferences, probably related to many experiences, but also showed a spectrum of challenges for the hotels themselves. At the same time, a large commitment to completing the surveys and the responses received are an important argument for initiating co-creating innovation with this group of stakeholders. 6. A total of 38% of surveyed seniors expressed willingness to participate in innovation initiatives launched by the hotels. At the same time, a comparable number of respondents had no opinion on this topic, in other words, they had not been yet convinced. Overall, these results are a good predictor of the development of innovation co-creation programmes. It should be noted that due to the group’s age and experience, the respondents are probably cautious in making declarations. However, their positive responses are promising. A factor that needs to be taken into account is the necessity to provide specific incentives to encourage participation in various programmes. Currently, as the survey answers suggest, the main motivator for this group of guests would be tangible benefits such as discounts or special stay offers. It is worth adding that seniors notice a number of benefits of involving their age group to co-create innovation. They actually go hand in hand with their own expectations: Increasing individualisation of offers, adapting offers to their needs, increasing their sense of security, creating a database of seniors’ preferences. Interestingly, building strong hotel–client relationships was considered the most important benefit. This could be seen as an indication of their willingness to join in the process of innovation based on mutual loyalty and resulting in mutual benefits. 7. The responses of senior guests on how to gather their ideas turned out to be rather traditional: Surveys, phone calls, collecting ideas by a specially appointed employee. The most original choice of the group was contests and tournaments with prizes for hotel guests. Other, equally unconventional means of surveying met with little to no interest.

Discussion: a model of co-creating innovation in a hotel chain The contemporary development of civilisation is subject to the simultaneous influence of many different social, demographic, climatic, economic and technological factors. The new world is currently often described as the new normality of VUCA (Vola​tilit​y-Unc​ertai​nty-C​omple​xity-​Ambig​uity)​. This stage of rapid and turbulent development is more and more often called the Fourth Industrial Revolution (4IR), a term coined by Schwab (2016). In Europe, the Fourth Industrial Revolution in its economic and business dimensions is often called Industry 4.0; in the US we are talking about the Manufacturing Partnership 2.0; in China it is the Made in China 2025 initiative; and Japan is currently implementing the Revitalisation – a 2020 robotic strategy initiative. Individual national or regional initiatives differ from each other by local conditions – specificity of

184  Mieczysław Morawski and Urszula Bąkowska-Morawska access and use of resources, temporal priorities of the implemented economic policy, the existing density and level of industrial infrastructure (energy, transport, etc.). On the other hand, however, the observed major megatrends of transformations – which seem to be permanently changing our current reality – appear to be the same everywhere. Industry 4.0 is all about the Internet, a virtual space that provides endless opportunities to work and cooperate in a networked environment. The digital revolution that is taking place, by its nature, primarily concerns young, educated, metropolitan members of the community, who easily and quickly enter the roles of both creators and consumers of new services based on rapidly developing technologies. By using technological resources and networks built through online social media, they – as market entities, suppliers and recipients – construct new online business models based on global networks. And this is how the virtual world enters the real world: Enterprises, market segments, products, financial and material capital, customers. New objects, processes and events are emerging and shaping: Smart Factory, Employee 4.0, Workplace 4.0, Innovation 4.0. A prosumer society is created, consisting of individuals who are simultaneously (co)creators of new services and their suppliers, and their recipients and consumers, who evaluate and give opinions on these services. Physical examples of the Fourth Revolution are autonomous vehicles, advanced robots, 3D printing and new materials (e.g. graphene, self-cleaning clothes). In Poland, as in other European countries, in particular in the EU, the share (in relative and absolute numbers) in the society of people in post-working age (male/female – 60/65 years and more) is growing rapidly. In 1990, 12.8% of the Polish population was in post-working age, in 2010, 16.8%, and in 2019, 21.9% (Business Insider, 2020). In the currently thriving hotel sector, there is an opportunity to make great business but there is also increasing competition. In such conditions, the need for new methods of creating innovative solutions is also rapidly growing. One of the most promising approaches is open innovation, involving various stakeholder groups in the process of creating ideas. As a result of these demographic changes in Western societies, seniors are becoming a key stakeholder group in many economic sectors, and especially in tourism, leisure and travel. An important and current research problem is the use of the co-created innovation method by retirement-age customers in small hotel chains. Senior hotel guests have high expectations and specific needs. By definition, co-creation is based on the cooperation with mature, demanding, well-informed customers who know their needs and expectations. Seniors seem to display all of the above characteristics. In recent years, as a result of lifestyle changes attracting more attention to health and living comfort, demographic changes and growing expenditure on preventive health care, the market offerings reflecting the expectations of senior citizens have been rapidly developing in Europe. The ageing of populations in the developed countries poses new challenges not only for healthcare systems but also for tourism and recreation (Nikitina and Vorontsova, 2015). The ageing of many populations worldwide, which has an influence on socio-demographics, health status and travel behavioural patterns, is one of the primary reasons for the development

Open innovations in the hotel chain  185 of the senior tourist segment which is nowadays a part of the global tourism and travel industry (Patterson, 2006; Schroder and Widmann, 2007, pp. 3–17; Nimrod and Rotem, 2010, pp. 65–78). With the increasing number of category “65+” tourists, hotels in which not just medical care but also special geriatric care are available will become of significant interest. In the near future, hotels will be forced to increase the numbers of the hotel staff for the provision of elderly care, not so much at the desk, baggage delivery and registration upon arrival or departure, but for the provision of geriatric care, ensuring the longevity of this age-group population. Accommodation of older people and meeting their special needs will become a priority for many international hotel chains (Nikitina and Vorontsova, 2015). The ageing population, however, at the same time wealthy and aware of civilisation threats, expect a different approach to meeting their needs. The comprehensive offer is supposed to include relaxation and leisure, comfort and safety of the destination, various forms of activities in free time, adequate medical care, physiotherapy, beauty treatment and a proper diet (Bakowska-Morawska, 2019). The research of a small group of hotels carried out and presented in this study indicates that smaller hotel chains are not yet prepared to introduce open innovations and thus co-create innovations. The participation of senior clients in these processes seems even more distant from the perspective of these businesses. On the other hand, more direct, intimate contact with the client is possible in cosy conditions of small hotels where managers are used to everyday interventions: Solving problems, preventing conflicts, clearing up misunderstandings. Although these contacts are usually fire-fighting, the interactions often turn into more peaceful conversations, heartfelt meetings over coffee, free discussions. Even more so, if the guests are loyal customers who regularly visit the establishment. I must admit that small hotels have a special ambience, there is more peace and quiet and time seems to run more slowly than in other places. They are perfect for senior guests who feel safe and comfortable there, especially if they know the place and its employees. In the case of a small hotel chain, the technical and informational infrastructure, human resources and financial resources are all at the disposal of the management board. The management is able to create the right strategy and implement its goals within its subordinate hotel units. Therefore, it seems that the conditions are conducive to co-creating innovation. The management board is responsible for creating strategies, goals and programmes for implementing open innovation strategies with a sub-strategy of co-creating innovations with 65+ clients, while managers are responsible for their implementation in small units. No small hotel would be able to cope with such a challenge organisationally, technically or financially. Functioning in the network gives financial, technical and substantive background to carry out such a project.  The authors of this chapter propose to create a model of co-creating innovation with 65+ clients dedicated to small hotel chains (Figure 9.19). The figures (presented earlier in the study) which reflect the idea of this model assume that the board of directors creates an open innovation strategy as an integral part of the entire business strategy of this network. The sub-strategy of open innovation strategies is a set of goals oriented at launching processes involving senior clients in

186  Mieczysław Morawski and Urszula Bąkowska-Morawska

Figure 9.19  A model of co-creating innovation with 65+ clients. Source: Own study.

creating ideas. It is assumed that the selection and construction of goals, priorities, methods and resources would take place in the process of cooperation between the management board and the departments of marketing, human resources and IT. Their final shape would take the form of the following programmes: ·· ·· ··

Educational; Loyalty; Creating ideas (creative) and their implementation.

Their implementation would be dealt with by customer support groups (costumer support teams), which would consist of employees from the following departments: marketing, HRM, IT. Various support groups will operate in the implementation of programmes with and for senior clients. Their tasks and staff will create different configurations depending on the needs. The authors of the study assume that the legal department and controlling department, reporting directly to the management board, will be involved in the

Open innovations in the hotel chain  187 introduction and implementation of innovation co-creation programmes with the participation of senior guests in legal, formal, economic and financial terms. Employees of these departments will not personally participate in customer support teams; however, their role will be very important. The reports, assessments and recommendations prepared by them will be the basis for the management board’s decisions related to the launch and operation of innovation co-creation programmes. It can be assumed that within these programmes, issues such as assessment of the profitability of introducing new solutions, intellectual property rights of the new solutions, rewards and share of profits from the implemented solutions will appear. Educational programmes would include methods and tools such as workshops, interviews with key clients (tour operators of organised client groups), online training, online competitions and obtained course and training certificates. Customers would benefit from these possibilities via digital platforms or in stationary classes during their stay in the hotel unit. Loyalty programmes would include the rules of customer affiliation to the innovator’s club, rules for accumulating points for ideas, types of discounts and rebates, special offers and rules for obtaining them. Ideas creation and implementation programmes would include a bank of accumulated ideas, rules for assessing ideas, implementation projects, procedures for implementing innovations, rules for disseminating new solutions throughout the network, and principles for knowledge transfer between network units. The authors of the model assume that the ideas of senior guests will arise during stays in hotel units and immediately after returning. Comprehensive education of senior clients is aimed, among other things, at facilitating the use of modern ICT technologies, understanding creative thinking processes, orientation in the hospitality sector in terms of economic and technological development, etc. Ideas analysed by support groups will be shared with unit managers. As a result of the functioning of the model, a group of loyal, engaged, substantively strengthened senior guests will be created.

Conclusion: findings and directions for further research The authors of the study are aware of the numerous limitations of the findings and formulated proposals. The research is not representative of all small hotel chains. Only one selected group whose board agreed to the tests underwent the study. On the other hand, the studied group is a network of units located in known and popular holiday regions in Poland – on the Baltic Sea and in the mountains – the Sudetes. It is an economic entity with a long history of over 20 years, with a relatively large potential of human and infrastructure resources. Over 300 people – senior guests – took part in the research. The research used several research methods: Surveys, interviews and observation of the operation of hotel units. The proposed model is the result of literature studies, research, scientific experiments and personal thoughts of the authors of the study. A recommended next stage of

188  Mieczysław Morawski and Urszula Bąkowska-Morawska research would be a verification of the proposed model and then an attempt to create another model, based on research covering a larger sample of respondents and several groups of hotels. It seems that the previously determined goals have been achieved, and, although to a limited extent, the results obtained fill the knowledge gap in the concept of co-creating innovation with the participation of senior clients within the functioning network of small hotels.

References Arora, A., Fosfuri, A. and Gambardella, A. (2001). ‘Specialized technology suppliers, international spillovers and investment: Evidence from the chemical industry’. Journal of Development Economics, 65(1), pp. 31–54. Bąkowska-Morawska, U. (2019). ‘Offer development for clients aged 55–70 in the sector of Spa enterprises’. In RAIS Conference Proceedings. The 14th International RAIS Conference on Social Sciences and Humanities, Princeton, NJ. Princeton, NJ: The Erdman Center, 20 Library Place, August 19–20, 2019 08540. Bingham, A. and Spradlin, D. (2011). ‘A new innovation framework’. In: A. Bingham, & D. Spradlin (eds.), The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise, pp. 39–65. Upper Saddle River, NJ: FT Press. Brown, T.E. and Ulijn, J.M. (2004). ‘Innovation, entrepreneurship and culture, a matter of interaction between technology, progress and economic growth? An Introduction’. In: T.E. Brown, & J.M. Ulijn (eds.), Innovation, Entrepreneurship and Culture, a Matter of Interaction between Technology, Progress and Economic Growth, pp. 1–38. Northampton: Edward Elgar. Business insider. Polska w liczbach. (2020). Raport Główny Urząd Statystyczny [Statistical Report “Poland in numbers.2020” Prepared by the State Central Statistical Office] [online]. Available at: businessinsider​.com​.​pl. (Accessed: 05.06.2020). Chesbrough, H. (2003a). Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston: Harvard Business School Press. Chesbrough, H. (2003b). ‘The era of open innovation’. MIT Sloan Management Review, 44(3), pp. 35–41. Chesbrough, H. (2004). ‘Managing open innovation’. Research-Technology Management, 47, pp. 23–26. Chesbrough, H. and Bogers, M. (2014). ‘Explicating open innovation: Clarifying an emerging paradigm for understanding innovation’. In: New Frontiers in Open Innovation. Oxford: Oxford University Press. Chesbrough, H., Vanhaverbeke, W. and West, J. (2006). Open Innovation: Researching a New Paradigm. New York: Oxford University Press. Choi, K., Narasimhanb, R. and Kim, S.W. (2016). ‘Opening the technological innovation black box: The case of the electronics industry in Korea’. European Journal of Operational Research, 250(1), pp.192–203. Colombo, M., Laursen, K., Magnusson, M. and Rossi-Lamastra, C. (2012). ‘Introduction: Small businesses and networked innovation: Organizational and managerial challenges’. Journal of Small Business Management, 50(2), pp. 181–190. Dahlander, L. and Gann, D. (2010). ‘How open is open innovation?’ Research Policy, 39(6), pp. 699–709.

Open innovations in the hotel chain  189 Damanpour, F. (1996). ‘Organizational complexity and innovation: Developing and testing multiple contingency models’. Management Science, 42(5), pp. 693–716. DOI: 10.1287/mnsc.42.5.693. Drechsler, W. and Natter, M. (2012). ‘Understanding a firm’s openness decisions in innovation’. Journal of Business Research, 65(3), pp. 438–445. Dzhandzhugazova, E.A. (2015). ‘Innovative marketing mix of hotels: Seven sensual notes of hospitality’. Russian Regions: Looking into the Future, 3, pp. 17–27. Dzhandzhugazova, E.A., Blinovaa, E.A., Orlovaa, L.N. and Romanova, M.M. (2016). ‘Innovations in hospitality industry’. International Journal of Environmental and Science Education, 11(17), pp. 10387–10400. Giannopoulou, E., Yström, A., Ollila, S., Fredberg, T. and Elmquist, M. (2010). ‘Implications of openness: A study into (all) the growing literature on open innovation’. Journal of Technology Management and Innovation, 5(3), pp.162–180. Glińska-Neweś, A., Sudolska, A., Karwacki, A. and Górka, J. (2017). Innovations among People. How Positive Relationships at Work Can Trigger Innovation Creation. Ekonomika a management, XX(3), pp.85–86. Huston, L. and Sakkab, N. (2006). ‘Connect and develop’. Harvard Business Review, 84(3), pp.58–66. Inauen, M. and Schenker-Wicki, A. (2012). ‘Fostering radical innovations with open innovation’. European Journal of Innovation Management, 15(2), pp. 212–231. Keupp, M. and Gassmann, O. (2009). ‘Determinants and archetype users of open innovation’. R and D Management, 39(4), pp. 331–341. Lindegaard, S. (2011) A revolução da inovação aberta: princípios básicos, obstáculos e habilidades de liderança. São Paulo, SP: Évora Nikitina, O. and Vorontsova, G. (2015). ‘Aging population and tourism: Socially determined model of consumer behavior in the "senior tourism”’. Procedia: Social and Behavioral Sciences, 214, pp. 845–851. Nimrod, G. and Rotem, A. (2010). ‘Between relaxation and excitement: Activities and benefits gained in retirees’ tourism’. Journal of Tourism, 12(1), pp. 65–78. OECD and Eurostat. (2018). Oslo Manual 2018: Guidelines for Collecting, Reporting and Using Data on Innovation. Paris and Luxembourg: OECD Publishing and Eurostat [online]. DOI: 10.1787 /9789264304604-en. (Accessed: 01.06.2020). Patterson, I. (2006). Growing Older: Tourism and Leisure Behavior of Older Adults. Wallingford, Oxfordshire, UK; Cambridge, MA: CABI Publishing. Pine II, B.J., Gilmore, J.H. (1999). The Experience Economy: Work is Theatre and Every Business a Stage. Boston, MA: Harvard Business School Press. Rese, A. and Baier, D. (2011). ‘Success factors for innovation management in networks of small and medium enterprises’. R and D Management, 41(2), pp. 138–155. Schroder, A. and Widmann, T. (2007). ‘Demographic change and its impact on the travel industry: Oldies-Nothing but goldies?’ In: R. Conrady, & M. Buck (eds.), Trends and Issues in Global Tourism, pp. 3–17. Berlin and Heidelberg: Springer. Schwab, K. (2016). The Fourth Industrial Revolution. Cologny, Switzerland: World Economic Forum. Teece, D.J. (1989). The Competitive Challenge: Strategies for Industrial Innovation and Renewa, Longman Higher Education; Cambridge Vanhaverbeke, W. and Cloodt, M. (2006). ‘Open innovation in value networks’. In: H. Chesbrough, W. Vanhaverbeke, & J. West (eds.), Open Innovation: Researching a New Paradigm, pp. 258–284. New York: Oxford University Press.

Part 5

Human innovation



10 Human resource management 4.0 Izabela Stańczyk and Magdalena M. Stuss

Introduction Highly developed countries, as well as those aspiring to reach that level in the future, are currently investing in initiatives that support advanced production, while also searching for and creating innovations, as well as planning for the globalised world. The majority of these are determined by the visions of Industry 4.0. The conviction that in the future intelligent factories and intelligent production shall be the norm is spreading (Thames and Schaefer, 2016). The changes that are taking place within the framework of the trend of the innovation of Industry 4.0 are forcing transformation in the area of the processes of human resources management. The work conducted by people is becoming increasingly automated while availing of the latest achievements of robotics, whereas the role of employees in the future shall come down to their modelling and supervision of the course of action. In relation to this, development and training should first and foremost concentrate on the acquisition of competencies in the area of using new applications and programmes. In their research, Rana and Sharma (2019) emphasise four key areas in which changes to the working environment and sets of competencies must take place, in order for enterprises to adjust their own strategies and practices of HRM to the challenges of the future: ·· ·· ·· ··

Educational changes – far-reaching consequences for education and training, which are evoked by replacing human labour with machines, while simultaneously the emergence of the risk of redundancies. Scenario of employment – changes to work patterns and creation of new employment opportunities. Resources of labour infrastructure – more efficient manufacturing systems and challenges in terms of implementing new business models. Significance of work – the management of technology and knowledge is revolutionising activities in organisations.

In the past and indeed currently, the evolution of the personnel function is taking place in accordance with the entire economic transformation of the world (see Figure 10.1). DOI: 10.4324/9781003184065-10

194  Izabela Stańczyk and Magdalena M. Stuss

Personnel processes

HR 4.0

HR 3.0

HR 2.0 • Personel Management

HR 1.0

• Talent Management • Cyber-Physical Systems

• Human Resourch Management • Human Capital Management • HR Business Partner

• Personel Administration The evolution of management processes

Figure 10.1  Evolution of personnel function. Source: Own analysis.

The beginnings of the personnel function date back to ancient times, in which, according to Tadeusz Oleksyn, the following were formed (Oleksyn, 2017): ·· ·· ·· ·· ·· ··

Recruitment and selection; Evaluation of the opportunities and results; Criteria and systems of promotion; Professional enhancement and preparation of promotion; Remuneration; Social welfare package.

The aforementioned functions mainly developed in military organisations and later in banking – i.e. the Medici Bank in Italy in the 15th century. Personnel problems in this period primarily related to the division of labour, practising specific skills, while also attempts were made to define the principles and conditions of work (Pocztowski, 2018). However, in the first period of Industry 1.0 (approximately between 1750 and 1870) a significant technological change occurred – steam power replaced animal energy and running water, while also becoming part of human work. The period of the mechanisation of production commenced, while also being a time of the formation of new sectors of activities. The processes of management were organic and situational, whereby the owners of factories were frequently left to take independent decisions. The formal methods, procedures and other organisational tools were minimal (Workforce Management, 2019). The fundamental issues within the framework of personnel functions were as follows (Listwan, 2010):

Human resource management 4.0  195 ·· ·· ·· ··

Division of labour and work efficiency; Physical conditions of the factory environment; Work discipline; Financial remuneration.

Employees changed their employment in agriculture and craftwork, which had become less required, to work in factories where they usually worked without any formal procedures of employment, training or supervision. A multitude of children and relatives of the family members created some organisations, in which the family relations dictated the practices of management (Workforce Management, 2019). The migration of people from the rural areas to the urban areas took place, where the conditions in which they lived were frequently wretched. Likewise, due to the poor working conditions and numerous accidents at work, the problem of providing care for employees also emerged alongside the associated social activity. With such an approach to work, a human being was acknowledged to be an executor and performer of tasks. In the period of Industry 2.0 (between 1870 and 1960), work was significantly standardised and the scope of work was narrowed down in terms of the search for greater control of the management and efficiency of employees. In this period, an amazing number of changes occurred, including the sanitary conditions, electricity supply, vehicle transport, telecommunication, production with assembly lines on an unimaginable scale and modern medicine. These changes were ultimately combined with the manufacturing demand and wholesale destruction caused by World War II (Workforce Management, 2019). These changes required a far-reaching division of labour in organisations. In the sphere of personnel functions, the appropriate acquisition of people for work became significant. This period was the beginning of the creation of the scopes of activities or attempts to evaluate work positions commenced by Ch. Bedaux in 1916. These were the principles and procedures of standardisation, evaluation and remuneration of human labour. In Europe, the first methods of evaluating work started to be applied in 1918 in a footwear company called Bally SA (Król and Ludwiczyński, 2006). Management in the aforesaid period referred to the activities of such classic scholars as Frederick Taylor or Henri Fayol. They pursued the increased productivity of employees, while also implementing new tools such as planning work, in-house training, motivational pay, retention of employees, etc. (Workforce Management, 2019). Following the classics of management, the accomplishments of scientists dealing with social sciences (the 1940s and 1950s) started to be put into practice. Based on the research of Elton Mayo, some managers attempted to implement the ideas of the management of employees on the basis of “interpersonal relations” (Workforce Management, 2019). In this period, the help of specialists in organisations was commenced for the purpose of managing the work of employees. Organisational support may be perceived in the views of F. Taylor and his “scientific doctrine of work.” For the first time, support for enterprises

196  Izabela Stańczyk and Magdalena M. Stuss in terms of efficient management was mentioned. This illustrates the application of the strategies of management, which he defined as the best way to execute work, while also making the choice of the appropriate person to execute tasks, as well as creating transparent instructions for the execution of the particular activities while ensuring the appropriate working conditions and remuneration (Kożusznik, 2014). From a more distant perspective, it is worth utilising the theories of management in a behavioural approach, where individual attitudes and behaviour have become important. This approach was developed by the representatives of psychology, as exemplified by H. Munsterberg, who indicated the possibilities of supporting managers in terms of managing employees, particularly with reference to the selection of employees and their appropriate motivational level. However, M. P. Follet drew attention to the relations occurring within the organisation. The aforementioned indicators were hints at the further development of the behavioural approach to management. This provided the beginning of the solutions to labour efficiency and aid for research conducted by E. Mayo in the firm Western Electric in Hawthorne. A change in the working conditions of the factory indicated greater labour efficiency, as well as the increased attention to the shaping of attitudes and behaviour resulting from the existing social processes in an organisation. Research conducted in the period of 1927–1932 provided the beginning of greater interest in the role of motivation in terms of management and the existing ties and relations in an enterprise. The concept of “interpersonal relations” was based on several convictions which were acknowledged by long years of research. The most significant of these include the following (Masłyk-Musiał, 2010): 1. Economic stimuli are not the only stimuli that have an impact on the employed. Labour efficiency depends on the frame of mind of a person associated with his relationship with his colleagues and superiors, while also the solution to (and perception of) his personal problems in the workplace and outside the workplace. 2. An employee does not react to stimuli as an isolated individual. He is always a member of some informal group. The contacts with other group members have a great impact on the behaviour in the process of work. 3. Specialisation (division of labour) does not always lead to the increased efficiency of work. It may evoke weariness, tiredness, monotony and discouragement. In sum, the aim in this period of developing the personnel function was to indicate greater respect for employees and greater involvement of employees in terms of taking decisions and adopting a more “participatory” style of management. In the case of multiple managers, this initiative seemed to be forced integration between socio-economic divisions and they unfortunately rejected this. In such cases, both management and work become more standardised. Few organisations adopting the emerging science indicated the potential of the increased efficiency of employees and the growth of business efficiency via the transformation of management into

Human resource management 4.0  197 more participatory methods and growing sensitivity to the needs of employees (Workforce Management, 2019). A further evolutionary change occurred between 1960 and 2020, the so-called Industry 3.0. In this period, it is possible to indicate the model of human resources management, which perceives the company employees as a resource of the company. The author of this notion is acknowledged to be R.E. Miles with relation to his publication of 1965 (Oleksyn, 2017). The work of the scientists in the following universities was significant in the development of this model (Pocztowski, 2018; Król and Ludwiczyński, 2006): ··

··

The University of Michigan, in which attention was drawn to the integration of HRM with the general strategy of the organisation and organisational structure – the so-called Michigan model – and the four functions of HRM were distinguished as follows: selection, evaluation, remuneration and development. The Harvard Business School, where the subject of HRM was introduced into the programme of teaching managers and thus, attention was drawn to the subject of HRM in which the following decisions were taken: participation of employees, fluctuation of employees, systems of remuneration, systems of work.

Activities in the sphere of the function of HR are decidedly moving in the direction of advisory/strategic areas by executing very advanced programmes. The activities of HR specialists should be directed at supporting managers in terms of fulfilling specific roles as follows (Pocztowski, 2018): ·· ·· ··

Executor – adaptation of strategies of organisation to personnel activities in order to accomplish business goals efficiently and effectively; Inspirer – creation of the vibe of sharing knowledge by all the employees and in this way enhancing the intellectual capital of the organisation at hand; Mentor – actively supporting employees in terms of executing tasks.

The aforementioned activities of HR, as well as the constant development of the organisation, also brings the need for investment in the development of personnel cells. As claimed by K. Pawłuszewicz-Matniuk and S. Węsierska, investment activities in the sphere of organising the function of HRM in the years 2006 and 2007 referred to 77% greater cooperation implemented between the personnel department and other departments, 67% informatisation of the personnel function, 65% monitoring of the labour market, 44% changes to the structures and scope of the tasks of the personnel department, 16% implementation of the Integrated Results Card for the functioning of HRM (Pawłuszewicz-Matniuk and Węsierska, 2008). According to A. Macnar, the Departments of Human Resources are facing an exceptional opportunity to change their role in organizations, by transforming from providers

198  Izabela Stańczyk and Magdalena M. Stuss of recruitment services, training and administrative services to a strategic partner of the board in order to provide support for the business activities of the organization. HR departments may become a key element, while quite often the co-creator of directions in which the organization should develop. It would seem to be obvious and natural in terms of the familiarity with the organization which the HR departments undoubtedly have that they should avail of this to diagnose the potential needs of the entire organization. (2011) J. Sullivan defines five levels of development of HRM as (Guryn, n.d):







1. Operational activities – at this level there is a commissioning of the basic functions to external firms, e.g. providing information and answers to questions from managers and other employees, i.e. relating to remuneration. 2. Basic staffing services, which include the following: Calculating remuneration, recruitment, training and development, relations with trade unions, planning employment levels, conducting surveys among employees, enhancing labour efficiency, reporting, thanks to all of which it is possible to predict the staffing situation in the future. 3. Coordination of the functioning of HRM within the various departments – designating common goals and gauges of their execution, mapping and testing of processes, observing the staff turnover, analysing the occurrence of failures – this is a strategic level; here interviews are conducted, while opinions of managers, employees and clients are acquired with regard to the level of quality of the staffing services. 4. Ensuring the competitive advantage of the firm – a strategic level where the maximum concentration of the enhancement of the staffing services for employees occurs, while also the application of modern solutions in this sphere, thus creating the competitive advantage of the firm, which is to build the brand of a good employer. 5. The culture of high efficiency – this is the highest strategic level of HRM that ensures the appropriate execution of the HR processes, whereby the execution of all tasks is measured by ROI.

These activities indicate the intensification of the roles fulfilled as an integrator, advisor and auditor (Pocztowski, 2018). In analysing this period of time, it is possible to observe activities in the initial phase (up to 2010) aimed at reducing employment by lowering salaries, concluding programmes for career development, implementing global employment arbitration, transferring intellectual capital and profit with the aim of acquiring more favourable tax rates, allowing the bankruptcy of retirement programmes, agreements and part-time work contracts and reducing employee social welfare. These trends were the result of the global crisis of 2007–2009 (Workforce Management, 2019). The personnel function takes on the form of the management of human capital, which in turn facilitates the illustration of the impact of employed staff on

Human resource management 4.0  199 productivity and innovativeness, while simultaneously it is decisive in terms of the competitiveness of the enterprise and its position on the market. There is an increasing conviction that the creative abilities of employees should be appropriately availed of, while the increased awareness among employees of their rights and sensitivities to inappropriate treatment may significantly weaken their motivation and level of involvement. In the conditions of a market based on knowledge, human capital is becoming the most important intangible asset for the majority of the organisation. Human capital in an enterprise is undergoing constant modifications and transformation as it is able to learn, change, implement innovations and act creatively, while when appropriately motivated being able to ensure the long-lasting existence and development of the organisation. The knowledge, abilities and skills of particular employees create added value for the organisation (Kowalska, 2015). The changes occurring in the economy associated with globalisation, increased competition and the expectations of consumers have forced entrepreneurs to search for new ways and factors that would facilitate the accomplishment of success by the enterprise at hand and enable it to compete on the market successfully. Traditional human resources were perceived for many years as a source of costs that should be reduced and also efficiency that should be increased. At present, one of the ways to increase the competitiveness of an enterprise, regardless of its magnitude, is the skilful use of the existing strategic resource, namely human capital (Gierczycka, 2002). After 2010, new changes emerged resulting from the global lack of involvement of the workforce, in which employees choose independent work and entrepreneurship rather than employment, there is a widespread lack of candidates ready for work in the majority of categories of work positions and large amounts are spent on attracting and employing candidates of key significance for the enterprises. Managerial staff are frequently forced to give up on business opportunities that do not have sufficient human resources (Workforce Management, 2019). Business partner The transformation of the role fulfilled by HR specialists was presented by D. Urlich in his publications. At the end of the 1990s, he proposed the approach of a business partner as the leading role, consisting of fragmented areas of activity, such as a strategic partner, an expert in the field of administration, a spokesperson for the employees and an initiator of change (Urlich, 2001). The following ten years saw tumultuous changes in the environment of first and foremost technological and economic spheres, while the aforementioned roles of HR also underwent modification. The principal role of HR is that of leadership, which is associated with the integratory function of the tasks of all the departments in the organisation, namely, “the application of the principles of the corporate order and monitoring of the community of HR specialists.” Such a perception consists of the fragmentary roles of the lawyer of employees, the architect of human capital, a functional expert and a strategic partner (Urlich

200  Izabela Stańczyk and Magdalena M. Stuss et al., 2010). These are roles that configure and build the appropriate relations between all the employees in an organisation, while on the other hand, they are the roles that execute the main strategic assumptions of the firm. Far-reaching change and development of such forms of cooperation as outsourcing was the emergence of a new role in HR, known as HRO – human resource outsourcing (Buchen, 2014). E. Banachowicz, director of management consulting at Deloitte, stated that Human Resource Management at the beginning of the 21st century requires the creation of a model oriented towards supporting business and executing the role of the so-called strategic partner. One of the important worldwide trends is that of the outsourcing of these processes, which may be standardized. (Kanikuła, 2007) According to the majority of estimates, Industry 4.0 shall be in force between 2020 and 2050. Industry 4.0 is facing a strong opposing direction with regard to the labour force. We may already note how large enterprises are implementing their main marketing initiatives directed at not only attracting clients but attracting potential employees (Workforce Management, 2019). The tool applied in this area should be talent management. The effective strategy of talents may be to help organisations cope with the tumultuous changes that are taking place in the processes of HRM and that it is necessary for the strategy of talents to be applied in a broader organisational strategy. Such an adjustment is the basis of successful talent management that is connected with the HR strategy in a business sense (Stuss, 2020). Talented employees may facilitate the building of high-quality workplaces, while also creating a learning organisation, constituting significant tools of employer branding and leading to the management of differentiation. With this aim in mind, it is necessary to build the processes that enable the acquisition of talents in a constant manner by acknowledging the need for a constant source of talented people for the creation and execution of strategies (Creating People Advantage Report, 2010). Research conducted by Bethke-Langenegger et al. (2011) confirms that the practices of talent management have a more significant impact on the attractiveness of enterprises, the accomplishment of goals, the satisfaction of clients and corporate profit. Furthermore, research has indicated that enterprises that apply the strategies of talent management and who concentrate on the planning of success enjoy greater corporate profit, while also greater trust and motivation for the achievement of results. Strategies of talent management that concentrate on the development of talents lead to the increased attractiveness of the employer as talents usually become employed in organisations that provide them with a wider range of opportunities to build a career path, while also the opportunities of development and execution of difficult tasks. In the case of some organisations, a change in HRM requires a complete breakthrough. Management 4.0 shall require radical change to the methods of

Human resource management 4.0  201 management for the majority. Nevertheless, it is necessary to note that the majority of managers at all levels either unconsciously or deliberately keep to the old methods of Management 2.0. Regardless of whether they keep to the past or keep to certain unconscious practices of the past, these organisations must still attract employees in order to survive. The fourth industrial revolution is associated with risk, opportunities and challenges. The risk is associated with the ultimate loss of workplaces and an increase in the gap between developed economies and emerging economies. The opportunities may be summed up as a very efficient system of production, combining the low costs with the adjusted products and services. As regards challenges, organisations are capable of availing of the processes within the organisation with the aim of transitioning to HRM 4.0. This change leads to the traditional approach to employment, selection, evaluation and remuneration, while also a new business model based on the common learning and development of competencies, which in turn leads to changes in the system of education.

Challenges of HRM 4.0 Industry 4.0 is a concept that avails of cyber-physical systems (CPS), the Internet of Things (IoT) and the Internet of Services with the aim of transitioning production to the new era. These solutions cause the necessity of transforming the functioning of HR and the departure from the previously known methods and techniques within the framework of HRM. However, this may be significantly hindered, as has been displayed by numerous research projects (see research by, among others, Becker and Huselid, 2006; Guest, 2011; Tushman and O’Reilly, 2013). The directions of the development of the personnel function in the upcoming years shall be determined by first and foremost the huge number of applications and interfaces causing the need for change due to the expanding conditions of the operating framework of the functioning of the processes. Gilchrist (2016) indicates that the consensus involves the “integration of horizontal and vertical channels.” Anyway, this is an enormous encouragement for enterprises and their HR departments to keep up with the fast pace of change that is driven by the evolution of a multitude of supporting technologies. This vision is in accordance with the maxim of “higher quality, yet not at lower prices” and enhances efficiency and the restriction of costs, which lead to the fact that profits rise and the personnel function changes and evolves. Organisation and management, which are distinguished as strategy, leadership, management, culture and people, must develop and evolve in order to cope with these advances in development (see research by, among others, Matt et al., 2018). It is envisaged that within the framework of future intelligent work environments, employees will have to execute tasks based on information from physical and virtual synchronisation as enterprises shall be controlled autonomously (see research by, among others, Lucke et al., 2008). The implementation of new forms of interaction of humans with a machine is the development of the systems of augmented

202  Izabela Stańczyk and Magdalena M. Stuss reality, while also systems that fully avail of touch interfaces and other automatic operating systems (Gilchrist, 2016). In order to gain a competitive advantage within the framework of the 4.0 revolution, it is necessary to expand the HRM processes of such dimensions as added value, originality, barriers to imitations and organisational structure for implementation (Barney, 2002). All four dimensions are activated by the factors of HRM – training of employees and managerial support, or employee support. The factors of HRM increase the “added value” by ensuring more effective resources from the viewpoint of better-trained employees and managers who are full of enthusiasm. The extraordinarily high investment costs of training and development may generate high costs of limitation, thus becoming the first factor of the learning curve (Gowen and Tallon, 2003). Managerial and employee support is key to the success of change in the personnel area in accordance with the doctrine of Industry 4.0, thus enterprises could achieve a greater competitive advantage by means of directing greater amounts of resources within the framework of managerial and employee support with the simultaneous maintenance of a high level of training of employees (Goldstein and Ford, 2002). In the contemporary approach to solutions relating to organisational support (Stańczyk, 2018), it is worth examining the research conducted by L.M. Shore and S.J. Wayne, who indicate the significance of perceived organisational support (POS) as the determinant of the behaviour of those employed, including managers in an enterprise (Rhoades and Eisenberger 2002). This results in the fact that the key issue is the impact of their perception of organisational support (Shore and Wayne, 1993). Research on this subject was conducted by R. Eisenberger, R. Huntington, S. Hutchinson and D. Sowa, who drew attention to the importance of organisational support by increasing the level of involvement and job satisfaction, which in turn, may translate to the effects of work itself (Eisenberger et al., 1986). However, R. Loi, N. Hang-yue and S. Foley noted that a positive perception of organisational support reduces the desire to leave an organisation (Loi et al., 2006). Hence, it is essential that an organisation undertakes steps with the aim of ensuring their appropriate perception by means of defining the strategies and practices referring to human resources, which relate to the needs and expectations of those employed (Tuzun and Kalemci, 2012). The organisational support of managers in terms of increasing their efficiency in management should be directed at the following (Stańczyk, 2018): 1. Business approaches, enhancing the leadership competencies of managers for the creation of the appropriate business models; 2. Adjustment of the manager to tasks; preparation of the appropriate descriptions of roles/work; 3. Availing of resources (social capital, identity, culture of organisation, the appropriately configurated structures of management, existing relations in the team); 4. Availing of IT systems supporting the managerial decisions; 5. Enhancement of managerial competencies;

Human resource management 4.0  203 6. Building motivational programmes; 7. Creation of the appropriate organisational culture; 8. Preparation of a workload model for managers; 9. Enhancement of processes of communication; 10. Creation of the programmes enabling managers to build efficient and greatly involved employee teams; 11. Creation of the appropriate working conditions for managerial positions with regard to the following: ·· Innovative culture; ·· Level of autonomy; ·· Role of psychological contract; ·· Fair working environment; ·· Open communication in terms of management of values/management respecting values; ·· Care within the framework of programmes of mobility, particularly in global organisations; ·· Expansion of system of remuneration to include intangible elements that create the prestige of the work position; ·· Ethics. 12. Exchange of knowledge and information, learning; 13. Building trust; 14. Tools and resources of team management, including evaluation; 15. Application of the systems of quality management. Industry 4.0 is the beginning of a new era in planning and managing the work of an individual. The activities of technological enterprises concentrate on the availability and approaching implementation of new technologies based on artificial intelligence. Thus, the fundamental issue is becoming the necessity of the evolution of human work. Moreover, the type of work, which will change thanks to the new technologies, shall no longer be manual work, which in turn evolved almost entirely thanks to the implementation of technologies in the 19th and 20th centuries (mainly due to the processes of automation, or implementation of IT support tools). Technologies based on artificial intelligence lead to the mass demise of manual work, albeit the principal evolution of human work shall be a fundamental change that involves increasing the efficiency of “work based on knowledge” (Human Capital Management, 2019). In spite of such assumptions, it is necessary to emphasise that human work shall continue to play an important role in future business activities. In Industry 4.0, processes shall continue to be initiated manually, which must be appropriately executed with the aid of such skills as follows: Intelligence, creativity, empathy or flexibility (Spath et al., 2013). However, the position of employees shall change in terms of the systems of production, as well as the tasks that must be performed (see M. Gabriel’s [2016] discussion of E. Pessl). The work content, work processes, working environment and the essential skills require a significant transformation and innovation, while simultaneously new competencies and professions emerge for the employees (Schenk et al., 2014).

204  Izabela Stańczyk and Magdalena M. Stuss HRM 4.0 materialises the strategies of the sector that involve filling vacancies as part of their dynamic opportunities with the aim of adjusting and surviving on the 4.0 market, thus combining real and virtual global information, while also knowledge in the field of management. These changes are approaching fast and the virtual–human interface solutions are not always explicit, as they reach organisational areas, as well as social and cultural areas that have not been diagnosed yet. Qualifications, skills and the appropriate framework of learning are significant issues that support the future programme of development of human resources for an organisation (Liboni et al., 2019). The factors of HRM which support the aforesaid elements, encompass the stable employment of key employees (with temporary employees on the margins); long-term training of employees with multiple skills (multitasking); a system of remuneration partially based on the accumulation of skills; internal promotion within the framework of employer branding; cooperative ties with trade unions; inclusion of line managers in group decisions; the generally egalitarian policies relating to the prosperity of enterprises, communication and motivation of employees (Teece et al., 1997). Apart from the development of industry in the direction of the digitisation of production, the technological changes of 4.0 shall force organisations to adopt adaptive behaviour by implementing the new processes of management that are supported by the evolution of learning. Aguinis and Kraiger (2009) suggest that “organizations that are capable of becoming aware of the benefits accruing from training […], may depart from the perception of the function of training as an operational function, or cost centre in favour of something based on values.” In a multitude of organisations, HR specialists are responsible for planning and implementing training and initiatives for the development of employees that enhance the efficiency of employees and the organisation itself, while also facilitating change at an individual level, as well as at a group and organisational level. It would seem that the specialised knowledge in the sphere of intervention in a unique manner qualifies them for the solution to intricate interpersonal problems associated with helping people in cooperation with the efficient functioning within the framework of revolution 4.0 (Ellinger and Ellinger, 2014). Up to 2030, the labour market shall diversify and HRM shall become the centre of human–technology ties. In the future, digital skills may be needed in the processes of management, such as resolving problems, non-routine tasks and the creation of digital outputs. Researchers claim that digital skills are the most important priority for investments. They are perceived as offering people greater opportunities for employment and employment resilience (Deloitte, 2017). The requirements relating to the qualifications and skills of employees shall be higher than at present as enterprises shall avail of the new technologies and intelligent media. Due to this fact, the system of education is currently being changed from Education 3.0 to Education 4.0. Education 4.0 shall connect information from the real world and the virtual world. Virtual resources shall be utilised for teaching. The virtual learning environment (VLE) shall facilitate the rapid transfer of developed knowledge and skills. A further part of education shall be

Human resource management 4.0  205 the implementation of augmented reality in a real environment (Benešováa and Tupaa, 2017). Analysis indicates that the professions that do not require digital support at present are expected to experience a rise in the requirements in the upcoming 10–15 years, in which these competencies could be utilised in untypical tasks, resolving problems and creating digital results (Djumalieva and Sleeman, 2018). This stems from the fact that some technologies, such as the Internet of Things, Big Data and artificial intelligence shall automate the majority of HRM processes, thanks to which the HR teams shall be more efficient and streamlined (Liboni et al., 2019).

E-HRM The fundamental changes that have been brought by IT have significantly changed the way in which firms run their business activities and this, in turn, has led to the changes in the documentation and procedures of management. For instance, in HRM a new wave of HR technologies has emerged, known as electronic HRM (E-HRM) (Hooi, 2006). The technology of E-HRM is the way of implementing the strategies, policies and practices of HR. The technology of E-HRM supports the functions of HR with the aim of satisfying the needs of the organisation in the sphere of human resources by means of the channels based on Internet technologies (Ruel et al., 2004). According to A. Bator, E-HRM is perceived as a system that offers the potential to improve the quality of services of the personnel department (both the employees and the managerial staff), while also enhancing efficiency and profitability within the framework of the personnel department, thus becoming a strategic partner in terms of executing the organisational goals. The aims of the implementation of E-HRM are as follows (Bator, 2010): ·· ·· ··

Improvement of the strategic orientation of HRM; Reduction of costs/growth in efficiency; Enhancement of the services for employees/facilitating work of management and employees.

The implementation of the solutions of HRM in organisations is of particular importance to the managers and specialists of HR for the purpose of the effective and efficient management of the work of employees, or the implementation of change in the organisation. They indicate the usefulness of this type of solutions, while also defining the ease of use, which in turn translates to the level of their job satisfaction, which is of key significance in terms of the approach to availing of E-HRM (Yuslizaa and Ramayah, 2012). The research conducted by E. Parry and S. Tyson indicates that E-HRM was implemented with the aim of enhancing efficiency, the provision of services, standardisation and the image of the organisation in order to strengthen the position of managers and transform HR into a more strategic function. The aims relating to efficiency, the provision of services and standardisation are commonly executed. Certain evidence was discovered

206  Izabela Stańczyk and Magdalena M. Stuss pertaining to the transformative impact of the E-HRM, as the employees of HR had more time and information in order to support the organisation in terms of achieving its business strategies (Parry and Tyson, 2011). The benefits of applying E-HRM according to Bator are as follows (Bator, 2010): ·· ·· ·· ·· ·· ·· ·· ··

Gradual implementation; Adjustment to a random client; Collecting information as the basis for making strategic decisions; Integral support for the management of human resources and all other basic processes of support within the framework of the organisation; Fast review of reports and analyses; More dynamic flow of work in the business process, productivity and satisfaction of employees; Decisive step in the direction of “an office without paper”; Lower costs of conducting business activities.

The implementation of E-HRM enables the complete integration of the particular systems of HRM – recruitment, training, appraisal, management of competencies, as well as a budget for each employee. According to M. Siam and S. Alhaderi, E-HRM plays a crucial function in strengthening the HRM framework by improvising the clarity and enhancing the stability of HR messages. It will also create an agreement of all the employees on the principles of HR practices that will be executed in the organisation. The findings of the study have also proved the argument that HR managers use E-HRM to validate the HR purpose by developing it into more of a professional function which will add to its visibility. The authors also suggest that in order to achieve a strong and quality-based HRM framework, you need to influence the utilisation of the electronic human resource management framework. Hence, the employees should be provided with the electronic human resource management framework where they can easily view the HRM activities that will generate an effective human resource management framework (Siam and Alhaderi, 2019).

Discussion Industry 4.0 has an impact on the way in which an enterprise should take account of HRM and the trends associated with the people diversifying the ways of adjusting recruitment, training, evaluation of the results and remuneration for employees in light of the external trends, such as technological changes and competitive strengths (Jackson et al., 2014). The ability to build networks, or resolve intricate problems associated with the innovativeness in enterprises are all derivative of the dynamically applied methods and techniques in HRM. The search for innovations that expanded by the socio-technical approach constitutes the basis for the structural process of the system of innovations by emphasising the multi-tiered aspect of this approach, consisting of three basic levels: Niche, regimes and panorama

Human resource management 4.0  207 or environment, in which the systems of innovation consist of the processes encompassing multiple entities (see the research of, among others, Geels, 2004; Carvalho et al., 2017). Social and technological aspects do not implement innovations separately. This perspective assumes that it is necessary to prepare new approaches to the qualifications integrated with the work and the instruments of learning the organisational methods, particularly in the sphere of digitisation. Technical innovations – the appropriate cyber-physical systems – not only facilitate communication in real time, while also transparency and cohesion between the hierarchical levels and the organisational boundaries, but also implement serious changes to the level of the workplace. These features may be used directly in order to have an impact on learning in the workplace (Schuh et al., 2015). For instance, cyber-physical systems may support the employees of the production line by offering new ways of collecting, processing and visualising the data processing (Hartmann, 2015), or business models such as the following: Crowdworking, mobile computing, open space, clean desk, mobile workplace or smart working (Freitag, 2016). Only qualified and well-educated employees shall be able to control these technologies and new technologies have an enormous impact on the level of education of the employees. Smart human resources 4.0 (SHR 4.0) is a new concept that is evolving within the framework of changes in 4.0 and is characterised by innovations in digital technologies, such as the Internet of Things, Big Data analytics and artificial intelligence, which are utilised for the efficient management of the employees of the new generation (Hecklau et al., 2016). Their implementation is caused by the change in expectations of employees with relation to their employers – cooperation in a given place or time, immediate feedback, open culture and decisions based on data (Sivathanu and Pillai, 2018). Such solutions facilitate the attraction, development and retention of talents, while also the efficient and faster operations of HR, automation of multiple processes of HR, as well as reducing the size of the HR team and ensuring HR departments have more time to play a strategic role in the organisation at hand (Angrave et al., 2016). One of the most influential challenges is that of social issues, including demographic changes, the qualifications of employees, digital skills and the acceptance of new technologies. Physical tasks shall be less significant in the future, whereas specialised knowledge in the field of new communication technologies in the spheres of planning, execution and decision-making processes, and also controlling or programming in the areas of errors and correction of errors, are becoming increasingly important. At the same time as the decreasing physical demands, greater mental stress (emotional and mental) is expected. On the one hand, this is caused by the constant change of work content, thus requiring increasing levels of flexibility and reactivity. On the other hand, this leads to emotional stress if the communication and cooperation between the employees are reduced by increasing the interactions between people and machines, or if the division of labour

208  Izabela Stańczyk and Magdalena M. Stuss does not stem from the superior, but from the technical system (Gabriel, 2016). Employees increasingly have to monitor automated equipment and the decisionmaking process must be decentralised as all the employees should participate in the engineering activities within the framework of intricate engineering (Erp and Seliger, 2016). A further problem is the availability of employees. The appropriate balance between professional life and private life is of growing significance (Simic and Nedelko, 2019). This is in accordance with the increasing flexibility of employees caused by changes in the organisation. However, it is necessary to set limits in order to restrict the constant availability of employees, so that the impact of professional life on private life is restricted. Furthermore, these processes are becoming increasingly intricate, which in turn leads to an increase in the number of workplaces with higher qualifications and a loss of workplaces that require lower qualifications. Hence, enterprises must qualify their employees for more strategic, coordinative and creative tasks with higher levels of obligations (Hecklau et al., 2016). In sum, with the challenges facing the area of HRM in times of the innovations of 4.0, it is necessary to state that the triggers here are the general social changes, as well as the economic and political changes, with particular mention of the following: ·· ·· ·· ··

··

Shortened cycle of the development, formation and implementation of innovations – wide-ranging innovative ability is becoming an essential factor in the success of a multitude of enterprises; Individualisation of approaches – both towards external clients and internal clients – is becoming the conviction of HR departments; Flexibility – in terms of applying the methods and techniques of HRM, both in entire enterprises, as well as in the individual processes; Decentralisation of decision-making procedures – a departure from the traditional and hierarchical organisational structures is taking place in favour of delegating authorisation downwards, while also the creation of hybrid structures that are adjusted to the specifics of entities; The efficiency of human resources – the implementation as a standard evaluation of the values of employees, both at the moment of their recruitment, as well as during their employment, which in turn causes the necessity of change in terms of acquiring, developing and retaining human resources.

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11 Competencies in times of innovation 4.0 Aneta Kuźniarska

Introduction The notion of innovations was introduced to economic science by J.A. Schumpeter, according to whom innovations are new or enhanced goods, new or enhanced methods of production, new markets for goods, new ways of purchasing and sales, the application of new raw materials and semi-fabricated goods, new organisation of work and also new methods of management, etc. (Schumpeter, 1960). Innovations not only constitute an element of benefits from the viewpoint of the organisation; their role is also to resolve problems facing society with the aim of making everyday life easier (Hero et al., 2017a). Innovations are acknowledged to be a key factor in the success of an organisation (Amabile and Pratt, 2016; Tidd et al., 2005), while the research conducted is testament to the fact that organisations that successfully implement and manage innovations achieve higher revenues and better financial performance than their competitors on the market (Bessant and Tidd, 2011; Pérez-Peñalver et al., 2012). The key to ensuring the organisation has efficiency, growth and constant development in rapidly changing and uncertain environments is that of the innovations of employees (Hammond et al., 2011), which are defined as the generation and implementation of new ideas, while also their popularisation in terms of expanding their own role, the role of the group or the entire organisation (West and Farr, 1990). They may also constitute both the roles assigned within the framework of their range of duties, or exceed beyond them (West, 2002). In the notion of the concept of an economy based on knowledge, it is not financial capital, but rather knowledge and constant innovations that are currently becoming the decisive factors of the success of enterprises. Innovativeness itself, in turn, constitutes the factor that is increasingly determining the economic processes occurring in contemporary economies. Amabile and Pratt (2016) ascertain that innovations at an organisational level are determined to a significant degree by the innovative endeavours of the employees and, as illustrated by research, it is they who constitute the factor that drives these innovations (Agarwal, 2014; Anderson et al., 2014; De Spiegelaere et al., 2016; Kör, 2016). This, in turn, constitutes the reason why organisations should pay attention to the innovative behaviour of their employees. DOI:  10.4324/9781003184065-11

214  Aneta Kuźniarska The innovative behaviour of employees, or the gradual change in the broad perception of employee competencies is, on the one hand, determined by the constant development that arose from the German concept of Industry 4.0. (Issa et al., 2018), while on the other hand, innovative projects are the driving force of the changes implemented in the aforesaid concepts. In order to follow the transformation that has been evoked by the fourth industrial revolution, there must also be a change in the approach to employee competencies, while also greater flexibility as regards changes in competencies and the necessary skills and knowledge within their framework. All three elements encompassed within Industry 4.0, namely (1) the Internet of Things (IoT) (Ashton, 2009) and CPS systems (cyber-physical systems), (2) analysis and use of Big Data (Jin et al., 2015) and (3) communications infrastructure (information and communication technologies – ICT) (Woźniak and Wereda, 2018), require the creation of the appropriate competencies both on the part of the employee and the organisation itself. Integration of technologies, industry and digitisation (Glass and Kleeman, 2016) creates the necessity for a constant, comprehensive and professional formation of the area of competencies. This does not merely relate to the effect of substitution or complementarity of work (Borjas, 2003). The vision of an organisation as defined by Industry 4.0 forces companies to be constantly ready for innovativeness creativity and simultaneously changes, not only in terms of the manner of manufacturing goods and providing services, but also the management of them. Hence, the aim of this chapter is an attempt to define the competencies of both the organisations themselves and also the competencies of the employees, which are essential in terms of competing in conditions of the development of the technical and technological processes of work.

Competencies of organisation 4.0 The definition of the innovativeness of an organisation is perceived to be the internal tendency to generate and/or adopt innovations, while also the readiness to undertake risk associated with the implementation of change, as well as new notions, concepts, ideas and inventions (Pichlak, 2012). As illustrated in the literature on the field of management, innovativeness is a constant process (Damanpour and Schneider, 2006) in which participation is conditioned by both external and internal factors. Regardless of whether innovation is the result of the generation or adaptation of innovations, this is a new concept for organisations that requires specified competencies both on the part of organisations and the employees. Likewise, it is also worth drawing attention to the fact that the particular stages of the lifecycle of an organisation force the adjustment to changes in the competencies held (Chodyński, 2008). The competencies of an organisation have a greater level of generality than the competencies of employees, though on the one hand, they should be cohesive, whereas on the other hand with regard to their own specifics, they should constitute an independent set of competencies (Moczydłowska, 2008). It is possible to enumerate financial competencies, as well as technological, managerial, staffing,

Competencies in times of innovation 4.0  215 organisational and market competencies (Komorowski, 2001). It is important that as a result of this, these competencies shall provide the organisation with the ability of the conscious building of its market position (Strużycki, 2002a). Szymura-Tyc (2002) also defined this as “the ability to coordinate the engagement of tangible and intangible resources, including abilities, skills, and knowledge for the accomplishment of the aims of the organization.” In turn, Oleksyn (2006) indicates that there are competencies which the results of the organisation depend on, namely the following: ·· ·· ·· ·· ·· ··

Managerial competencies; Employee competencies; Knowledge and collective memory; Competencies derived outside the organisation, such as patents and licences; Competencies in the sphere of technology and products; Social competencies.

Other authors add a set of logistical and cultural competencies to this list (Długosz, 2006), which is particularly visible in small and medium-sized enterprises that are embedded in the cultural traditions of the local environments where they function (Strużycki, 2002b). The prerequisite of the efficient and effective operations of an organisation is the creation of such a combination of competencies that would allow for the acquisition of a competitive advantage and the creation of its innovative potential from a long-term perspective. The creation of the model of competencies in organisations would seem to be appropriate for this purpose as it is a descriptive form of the characteristics of the competencies required in order to achieve satisfying or benchmark results for a specified work position in a specific team, organisational cell or organisation (Dubois and Rothwell, 2008). One of the significant factors that lead to the creation of the innovative potential of an enterprise is the innovative ability of the employees, whose behaviour and features constitute the core of organisational innovations (Patterson et al., 2009). This innovativeness refers to the process of providing new ideas, or manufacturing new products as a response to the problems and difficulties encountered in the work process by means of observation, while also utilising knowledge and years of experience as a result of working in the field (Yuan and Chai, 2020b). The innovativeness of employees is evaluated with the aid of Janssen’s nine-element gauge (Janssen, 2000), which encompasses three subscales as follows: Generating ideas, promoting ideas and executing ideas. The essential elements for the creation of the innovative potential of an organisation is also indicated as knowledge, creativity and creative output. From this perspective, they constitute the composite elements of the competencies that lie on the part of the employees (Dewicka, 2013; Batra and Vohra, 2016). In order to conduct innovative activities, enterprises avail of potential that is perceived to be the resources of opportunity and innovative abilities in the creation, implementation and management of innovations. One of the elements of innovative potential is that of the internal resources of a firm, whereas another

216  Aneta Kuźniarska

Figure 11.1  Innovative potential of an enterprise. Source: Own analysis on the basis of the following: Żołnierski, 2005; Bessant and Tidd, 2011.

constitutes the possibilities (skills, competencies) of availing of these resources (Białoń, 2010). Żołnierski (2005) defines the innovative potential of an enterprise as the result of the internal connection of the internal potential with the external sources of innovation (see Figure 11.1). Of the factors stimulating the innovativeness of enterprises and innovative behaviour, it is possible to list the following: 1. Organisational culture that encourages risk-taking and creativity (Bilton and Cummings, 2010); 2. Staffing policy and staffing practices (Borkowska, 2010); 3. Open communication; 4. Organisational structure deprived of bureaucracy and any type of leadership (Jafri, 2012). The prerequisite of the success of the organisation on the market is that of innovativeness that is not merely perceived as an incidental event but as the development of new competencies and the undertaking of new activities from a long-term perspective.

Innovativeness and competencies of employees The fourth industrial revolution constitutes a challenge for owners and managers, both in terms of whether it comes to the workplace or to the employees. Employers

Competencies in times of innovation 4.0  217 are constantly searching for new competencies, while also wanting to attract, recruit, engage, reward and retain employees that display an entrepreneurial approach and readiness towards innovation (Rasca, 2017). Nevertheless, it is worth drawing attention to the fact that the prerequisite for the efficient and effective creation of competencies of an innovative nature is to have the basic competencies of a universal nature at their disposal, which shall be described in this section. Competencies are a testament to the knowledge, skills and attitudes in specified activities, tasks and contexts (Mulder, 2012), while also personal features and behaviour that are essential for the effective fulfilment of the role played in the organisation and support of the firm in terms of achieving its aims (Kupczyk and Stor, 2017). According to the European Parliament (2009), competencies signify the ability to apply knowledge, skills and personal abilities, as well as social or methodological abilities that are utilised at work, in science, in professional and personal careers which are defined in terms of categories of responsibility and autonomy. The definition of competencies prepared by the OECD within the framework of the project called DeSeCo describes competencies as “the ability to effectively fulfil the individual or social requirements, or to execute activities or tasks” (OECD, 2002). The term competency is used in various meanings and functions and from this point of view we may distinguish professional competencies, workplace and employee competencies, as well as the competencies of the organisation, empowerment, interpersonal, expert and useful competencies, while also pro-development and social competencies (see Table 11.1). It is also possible to carry out their classification in accordance with two dimensions as follows: as professional and personal competencies, or conceptual and operational competencies (Winterton, 2009). Widely executed research relating to competencies and the factors shaping them has facilitated the emergence of the Great Eight Competencies that include the following (Bartram, 2005): 1. Leadership and decisiveness – taking decisions, responsibility, delegating tasks, coaching, developing subordinates; 2. Supporting and cooperation – building the team spirit, listening, empathy, supporting others; 3. Interaction and presenting – resolving conflicts, exerting impact, negotiating; 4. Analysing and interpretation – communicating on paper, evaluation, provision of solutions; 5. Creation and conceptual thinking – learning, gaining information, searching for and implementing change; 6. Organisation and execution of plans – planning, organising and managing time, while also concentrating on the needs of clients and striving towards results; 7. Adaptation and coping with stress – positive reaction to change, coping with pressure, maintaining balance between work and private life; 8. Entrepreneurship and execution – accomplishment of aims, ambition, controlling costs.

218  Aneta Kuźniarska Table 11.1 Basic competencies Category/type of competencies

Characteristics of competencies

Professional com- •• the formal right to act on behalf of a particular organisation with petencies regard to specified issues and to take decisions in a specified field •• ability to execute certain actions on behalf of the organisation as defined by law •• confirmed by certificate, diploma, agreement, etc. •• enshrinement, or in internal documentation of the organisation Workplace com- •• scope of authorisation, obligations and responsibilities of an petencies employee assigned to the particular work position Employee compe- •• professional skills tencies •• general knowledge that an employee has at his/her disposal •• ability of interpersonal communication, motivation, teamwork •• formal authorisation, while also other aspects that render the execution of work in a particular position possible Pro-development •• potential that lies in an individual which leads to the fulfilment of the competencies requirements associated with the particular work position, which in turn has an impact on the desired results of the organisation •• sum total of employee features, such as the following: Knowledge, aptitude, style of operation, personality features, principles and values, scope of interest, whose utilisation and development lead to the results that are in accordance with the assumptions of the firm at hand Empowerment •• features and authorisation of employees and the organisation, competencies whose utilisation and development in the process of work serve the accomplishment of the aims of the organisation, while also being cohesive with the personal aims of the employees Professional and •• specialised knowledge, skills and also behaviour and attitudes in interpersonal effective and correct communication competencies •• cognitive horizons, well-controlled professional skills •• social skills developed that facilitate flexible cooperation with other employees Useful competen- •• skills and experience acquired over time, which are evaluated through the prism of their application in the practical functioning cies (resultof the organisation based) Dynamic compe- •• employee features and interactions emerging between the internal tencies and external personal factors and the conditions prevailing within the organisation and its environs •• processes of integration, reconfiguration, acquiring and implementing resources aimed at adjusting the enterprise to market changes, or provoking such changes •• skill of rapid renewal of competencies that facilitate adjustment to changes in the environment, which is concentrated on integration, renewal and transfer of resources controlled by the enterprise Personal compe- •• encompass the motivation of employees, their attitudes and social tencies values Social competen- •• features that condition the effectiveness of the functioning of the unit cies •• intricate skills that condition the effectiveness of emotional regulation and coping with various types of social situations Source: Self-analysis on the basis of the following: Ocieczek, 2012; Adler et al., 2017; Eisenhardt and Martin, 2000; Kreft, 2012; Borkowski, 2003; Oleksyn, 2006; Matczak, 2001; Gajdzik, 2013; Hecklau et al., 2017.

Competencies in times of innovation 4.0  219 Classification of competencies may take place in accordance with the following criteria (Walkowiak, 2007): ·· ·· ·· ·· ·· ·· ·· ·· ·· ··

Source of acquisition of competencies (formal and actual); Scope of merit (narrow and broad); Availability (own organisation and that gained on the principle of the availability provided); Destination (general, common for all employees and specialised staff); Time perspectives (current and anticipated); Width of impact (narrow – necessary for work position – and broad – necessary in social environment); Measurability (easy or difficult to measure); Ownership (individual and group); Content (professional, social, business, conceptual); Precision of definition (defined in a general or detailed way).

The list of basic competencies, whose detailed characteristics have been presented in Table 11.1., has been supplemented in subsequent sections of this chapter by competencies defined in subject-related literature as innovative, while also searching for features that are distinctive among the various categories of competencies.

Innovativeness and innovative competencies of employees The fourth industrial revolution associated with the far-reaching automation of processes both in industry and in services requires competencies that distinguish the work of an individual from the work of IT systems, robots or artificial intelligence. This may be divided into three groups as follows: Digital, technical and cognitive-social. In the conditions of the revolution of 4.0, they are of significant importance and enable the organisations to place emphasis on the knowledge of employees which generates innovative and creative solutions. They strive towards the search for and use of knowledge in the enterprise not only for the execution of the tasks and functions assigned but in the search for original solutions to a great extent, while also coping with problems and indicating ways for the better functioning of the firm. This knowledge becomes their innovative potential, namely, it provides them with the ability to design and implement innovations (Gajdzik, 2012). According to Penc (1997), innovative competencies constitute a certain type of ability to become familiarised with new methods, processes, products or ideas at work, while also in private life. They define the creative potential and the way of behaviour of people in situations associated with learning new things and requiring the creative solution of problems. They relate to knowledge, skills and attitudes (Zhuang et al., 1999), albeit the impact of their individual features would seem to be significant (Da Silva and Davis, 2011). These competencies are to a large degree dependent on the level of involvement in work, which in turn reflects the internal motivation of individuals (Schaufeli and Bakker, 2004).

220  Aneta Kuźniarska Table 11.2 Chosen definitions of innovative competencies Author and year

Definitions of innovative competencies

(Śmid, 2000)

•• behavioural skill of employees in innovative situations •• skill of rapid learning and solving new problems •• originality of thought

(Matusiak, 2008) (Gajdzik, 2013)

(Peschl et al., 2014) (Yuan and Chai, 2020a)

Development of innovations occurs by means of developing employee competencies. •• feature of employee that defines his/her attitude towards change, namely the tendency and ease of reaction to the existing reality and replacing it with a new and better solution •• knowledge, experience, skills and predisposition of employees generating innovative attitude •• speed of learning and skill of resolving problems •• actions that initiate and implement changes to the functioning of the organisation •• inspiring others to change by means of individual leadership, teamwork and full involvement •• set of personal features, knowledge, skills (or abilities) and attitudes associated with creating specific and implemented novelties by way of cooperation in intricate innovative processes. •• using observation, knowledge and experience accumulated during work in the process of providing new ideas, or creating new products as a response to the problems and difficulties encountered at work

Source: Self-analysis.

As in the case of other competencies, innovative competencies are also possible to learn and develop (Peschl et al., 2014). As indicated in Table 11.2, the definitions of innovative competencies in subject-related literature over the years in terms of the notions of various authors have not differed from each other in a significant manner and essentially encompass three main components of competencies: Knowledge, skills and experience with emphasis placed on the skill of rapid thinking and resolving of problems. From the viewpoint of innovations, not only are the competencies of frontline workers important, but also those of managers. A key factor in determining the innovations of employees would seem to be that of participatory partnership, which by means of the positive relation with the involvement of employees strengthens the innovative approach of the employees (Rosing et al., 2011). Additionally, if the innovative behaviour is advocated by the representatives of top management, it may become a constant element in the behaviour of the employees in the long term. Innovative behaviour constitutes the process that consists of a multitude of stages and to a large extent involves the generation, promotion and execution of a new or improved idea that is to lead to the achievement of an aim by the organisation (Janssen, 2000). It is assumed that innovative

Competencies in times of innovation 4.0  221 behaviour is advocated by the managers, or that the concept of pro-innovative thinking may become a constant element of the behaviour of the employees from a long-term perspective. The innovative competencies of employees in their own essence combine in various forms of knowledge, personality features and functional and interactive skills (see Table 11.3) in order to lead to innovative behaviour in practice. Elements of the innovative competencies illustrate a certain type of ambiguity, which results from the possibility of moving between exploring the possibilities and generating the ideas, while also implementing and utilising the ideas (Bozic Yams, 2017). In organisations where building innovative competencies is perceived in the category of the way of thinking and operating in the everyday work of the employees, the results in the form of innovations that take on various forms are becoming visible. In addition, individual employees develop their own innovative practices by learning and experience in everyday work, while also by means of developing the elements of innovative competencies that would seem to be essential in the context of the work executed and completed in the organisation. By consequence, they constitute the dynamic concept that undergoes change over time thanks to practice and science (Bozic Yams, 2017).

Creativity, creative output, talent and digital competencies in Enterprise 4.0 Some authors note that innovativeness cannot be achieved without creativity (Trias de Bes and Kotler, 2013) and creative output (Dewicka, 2013), while the vision assumed by Industry 4.0 forces the constant readiness for innovativeness, creativity and simultaneous changes in the way of manufacturing goods and their management. Creativity is acknowledged to be the process in which the development and expression of novel ideas take place in order to satisfy the specified needs or resolve specified problems (Luecke, 2003; Ng and Feldman, 2013). It constitutes the initiator (starting point) of the innovative process in terms of testing the possibilities of implementing ideas generated at the level of creativity (Baer, 2012) that are in effect aimed at leading to the entrepreneurship of the organisation, defined by P. Drucker as systematic innovation or ability to create innovation (Drucker, 2014). In addition, Baer (2012) claims that creativity is not only generating the ideas alone – these ideas must fulfil the criteria of novelty and usefulness. Amabile (1997) defines the following variables conditioning the creativity of the employees: 1. Specialised knowledge within the framework of technical, procedural and intellectual, while also the appropriate talents; 2. Skill of creative thinking and the ability to generate new ideas, including the tolerance of contradictory solutions; 3. Internal motivation in terms of the execution of tasks combined with personal interests.

222  Aneta Kuźniarska Table 11.3 Elements of innovative competencies Innovative competencies At employee level Specialised knowledge, professional experience Technical ability Analytical thought and making conclusions Communicativeness and openness to change Skill of working in a team, interpersonal skills Functional and operational efficiency, Operational conceptualisation (functional) At managerial level Innovative leadership

Characteristics Knowledge that facilitates the execution of work in a given work position, which is sometimes supported by professional experience over time Specialised knowledge, experience and effectiveness in operating things Skill of analysing situations and formulating rational solutions to a problem Ability to communicate within the organisation, as well as its environs, intelligibility of the message, openness to changes, skill of listening to interlocutor and empathy Skill of cooperating with people, ease of making interpersonal contacts and stimulating the desire in them to initiate and implement innovations Skill of executing assigned functions, tasks, reliability and consciousness of the obligations executed Originality of thought that translates to the skill of resolving problems and creating changes of a functional significance, while also process, operational, organisational and methodological significance, etc.

•• motivating others towards change •• being an example to others in terms of high-quality work, while also involvement in the functioning of the firm Participatory leadership •• creating an environment that facilitates having an impact on the organisation •• voluntary and novel contribution to the development of the organisation via innovations •• lack of upper control and orders to adhere to principles Orientation towards the •• vision future •• openness to new experiences •• curiosity •• ability to take risk Skill of talent management •• development of talents of high potential •• systematic identification of key talents that lead to the building of the competitive advantage of the organisation •• inclusion of all employees in the strategy of talent management Skill of project management Skill of managing the process of creating knowledge based on cooperation combined with the skills in the sphere of research and development Strategic conceptualisation Originality of thought that translates to the skill of resolving problems and creating changes of strategic significance for the firm (Continued )

Competencies in times of innovation 4.0  223 Table 11.3 (continued) Elements of innovative competencies Innovative competencies

Characteristics

Organisational efficiency

Familiarity with and application of the principles of the efficient organisation of work and modern organisational techniques and also maintenance of the ability of rational action Imagination, resourcefulness, the skill of generating new non-standard solutions Availing of knowledge and its adjustment to the workplace and specific problem, the consistency of searching, openness to ideas, broad perception of problems, abundance of new ideas Efficient and effective management of the firm, coordination of various groups and teams, etc. Skill of identifying the source of mistakes, streamlining the processes independently and in teams Skill of diagnosing the needs of a client Skill of thorough planning of action and persistence in executing actions Orientation towards the aim and its accomplishment, while also value and ambition

Creative thinking Creativity

Administering Comprehensive solution of problems Customer focus Determination Involvement

Source: Self-analysis on the basis of the following: Gajdzik, 2013; Nawrat, 2013; (Springer, 2013; PARP, 2019; Hero et al., 2017; Rosing et al., 2011; Swailes et al., 2014; Huang et al., 2010.

Creativity is the skill of adjusting all three of the aforesaid elements to resolve the newly emerging problems, which signifies that this is not a unique feature of only the chosen employees, but may also be learnt and attempted in a completely conscious manner to build and in time develop competencies in this sphere (Epstein, 2000). Creative competencies signify the necessity of constant learning in terms of both the patterns of activity and the ways of acquiring and transferring knowledge (Morawski, 2004). In terms of this issue, a particular role is played by the managers and their skills, which Steiner and Weber (1993) enumerated as follows: ·· ·· ·· ·· ·· ·· ··

Skills enabling the generation of ideas over a short time period; Searching for new and original solutions and ideas; Creation of novelties; Skill facilitating the most optimal choices of solutions to be made at a particular moment; Persistence and consistency in the fight against difficulties; Regularity, efficiency and vigour in operation; Tolerance and respect for contrasting views;

224  Aneta Kuźniarska

Figure 11.2   Relation of creativity, creative output and innovativeness. Source: Own analysis.

·· ·· ··

Courage and openness to criticism; Independence of mind when expressing opinions; Motivation to action.

Relations and dependencies occurring between the notions of creativity, creative output and innovativeness were characterised as a certain type of process (see Figure 11.2) – from creativity as individual competency and the connected activities and behaviour, namely creative output, to the final effect perceived as the possibility of applying solutions (Drozdowski et al., 2010). In practice, this signifies the fact that the innovativeness of employees encompasses a broader range of behavioural traits than creativity alone (Parzefall et al., 2008). The aforementioned competencies that are important from the viewpoint of innovativeness are supplemented by some authors with talent that is perceived through the prism of employees with outstanding abilities and great efficiency and those who have a significant impact on the current and future performance of the organisation (Collings and Mellahi, 2009). Others indicate that talent constitutes the result of the combination of competence × commitment × contribution (Ulrich and Ulrich, 2010). An important role in these times of Industry 4.0 is also played by the competencies associated with digitisation. Research conducted in this area illustrates that to a large extent technological accomplishments have an impact on the change of requirements with regard to the labour force, while also in terms of the issue of the skills of availing of ICT technologies at the workplace (Ifenthaler, 2018). It is indicated that digitisation and its constant development over a wide scale is determining the formation of constantly new requirements relating to the labour force (National Research Council, 2012). Digital competencies encompass skills in the sphere of availing of integrated society technologies (IST), thus all skills necessary for science, work, development and participation in social life (EC, 2006). Their framework encompasses the abilities to avail of digital media and ICT technologies (including successful communication), as well as understanding the principles of utilisation and critical evaluation of various aspects of the media (Ala-Mutka et al., 2008). Digital competencies cannot, however, be solely defined in a narrow scope that merely encompasses the skill of availing of software and hardware based on IT technologies,

Competencies in times of innovation 4.0  225 such as a personal computer, laptop or tablet (Vieru, 2015). Digital competencies are a set of knowledge, skills, attitudes and awareness that are required in the use of ICT and digital media for the execution of various tasks. Their composition includes the following: Resolving problems, communication and cooperation, management of information, ethical behaviour and responsibility, learning, creating and providing access and knowledge that are essential at work and in private life (Ferrari et al., 2012). In contrast, Vieru (2015) made an attempt to define these competencies solely in an organisational context by describing them as the ability to adopt and utilize new, or existing IT technologies for analysis, choice and critical evaluation of the digital information with the aim of research and resolving the problems associated with work, as well as the development of cooperation based on knowledge, while becoming involved in organizational practices in a specified organizational context. Livingstone (2003) notes that the digital competencies are not always dependent on the user, but frequently on the tools available, albeit Damasiotis et al. (2015) indicate that they are currently evolving in the direction of competencies of various types that do not necessarily directly refer to IT systems, but are rather essential in terms of performing a specified task. Within the framework of digital competencies, there are issues associated with digital networks, digital security, coding competence and process understanding (Hecklau et al., 2017).

Management of competencies in Enterprise 4.0 The researchers emphasise the great significance the appropriate management of human capital has in terms of innovations (López-Pueyo et al., 2018; Nieves and Quintana, 2018), which in turn, from the viewpoint of the management of innovativeness, appears as the need for the management of competencies for innovation. Moczydłowska (2018) indicates the synthetic notion of the aims of the management of competencies by dividing them respectively into the competencies of individuals (employee), of the organisation and in general terms. In the general sphere, the aim should be to ensure such competencies that shall be the guarantee of high-quality work and life, while also the development of both social and economic spheres by means of their adjustment to the changes occurring. In the case of the competencies at the level of the organisation, they should ensure the achievement of competitive advantage and a high level of efficiency. From the viewpoint of employee competencies (individuals), the aim should be such a development of them that would facilitate the execution of professional work in a satisfying manner with the simultaneous fulfilment of all needs. As indicated by Verburg et al. (2007), the aim of HRM should be to stimulate the behavioural results in the form of the engaged attitudes and behaviour of the employees that are oriented towards cooperation and partnership. The involvement of the employees alone may indicate the relation with the individual results

226  Aneta Kuźniarska

Figure 11.3  Set of necessary competencies in innovations. Source: Own analysis.

achieved by the employees, while also consequently the results of the organisation as a whole (Armstrong et al., 2016; Sofian, 2016; Chhetri, 2017). Dubois and Rothwell (2008) emphasise that the prerequisite of efficient and effective operations of an organisation is the creation of a combination of competencies that match the current needs of the organisation, thus the outlining of the principal framework of competencies is becoming an important factor in the management of competencies. The characteristics of competencies presented reveal that the competencies prevalent in Industry 4.0 consist of a wide range as follows (see Figure 11.3): ·· ·· ·· ··

Basic, primarily associated with the role fulfilled at the workplace; Innovative employees; Innovation that is attributed to the managerial staff; Innovation that is common for all employees and managerial staff which are significant from the viewpoint of innovativeness, regardless of the type of position held in the organisation.

Stuss (2020) emphasises that in the practice of managing enterprises there is growth in the significance of employee talents which confirms the increasingly normalised occurrence of programmes of talent management. Within the framework of the organisation, employee talents encompass features that guarantee the

Competencies in times of innovation 4.0  227 accomplishment of exceptional results at the work stations, particularly in innovative areas and groundbreaking discoveries for which initiative, intuition, creative thought and involvement are of great significance (Jabłoński, 2015). People of multiple talents should be appropriately managed from the perspective of not only innovativeness itself but the skill of advocating changes in a broader perspective (Giebels et al., 2016). It is necessary to remember that the competencies of employees of a specified potential are shaped as a result of the integration of knowledge and skills, while also experience, both those in terms of the future and in current times. Hence, an important role is played by such management of human capital in an organisation that places emphasis on the development of employees and their competencies, while facilitating the organisation to grow.

Conclusions As indicated by research conducted by analysts from the McKinsey company (Bughin et al., 2018) and presented during the World Economic Forum (2018), by 2030 there shall be significant growth in significance of the technical and digital competencies, while also social and higher cognitive competencies, while also creativity and the skills of resolving intricate problems. All of the aforementioned competencies are perfectly compatible with the sets of innovative competencies described in this chapter. In the report by the OECD entitled The Future of Education and Skills: Education 2030 (2018), an additional three “transformative competencies” have been distinguished, which are and shall be of key significance in the future in terms of being innovative, responsible and conscious: 1. Creation of new values based on innovativeness, the skills of adaptation, creativity, curiosity and openness of mind; 2. Reconciliation of tension and resolving issues of dispute with taking the interests and values of others into account; 3. Broad perception of responsibility based on intellectual and moral maturity. Building innovative competencies in organisations of 4.0 does not only have an impact on the increase in their level of competitiveness. It is assumed that by means of a skilful evaluation of the innovative competencies, the general activity of an enterprise is assessed in the sphere of innovativeness, including, among others, in which sphere all the elements of the enterprise, the processes occurring there, as well as the corporate culture have an impact on the transformation of innovations in terms of achieving the ultimate aims.

Discussion The subject of the innovative competencies of employees gives rise to a multitude of questions associated with first and foremost the attempt to adjust them to the

228  Aneta Kuźniarska constantly changing environment. This may be exemplified by the issue currently raised in the international scene, namely sustainable development, which also translates to the area of Industry 4.0. The issue of sustainable development (environmental innovations) relates to the new products and processes whose task is to avoid or mitigate the environmental impact (Hellström, 2007) which are a challenge for organisations as they not only strive towards gaining profits, but also have a social mission (Di Domenico et al., 2009). From the point of view of competencies, it is necessary to answer such questions as what competencies in this sphere organisations should have and what competencies should be sought after among employees and in what way and on what cornerstones they should be built. Similar questions refer to digital competencies. Despite the fact that subjectrelated literature touches on the issue of these competencies, they are still inaccurately defined and to a large extent depend on the organisational context. This may be the result of the multi-disciplinarity of the subject of digitisation which is not possible to attribute to any singular field of research, or with regard to the rapidly changing nature of the specific digital competencies.

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Part 6

Knowledge and innovation





12 Ecological innovations Agnieszka Thier

Introduction Ecological innovations, referred to in Anglo-Saxon literature as environmental innovations, are also called environmentally friendly innovations. Sometimes they are identified with environmental or pro-ecological technologies, but this is wrong since ecological innovation is a broader concept also considering economic and social aspects. Ecological innovations, in short, eco-innovations, are – like social innovations – a relatively new term compared to other types of innovation. What is more, they have quite a lot in common with social innovations whose specificity, however, is different and focuses on changes in collective benefits and services as well as customs and lifestyle – in order to support, most of all, people with disabilities, the sick and the elderly.

Definitions of ecological innovation The first definitions of ecological innovation already stressed that it was supposed to bring benefits to both entrepreneurs and the environment, including consumers, as a result of reducing the negative impact of production and service processes on the natural environment (Fussler and James, 1996, p. 364; Kanerova et al., 2009, p. 7). In the economic literature in Poland – like in foreign literature – there are various ways of defining ecological innovation. For instance, one of the authors states that it is the activity of economic entities, political and social organisations and households aimed at intensifying and modernising projects protecting the natural environment and supporting ecological factors of balanced and sustainable development (Urbaniec, 2014, pp. 86–93). It is, therefore, a broad approach from the viewpoint of a range of entities undertaking innovative activities, i.e. innovators. In turn, other authors stress that the essence of ecological innovation consists of environmental protection covering the stages from product design and manufacture to the final phases of its life cycle – including waste rates and recycling – as well as influencing consumers and the society in a more pro-ecological spirit (Rutkowska and Pakulska, 2018, pp. 126–133). Similarly, ecological innovation in documents of the European Commission is considered to be any innovation that creates opportunities for enterprises and brings benefits DOI:  10.4324/9781003184065-12

238  Agnieszka Thier to the environment as a result of limiting the impact on the environment and rational use of resources (European Commission, 2014, p. 2). Please note that some publications present several definitions of ecological innovation (Woźniak et al., 2003, pp. 6–9; Brouqier, 2018, pp. 33–34). To sum up, the purpose of eco-innovation is to limit the negative impact of production and service activities on the natural environment, especially by reducing and eliminating pollutant emissions, and rational and socially responsible use of its resources. Owing to this, enterprises become more eco-friendly and stand against the challenges faced by the civilisation concerning depletion of mineral resources, water deficit, biodiversity loss and climate change – as well as corporate social responsibility (CSR) – while at the same time they achieve economic benefits in the form of cost reduction and more effective marketing, which increases their competitiveness on the market. In the period of formation of the factory industry, actions of entrepreneurs on the market were production-oriented, then sales-oriented (promotional) and, finally, marketing-oriented. At the turn of the 20th century, social orientation comes to the fore (Stanton, 1978, p. 11; Zaremba, 2004, pp. 102–134). The issues of corporate social responsibility also include ethical and cultural context. All this makes ecological innovations a crucial factor in the company’s development strategy and an element of the concept of sustainable development or green economy. Breakdown of ecological innovations into types is carried out according to various criteria, but the subject criterion is taken into account most often. The term “eco-innovation” refers to all other forms of innovation, such as technological, product, marketing and organisational innovations that increase the effectiveness of protective activities and the so-called eco-efficiency of business activities, for instance, productivity of material resources, energy and water consumption of industrial, construction, agricultural production and municipal services. Such activity manifests itself in moving away from the “end of pipe” technology, e.g. sewage disposal to a sewage treatment plant, towards integrated (waste-free) technology and investment and solutions such as “circular economy” with its simple and fragmentary yet very important example – closed water cycle in the enterprise, or a more difficult type – in the city. Before we tackle the issue of eco-innovation measurement, we are going to distinguish the following types of eco-innovation: ··

·· ·· ··

Technological eco-innovations (process innovations) – new or significantly changed production methods, including the use of the best available technologies (BAT), improved methods of supplying materials and components, and distribution of finished products and services, implementation of new biotechnologies and nanotechnology; Product eco-innovations – new or modernised products and services, e.g. products with longer service life, easy to repair (with repair instructions attached), energy-saving household items; Material flow eco-innovations – closed circuits and reuse of raw materials; Marketing eco-innovations – changes in positioning, packaging and  promotion of products, ecological product labelling, pricing according to

Ecological innovations 

··

·· ·· ··

239

ecological criteria, discouraging clients from buying non-ecological products (antimarketing); Organisational eco-innovations – introduction of an environmental management system, including ISO 14001 standards and ecological audit EMAS, as well as e.g. in food production (ISO 22000 – food health security system and HACCP), consideration of ecological aspects in the development strategy and in the organisational culture of the enterprise, new ways of monitoring the state of the natural environment; Social eco-innovations – new programmes of ecological education and consistent compliance with healthy consumption patterns and habits, pro-ecological behaviour in various circumstances; Institutional eco-innovations – appointment of new organisations and teams, co-operation platforms, clusters and networks to deal with environmental issues effectively; Service eco-innovations – (specific and usually separated from product eco-innovations) such as eco-buildings, climate mortgages, eco-leasing of energy-efficient devices, special water and sewage services.

Of course, all the types of eco-innovation mentioned should stand out with minimising the negative impact of implemented projects on the natural environment or other beneficial ecological features (Węgrzyn, 2013, p. 141; Brouqier 2018, pp. 35–36; own study).

Measurement of eco-innovation level Measurement of eco-innovation level, that is, measurement and assessment of the scale of innovation in the protection of the natural environment, turns out to be a complicated matter due to the variety of conservation projects undertaken, and the difficulty of recognising their final effects in quantitative, and especially monetary, terms. Although science has already made great progress in building the theory of valorisation of environmental components and practical valuation methods (or value estimation), environmental values and effects of conservation projects that have been considered immeasurable so far (Mitchel and Carson, 1990; Sulejowicz, 1991; Winpenny, 1995; Żylicz, 2014), usually only a microeconomic calculation of the economic effectiveness of protective investments, and more rarely of the so-called external (social) effects (results), is carried out at the enterprise level. This requires proper research which generally goes beyond the obligations and capabilities of the enterprise, not to mention the cases implying legal provisions (e.g. applying for a grant from the National Fund for Environmental Protection and Water Management). There are several categories of measures and areas of research on an ecological innovation level. These measures include ones characterising the state of the environment, the protective activities in the country and in the region because their change in time also informs about the development of innovation in this field. The literature already provides a large number of measures divided into

240  Agnieszka Thier specific groups (Tundys, 2015, p. 789) but, in our opinion, they have been classified according to unclear criteria so we will use a different division: ·· Manifestations and forms of activities for eco-innovation: ·· The number of people working in environmental protection, including in the R&D area, and their share in total employment in the economy, including in the R&D area in total; ·· Percentage of enterprises having a long-term strategy and environmental protection scheme (their share in the total number of enterprises or enterprises onerous to the environment in percentages); ·· Percentage of innovative enterprises; ·· Percentage of enterprises with ISO 14001 and EMAS certificates; ·· Demand for eco-innovative devices and products; ·· Frequency of entering the market by companies offering protective devices and other pro-ecological solutions; ·· Average number of ecopatents annually and per 1 million residents; ·· Number of graduates of academic courses related to environmental protection with a master’s or PhD degree; ·· Number of scientific publications concerning eco-innovation per 1 million residents; ·· Number of scientific conferences and their participants per year. ·· Economic outlays related to environmental protection: ·· Investment outlays and current costs of environmental protection and possibly water management, as well as their selected types, and their share in investment outlays in the national economy in total and in the GDP in percentages, as well as per capita in PLN; ·· Research and development expenditures in environmental protection and their share in total R&D expenditures and in the GDP; ·· Expenditure on integrated investments in environmental protection and their participation in total investment expenditure in environmental protection; ·· Share of investment expenditures on environmental protection in the GDP in international comparisons. ·· Financing of eco-innovative activities: ·· Structure of financing sources of environmental protection and water management (separately), including own funds, ecological funds, bank loans, funds from the central budget and local government budgets and other funds (in percentages); ·· Financial support from public programmes and their material effects; ·· Government expenditure and enterprise expenditure on R&D, and the relationship between them. ·· Effectiveness and efficiency of eco-innovations: ·· Greenhouse gas emissions and their dynamics in relation to the GDP and per one resident; ·· Energy and water consumption of industrial and agricultural production, communal services, as well as national income (GDP);

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Productivity of fixed assets, materials and energy measured with the relationship of the GDP and values of assets, material consumption and gross primary energy use; ·· Share of exports of innovative products in total exports (especially in exports of industrial products); ·· Synthetic indicators, such as ecological footprint, the Living Planet Index, resource consumption of products and services, environmental assessment of the product life cycle, ERPA matrix, eco-innovation tables and indexes and synthetic measures of people’s quality of life. Social aspects of eco-innovation: ·· Opinions about severity and transparency of environmental protection law; ·· Knowledge of managers and ordinary employees, and social awareness of environmental protection and eco-innovation according to surveys; ·· Perception of quality of scientific research in environmental protection by research institutes and business activists; ·· Attitudes of employees of enterprises harmful to the environment to ecological innovations according to surveys and press reviews; ·· Number of persons raising the issue of eco-innovation. ··

··

The presented set of measures is wide, but specialist literature, and to some extent also business practice, contain even more although some of them still are of little use. Our set mainly contains measures of a macroeconomic nature. Statistical data for Poland (and possibly voivodeships) to count them can be found easily in the publications of the Central Statistical Office of Poland (CSO). However, measurement and assessment of eco-innovation at the industry and enterprise level, i.e. on the meso-economic and microeconomic scale, are equally important. The meters mentioned above can usually also be applied in these cases, of course taking into account the change of input data. For instance, productivity (that is, the efficiency of objectified work) of fixed assets and materials in a national economy is calculated in the following way:

value of GDP in mln PLN ´100 value of fixed assets in mln PLN

and

value of GDP in mln PLN ´100 value of use of materials in mln PLN

In turn, in an industrial enterprise the first indicator takes the new form:

value of sales in realisation prices or value of pure production or proofit gross value of fixed assets in thousands of PLN

242  Agnieszka Thier Recognition of the value of sales in the numerator is a simple consideration of pure production or another net value (e.g. processing value) can be complicated but captures the essence of productivity better. The value of fixed assets is considered here without redemption because machinery and equipment reduce production to a small or no extent for this reason. The ratio of profit to the value of assets also means its profitability, sometimes referred to as the profit rate. The inverse of this relationship and similar ones means the index of asset consumption (capital consumption) and material consumption, or also energy consumption or water consumption. In the last two formulas, the values in PLN in the numerator can be replaced with natural units (kWh or joules, and m3). Work productivity (labour) in macroeconomic terms is calculated according to the following formula:

GDP in bln PLN / year number of employees

This indicator is also recognised per hour of work. In turn, the overall rate of work performance in the enterprise during the year is calculated in a simple way:



value of production manufactured in prices of sale or value of sales inn realisation prices number of employees

However, it is better to include the value of pure production (net) or in natural units. In turn, in the faculty, work efficiency refers more often to the working day or hour, also in pieces or kilograms of the product or component. It is worth noting that the inverse of work efficiency (especially in the faulty) is labour consumption. In turn, rolling labour consumption is a sum of working times of manufacturing goods at various stages of production (also outside the enterprise, including the supply of components and even raw materials), which usually is a subject of research only to design studios and scientists. Synthetic indicators include at least two, more often several and sometimes even a dozen diagnostic variables, and require a lot of data, including some that are hard to estimate, and special computer software. They can be divided into aggregate and composite ones (when they include variables from various fields). Therefore, they are used for comprehensive assessment yet may raise doubts and controversy due to estimation of factors not studied so far. Ecological footprint defines human demand for environmental (ecosystem) services in six types of areas, such as forests, areas of crops and livestock breeding, green and recreational areas, as well as urbanised areas. The value of demand, that is capacity of the environment, is specified in the so-called global hectares. In 2008, it was assessed to be 1.78 gha/resident in the world but the so-called ecological footprint of humanity due to development amounted to 2.7 gha, and in  Poland, 3.94 gha, so the pressure of the economy exceeds the ability of the

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natural environment to provide services by more than 50%, and much more in Poland. The Living Planet Index is an assessment of changes in biodiversity, i.e. changes in the populations of plants and animals, and in human pressure on the environment (Kłos, 2014, p. 71). In turn, the material input per unit service specifies the consumption of natural resources as ecological burden, per  ecosystem service unit. It includes resources of animate and inanimate nature, air, soil and water. Thus, it should be one of the investment planning and design instruments in line with the principles of sustainable and stable development (Ritthof et al., 2002, p. 9). Environmental product life cycle assessment also is a comprehensive method, which involves stocktaking of ecological effects of the product’s impact on the environment during subsequent stages of its life cycle. Figuratively, it is an analysis “from cradle to grave,” also considering the costs of using the product and social impact assessment. The ERPA matrix (Environmentally Responsible Product Assessment) is a similar instrument. It consists of five columns, covering material and energy consumption, solid and liquid waste, gas emissions and five lines depicting product life cycle stages. The matrix is subject to various modifications, e.g. to increase the quality of the product or service by translating information obtained from the market to technical parameters (Wyszkowska and Artemiuk, 2016, p. 162). Within the Eco-Innovation Observatory, synthetic indicators are also used to create ecoinnovation indexes for member states, and then building a ranking in the form of an Eco-Innovation Scoreboard based on them (European Innovation Scoreboard, 2019). A separate group of synthetic indicators is used for quality of life measurement. Their formulation applies, among others, assessment of the condition of the natural and living environment, work and leisure conditions and other ecological aspects. Results of quality of life measurements in cross-sections of classes and social groups, regions and states are usually recognised in the form of rankings that are important for the economic and social policy, and international comparisons (Łuszczyk, 2013, pp. 97–270).

Promoting eco-innovation In the European Union, promoting eco-innovation has become a priority of economic and environmental policy. It is proven by the Environmental Technologies Action Plan for the European Union, adopted in 2004, and the Strategy for Smart,  Sustainable Inclusive Growth “Europa 2020,” adopted in  2010. This strategy also has an innovation support programme, “Horizon 2020,” and the European Commission’s action plan for eco-innovation, “Eco-AP,” including the following issues: Supply and demand assessment, scientific research, industrial activity, business support instruments (Decision no. 1639/2006/EC of the European Parliament and of the Council of 24 October 2006 – Establishing a Competitiveness and Innovation Framework Programme [2007 to 2013], Official Journal of the European Union L 310/15 – 9.11.2006). These documents also show that the environmental protection industry (“ecological industry”) employed

244  Agnieszka Thier already 3.5 million people in 2008 and the value of its added production amounted to EUR 320 billion, that is, equivalent to 2.5% of the GDP of the Member States. In the world, the market of the environment protection sector reached EUR 1 trillion, including EUR 450 billion for energy-saving technologies. Poland, when accessing the European Union, agreed to implement the EU legal and system solutions in environmental protection. Therefore, already in 2004 Sejm adopted the act on the implementation of an environmental management system and ecological audit (the Act of 12 March 2004, Journal of Laws 2004, no. 70, item 631), as an EU system that is higher than international standards ISO 14001. The phenomenon of innovation has been the subject of research of the Central Statistical Office since 2006. The research considered four main types of innovation – unfortunately, without ecological innovations – and enterprises divided into small (only from ten employees), medium and large ones. However, environmental benefits owing to innovations introduced by enterprises were taken into account (Table 12.2). It turns out that research for the period of 2008–2010 showed that only 17.1% of industrial enterprises (from 9.6% of small to 69.1% of very big, from 500 employees) and 12.8% of service enterprises were classified by the CSO as innovative entities. These indicators are increasing yet rather slowly. In turn, proceeds from the sale of new products in 2013–2015 amounted to 9.5% of total revenues of industrial enterprises (12% in large ones) and 3% in service enterprises. As implies from the latest research conducted by the Polish Agency for Enterprise Development in a representative sample of 1,327 enterprises, 32.4% of enterprises implemented at least one innovation in 2016–2018, and if we add companies that made such an attempt, the ratio increases to 35.8% (PARP, 2019, p. 5). One of the ways to accelerate the process of implementing ecological innovations, especially organisational innovations, is to promote the use of the ISO standards system, starting with production quality certificates ISO 9001, through environmental management certificates ISO 14001, food health safety certificates ISO 22001 to certificates of occupational health and safety conditions ISO 45001, as well as EMAS or ISO audit 15378. Table 12.1 presents the number of ISO certificates issued annually in the world and in Poland. The number of certificates issued in Poland amounts to 0.85%–0.92% of all certificates issued in the world, which is much more than in the case of population participation rates of 0.5% and the GDP of 0.6%. As it can be implied from Table 12.2, among actions aimed at limiting the negative impact of economic activity, industrial enterprises most often raise the issue of waste management, and then reducing the energy consumption of production and carbon dioxide emissions, on average 7%–9% of the surveyed entities achieved benefits in these three groups of protective projects (this ratio reaches 23%–25.4% in large entities). In turn, these indicators are twice lower in service enterprises for obvious reasons. We can note a relatively low share of enterprises switching to the use of renewable energy sources, which results from the persistent primacy of coal in Polish energetics and slow abandoning this fuel despite

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Table 12.1 Number of enterprises that obtained certificates in 2013 and 2014 (in thousands) Specification ISO 9001 ISO 14001 Other Total

In the world

In Poland

2013

2014

2013

2014

1,126.5 301.6 133.4 1,561.5

1,138.2 324.2 146.9 1,609.3

10.5 2.2 1.7 14.4

9.6 2.2 1.8 13.6

Source: The ISO Survey of Management System Standard Certification, www​.i​​so​.or​​g​/iso​​/iso_​​surve​​ y​_exe​​cutiv​​e​_sum​​mary.​​pdf.

Table 12.2 Share of industrial enterprises that obtained environmental benefits in 2012– 2014 (%) Specification

Reuse of waste, water or materials (including sales) Reduction of energy consumption or CO2 emissions Reduction of soil, water, air pollution or noise level Reduction of material and water consumption of product unit Use of less polluting or less hazardous materials Reduction of the share of energy from fossil fuels in favour of renewable sources

Employment volume Total

10–49 persons

50–249 persons

250 and more

8.8

6.3

10.0

23.3

7.0

5.0

9.7

25.4

6.6

4.7

9.1

23.0

6.1

4.4

8.1

21.7

5.7

4.6

7.0

17.1

2.3

2.0

2.3

6.8

Source: Central Statistical Office (CSO), 2015, p. 124.

the successfully implemented programme of decarbonisation of the EU economy. The examples show that there are, however, conditions and opportunities in Poland for faster popularisation of renewable energy.

The share of renewable sources in energy production The share of renewable sources in energy production, especially electricity, starts to grow fast after 2000 in most countries – especially the developed ones – both because of conventional (fossil) fuels depletion and, mostly, for ecological reasons and as a result of technical progress in the construction of wind farms, photovoltaic

246  Agnieszka Thier cells and heat pumps using the heat of the Earth’s inside. In Poland, we observe a similar trend but the progress is relatively slow. Although hard coal extraction in the post-war period decreased from 190 million tonnes to approximately 63 million tonnes, almost 80% of electricity is still generated from hard coal and brown coal. This causes toxic sulphur dioxide (coal from Jaworzno/Mikołów contains up to 3%–4% sulphur), benzoαpyrene and carbon dioxide emissions (harmless to health but causing a greenhouse effect) and more toxic mercury from brown coal combustion. Poland is one of the countries with the highest level of atmospheric air pollution in Europe, as evidenced by both statistical data (e.g. Environmental Protection, CSO, 2017, pp. 462–470) as well as frequent press reports about high percentages of the population exposed to diseases or sick because of it. The coal lobby often repeats that in neighbouring Germany new coal power plants are also being exploited or even built yet the share of coal in electricity production amounts only to 35% and keeps on decreasing. In Poland, this indicator is planned to be achieved only in 2040. Table 12.3 presents the structure of primary energy carriers consumption. It turns out that coal consumption slowly decreases in the economy. However, the consumption and share of crude oil and natural gas are increasing. Consumption also increases in the case of renewable energy but its share is still small. The main objectives of the European Union climate policy are ambitious ecological tasks under the slogan 3 × 20%, that is, a reduction of greenhouse gas emissions in 2005–2020 for 28 members states by 20% on average, increasing the share of renewable energy sources in energy consumption to 20% (in Poland to 15%) and improvement of energy efficiency by 20%. The EU encourages achieving better results than in this programme and sets even more ambitious goals

Table 12.3 Consumption of primary energy carriers in Poland in 2000–2016 Specification

Consumption in terajoules* 2000

2016 2000

2016

Hard coal 1,940,687 1,772,100 91.3 Brown coal 507,526 490,125 96.6 Total coal 2,448,213 2,262,225 92.4 Crude oil 768,502 1,095,511 142.6 Natural gas 452,713 657,274 145.2 Peat and firewood 123,405 213,888 173.3 Hydro, wind, biogas 7,723 57,212 740.8 power Refuse-derived fuels 47,047 161,915 344.2 and other Total** 3,847,603 4,488,025 115.6

Structure in % 2000

2016

50.4 13.2 63.6 20.0 11.8 3.2 0.2

39.8 –10.6 11.0 –1.2 50.8 –11.8 24.6 +4.6 14.8 +3.0 4.8 +1.6 1.3 +1.1

1.2 100

Change

3.7 100

* 1 joule = 0.239 calories, 1 terajoule (TJ) = 1012 joules. ** Renewable energy 4.2% in 2000, 8.5% in 2014 and 9.0% in 2016. Source: Own study based on CSO, 2011, p. 224 and CSO, 2017, p. 217.

+2.5 –

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for 2030: Greenhouse gas reduction by 40%, increase in the share of renewable energy to 32% (in Poland to 21%) and improvement of energy efficiency at least by 32.5%. Implementation of these tasks in Poland turns out to be very difficult due to the state’s energy policy being based, among other things, on the statement that “in the 2050 horizon, coal will still be an important fuel for electric power industry” (Ministry of Economy, 2015), and higher subsidies for coal mining than the renewable energy sector (Siedlecka et al., 2017, pp. 37–38), as well as clear deterioration of the conditions for the use of renewable energy sources in  the scope of settlements of the prosumer (producer and consumer) with the electricity seller and new restrictions in the construction of wind farms (Act of 22 June 2016 – Journal of Laws 2016, item 925). The unfortunate statement of President Andrzej Duda at the climate summit in Katowice in December 2008 that coal still is a strategic resource for Poland and the country was not going to give up on it also gained negative publicity. Meanwhile, numerous countries in Western Europe plan to close their last coal power plants, such as the Netherlands already in 2020, France in 2021, Great Britain and Italy in 2025, Spain in 2030 and Germany in 2038. Therefore, pressure for changes in coal mining and energy development programmes will probably increase in Poland. When comparing the dynamics of total primary energy production and consumption with the dynamics of renewable energy production and consumption in 2000–2016 (Tables 12.3 and 12.4), it is easy to notice a great spread between these indicators: Total increase in energy production by 16.7% and almost by 2.4 times an increase in production of energy from renewable sources. It is interesting to see how the renewable energy production structure changes (Table 12.4) because, despite the development of energy production from biomass (among other things, biomass is added to coal in thermal power plants), its share in renewable energy production is clearly decreasing: From 94 to 71% in 15 years. In turn, in the same period, wind energy share increased from below 0.1% to 14%. This increase can be impeded because investing in wind turbines on land virtually stopped in 2017 due to the stricter location regulations, while expansion of offshore wind farms is expected only around 2030. Since 2013, turbines have provided much more electricity than hydroelectric power plants. All this because hydroenergetics is based on limited water resources in  the amount of approximately 1,600 m3 of flow per inhabitant annually (against 4,000–6,000 m3 on average in Europe) and poor retention. Reservoirs accumulate only approximately 6% of water outflow, while even 20%–30% in Western Europe. Out of other renewable energy sources that are not included in a separate column of Table 12.4 and only included in the “total” item, solar energy should be mentioned. Its share in the balance of renewable energy in Poland amounts to approximately 0.1%, and approximately 2.5% on average in EU countries. Table 12.5 presents the trend of changes in the share of renewable energy in total energy production and consumption in Poland in 2000–2016. The trend is clearly increasing. However, the indicators are far from satisfactory. According to the data provided by the CSO, the share of renewable energy in total energy consumption in 2016 amounted to 9% yet the most recent publication shows that this

3,801 4,549 6,864 8,679 9,069 ..

3 11 13 22 22 ..

3,587 4,166 5,866 6,597 6,415 ..

0.46 12 143 934 1,082 ..

Wind 181 189 251 158 184 ..

Hydro 100 100 100 100 100 100

0.1 0.2 0.2 0.3 0.2 0.3

Geotherm.

Total

Biomass

Total

Geotherm.

Structure in %

Production in thousand tonnes*

* In tonnes of oil equivalent, 1 t = 41.88 GJ or 11.63 MWh (thousands of kWh). Source: Own study based on CSO, 2011, p. 224 and CSO, 2017, p. 217.

2000 2005 2010 2015 2016 2017

Year

Table 12.4 Structure of renewable energy production in Poland in 2000–2016

94.4 91.6 85.5 76.0 70.7 68.1

Biomass

0.01 0.3 2.1 10.8 11.9 14.2

Wind

4.8 4.2 3.7 1.8 2.0 2.4

Hydro

248  Agnieszka Thier

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Table 12.5  Share of energy obtained from renewable sources in production and total energy consumption in Poland (%) Year

Share in Share in total energy total energy production consumption

2000 2005 2010 2015 2016 2016 2000

4.75 5.80 10.18 12.61 13.54 285.1

4.24 4.89 6.75 8.98 9.01 212.5

Source: Own study based on CSO, 2017, p. 217.

share in gross energy consumption, according to Eurostat in 2016, amounted to 11.3%, and in 2017 to 10.9% (more than in the data by the CSO but still far from the declared 15% in 2020). This indicator ranks Poland 21st among the EU states. The highest level of the indicator was noted by Sweden at 54.5%, Finland at 41%, Latvia at 39% and Denmark at 36%, and the lowest level was in Malta, the Netherlands and Luxembourg – at approximately 7% each. The share of renewable energy sources in electricity production is also interesting. This indicator in  Poland amounts to approximately 13%, in Germany 32%, while in Croatia, Finland, Spain, Sweden and Italy 50%–70%, in Austria, Cyprus, Lithuania and Portugal much above 70% and in Latvia and Malta 100% (CSO, 2018, pp. 94–96, 2019, p. 29).

Examples of eco-innovation implementation Examples of eco-innovation implementation in renewable energy sources with the support of the local government, which we will present briefly, prove  that not only large enterprises undertake innovations, which is basically easier, but various small entities do this too – owners of residential houses, individual entrepreneurs or their groups, including those organised in the form of clusters and networks. The popularisation of small-scale and distributed renewable energy contributes to both reducing pollution and lowering energy prices and to reducing inequalities in access to it, which is part of social justice and intergenerational solidarity. First experiences of RES use show that competing in the production of energy crops with food production and market in the field of biomass may appear, which occurs in some countries (Hetmański et al., 2019, pp. 23–27). In turn, in the latest directions of RES development, that is photovoltaic farms and solar installations, real estate taxation rules turn out to be factors inhibiting the

250  Agnieszka Thier construction of large facilities – just like in the case of wind farms. In practice, small photovoltaic panels are already widely installed on house roofs, offered by several companies together with the assembly service (e.g. by the company Eco Voltaika), with the size of 17–21 m2 and power of 3.25–4.08 kW, generating 3,300–4,100 kWh of electricity per year. The return of installation cost in the amount of PLN 17,000–20,000 takes 4–5 years (there also are less optimistic estimates: Żarkowski et al., 2020, pp. 8–9). Photovoltaic farms are also being built. One of the first farms, with the power of 0.5 MW, was constructed on Żar mountain in Żywiec district. Facilities with the power of 125–500 MW started to be constructed in the Copper Mining and Metallurgy plant, and the thermal power plants Opole and Dolna Odra. Zgorzelec Renewable Energy Sources Development Cluster Zgorzelec Renewable Energy Sources Development Cluster (“ZKlaster”) was established by local entrepreneurs in 2016–2017, using mainly private capital. The Cluster covers several communes and municipalities in the area of Zgorzelec, Węgliniec and Pieńsk (near the brown coal power plant Turów with the power of 1500 MW in Bogatynia-Turoszów). The Association of Energy Innovation Development in Zgorzelec is the co-ordinator. The Cluster is an agreement of 42 entities, including e.g. Zgorzeleckie Przedsiębiorstwo Energetyki Cieplnej, 20 renewable energy producers, a distribution company, GEPOL, with electricity trading concession, three local government bodies, three universities (the Silesian University of Technology, Wrocław University of Science and Technology and Wrocław University of Economics and Business) and Zgorzelec Research and Development Centre (Innovation Hub). OZE Holding and Rene Sola company are some of the owners of photovoltaic installations. The main purpose of the Cluster’s operation is to ensure energy self-sufficiency of the given area owing to the use of local renewable energy resources as well as developing energy storage technologies. The creation of a photovoltaic farm and the improvement of related technologies played the main role in these tasks. The Cluster has two cogeneration units (combined heat and power plant), each with 20 MW heat output and 6–7 MW of electric power, a photovoltaic farm with a capacity of 18–20 MW (launched in 2018) and a new investment with a capacity of 49 MW, wind farm of 9.8 MW capacity and turbines under construction with a 6 MW capacity, biogas plant with a 1.7–1.8 MW power capacity, two electricity storage units and various prosumer units. The Cluster’s involvement in the development of photovoltaics – due to good insolation of the region – and electricity storage should be stressed. This is because the photovoltaic plant is anticipated to reach a power of 200 MW by 2021, which will let it keep the second or even first position among over 70 such farms in Poland. Some active members of the Cluster tend to state that photovoltaic devices are relatively easy to construct and operate, and are not harmful to the environment, although larger facilities require free areas. Also, electricity storage is particularly important in RES systems because electricity production is

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dependent on wind power and on the degree of insolation, and is weakly correlated with the changes in demand for electricity. Along with the widely known small lead-acid batteries, lithium-ion batteries appear but electricity storage options are still basic. Moreover, the Cluster has started design work in several areas, such as the construction of the electric off-road vehicle Sokół, production of sensors measuring atmospheric air pollution, energy-saving technologies, improvement of methods of the “Energy producer–consumer” system management. This will probably result in the commercialisation of developed improved technologies for obtaining renewable energy within the Cluster. It implies clearly from the analysis of the creation and functioning process of “ZKlaster” that such a Cluster provides opportunities that a single investor, especially with small capabilities, does not have, and a large body provides energy security easier for its participants and the sale of surpluses to the professional network. According to the management, achievements of the Cluster mainly result from the establishment of a local distribution network operator, which is usually not the case elsewhere. An important role was also played by the adoption of clear and flexible operating principles of the Cluster, and the carried out educational campaigns for employees of local government institutions and the residents. Wind farm Novenergia in Głuchów near Kalisz The wind farm Novenergia, in Głuchów near Kalisz, was created on  the initiative of the Novenergia company that presented such an idea in the commune office, considering the coefficient of the installed capacity of wind turbines in the amount of approximately 35%. Following the local government’s consent, a letter of intent on the construction was prepared, a resolution was adopted by the commune council on a local spatial development plan, a building permit was obtained, lease agreements with farmers were concluded, and other difficult procedures were carried out, which lasted in 2005–2012. The construction and commissioning of facilities took place in 2013–2014. The construction cost of PLN 145 million was financed with funds from the EU operational programme “Infrastructure and Environment” in the amount of PLN 40 million and bank loans. The farm has ten wind turbines Vestas, 2 MW each, so their installed capacity is 20 MW, which translates into the production of approximately 50 GWh (50 mln kWh) per year. This corresponds to the demand for electricity for 15,000–20,000 residents (Głuchów commune has 5,800 residents). The farm is connected to PGE grid with a 110 kV cable line voltage. Expansion of the farm with further turbines with a capacity of 20 MW is planned. The wind farm Novenergia is managed by the company Novenergia Poland, belonging to the French group Total. After production was expanded, a refund of some of the tax was obtained due to lower income, which was caused by lower prices of electricity and  green certificates (resold to coal power plants in  connection with greenhouse gas emissions). The company pays property tax in the amount of PLN 1.7 million per year, which is 8% of the commune budget, and grants donations for educational projects, including a primary school in Białynin,

252  Agnieszka Thier municipal harvest festivals and other local events. The farm has also influenced the increase in employment in the commune and farmers’ income from the lease. Wind farm in Gaj Oławski The wind farm in Gaj Oławski is being constructed and is a specific project. The first stage consists of the construction of four turbines, supplied by the German company Enercon, with a total capacity of 10 MW. It is supposed to finish at the end of 2020. The investment cost is approximately PLN 100 million, including PLN 47 million of low-interest loan from the Voivodeship Fund for Environmental Protection and Water Management in Wrocław. The farm will be able to supply electricity to 2,000 single-family homes, that is approximately 8,000 residents. It is estimated that this will reduce the emission by 28,000 tonnes of CO2 and 1,300 tonnes of dust. The height of the turbines will be approximately 200 m, almost as much as the Sky Tower in Wrocław. It is also planned to build four lithium-ion electricity storage facilities of 12 MWh. The Promet-Plast partnership, involved in the production of plastic products, is the investor here. It is owned by Elżbieta and Andrzej Jeżewscy from Godzikowice. Their initiative on the construction was already communicated in 2014, which faced strong protests from the residents of the surrounding villages due to the proximity of dense development. However, the commune administrator agreed, then the commune did too. The protesters turned to, among others, the Supreme Audit Office, which declared the investment illegal (especially according to new regulations) but the construction is carried out. On the internet, the construction of this farm and local authorities are attacked by some people proving the harmfulness of turbines to human health. You can also find various nonsense comments that, for instance, wind and solar energy is not renewable energy at all. Of course, there are also voices supporting the useful idea of building a wind farm in Gaj Oławski. It is worth adding that the recipients of energy from this farm are to include, among others, Oława Cluster EKO, whose founding members are as follows: The commune and city of Oława, Oława district, the Tauron Ekoenergia company and the family company Promet-Plast. The objective of the Cluster is to act for energy security, stimulate prosumer energy, develop technologies of the RES system. Construction of a wood biomass CHP plant in Lębork Construction of a wood biomass CHP plant in Lębork and was carried out by the Municipal Heat Supply Company. The purpose of the investment was to reduce smog in the city and stabilise the heat prices for individual customers by switching to the use of biomass instead of coal in heating. Design development and the tender concerning the investment was held in 2012–2013. In order to finance investment outlays, municipal bonds worth PLN 8 million were issued in 2014. Most of outlays amounting to PLN 43 million were financed by the EU operational programme “Infrastructure and Environment” and the Swiss-Polish Cooperation Programme (Swiss Contribution). In 2016–2017, the new heat and power plant

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was commissioned and the project was completed. The investment included a combined heat and power plant building, a covered fuel warehouse with an area of 1,000 m2, biomass unloading installation and a chipping machine to crush it, reconstruction of the access road, purchase of trucks and connection to certain facilities to the grid. Heat is generated by an installation consisting of a thermal boiler and a cogeneration unit in the ORC system and thermal oil is the medium (300/250° C). Owing to this, heat capacity and electricity generation is very high: 82%. The new combined heat and power plant has thermal power of 5.4 MW and electric power of 1.25 MW. It does not use electricity from the grid, and also sells surplus electricity to the distribution grid. The fuel used is wood chips and briquettes from energy crops, wood and straw, and cereal waste grains from nearby farms and wood processing plants. Among the effects of the project, in addition to improving the quality of heating services and reducing the cost of providing them, we should mention the reduction of annual coal consumption by 18% (by 50% in the old heating plant, working shorter hours now), reduction of carbon dioxide emissions by 50% and sulphur dioxide emissions many times more. Savings on the purchase of fuel are estimated to be 2.8 PLN million annually. Moreover, the modernisation of the municipal heating network worth PLN 9.5 million has been carried out in the period of 2017–2021, which, among other things, should reduce heat loss in transfer by approximately 20%. This characterises “investing in both ecological and technologically innovative, and socially just projects” (Hetmański et al., 2019, pp. 59–61). Among the more detailed applications and postulates, the following recommendations seem to be the most important ones: ·· ·· ·· ··

··

Mitigation of the 10H rule regulating the distance of turbines from residential buildings (a 200 m high turbine can only be constructed 2 km or more from the nearest buildings); Exemption of photovoltaic installations from property tax, or reduction of this tax; Introduction of a priority in administrative proceedings for the construction of heating networks (similarly to water and sewage networks); Facilities in the process of restoring the municipal character of the municipality’s strategic resources – especially the purchase of low and medium voltage grid infrastructure – under the Act on the management of state property, and in the selection of the operator of this grid; Popularisation of preparation of energy balance at the level of municipality and district.

Conclusion In the end, we would like to emphasise that barriers to the development of innovation are the result of being used to the existing technologies, difficult access to financial resources for investments and low level of consumer awareness, and generally higher costs and level of risk associated with the implementation of new

254  Agnieszka Thier technical or organisational solutions – which bring social and economic effects only after a certain period – and the lack of co-operation with research institutes and universities.

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13 Knowledge and innovation 4.0 in today’s electromobility Radosław Miśkiewicz

Introduction Today’s new market economy is based on five primary drivers: Science, high-tech industry (Industry 4.0), information society services, knowledge-intensive services and education. Many authors, namely B. Lundvall, B. Johnson, A. Stabryła, R. Miśkiewicz, M.A. Peters, S. Marginson, P. Murphy, H. Kagermann, R. Anderl, J. Gausemeier, G. Schuh and W. Wahlster, believe that knowledge is becoming the most critical asset of a company (Lundvall and Johnson, 1994; Stabryła, 2015; Miśkiewicz, 2019; Peters et al., 2009; Kagermann et al., 2016; Gloet and Terziovski, 2004). The drivers of the knowledge-based economy are shown in Figure 13.1. Knowledge has an impact on both modern management of economic processes and skilful management of people of a production company at all levels. It forces efficiency and stimulates innovation and development. The new economy requires knowledge about near and far context, acquisition and use of knowledge, a transformation of industrial society into an information society. Access to information and its skilful processing and adaptation to change is of particular importance. All this is enforced by a new concept of Industry 4.0 which refers these processes entirely to the market, environmental protection and energy security of countries, intangible resources of the company, shaped by knowledge, intellectual capital and information (Kourtit et al., 2014). The development and rational use of human resources as the main drivers of knowledge which under the conditions of a new economy becomes a market-creating force is pointed out, for instance, by Miśkiewicz (2019), Peters et al. (2009), Tiwari and Korneliussen (2018). The increased virtualisation of economic, political and cultural life outlines the need to build new structures of the company creating innovative man-machine relations. On the other hand, the focus on processes and the domination of teamwork lead to the creation and operation of self-learning organisations (Skrzypek, 2018; Stabryła, 2015; Machado, 2016). It is also worth noting that in the knowledge-based economy resulting from the Industry 4.0 concept, the economic information, namely factual, technical, technoeconomic, economic and social, individual, aggregated information, acquires particular importance. Those types of information are extremely developed and DOI:  10.4324/9781003184065-13

Knowledge and innovation 4.0  257

Figure 13.1  Drivers of the modern economy. Source: Own study based on (Koźmiński, 2001; Kleer, 2009; Miśkiewicz, 2019; Skrzypek, 2018; Stabryła, 2015).

vital since they shape a new generation of information management systems that include transactional systems, management information systems, decision support systems, expert systems, and computer integrated manufacturing (CIM) (Flakiewicz, 2002; Dolińska, 2003; Worsnip, 2015). They play an essential role in the knowledge-based economy and are calculable based on the formula:

SI = {P, I , T , O, M , R, N }

where: SI P I T

= = = =

O = M = R = N =

information system of an organisation; set of entities users of the system; a collection of information about the real context (information resources); set of technical tools used in collecting, sending, processing, storing and issuing information; set of system solutions applied in a given organization (management formula); set of meta-information (description of the information system and its information resources); relations between different sets; infrastructure and context of the information system (Fiddler and Marienau 1995).

Research on the development of a new knowledge-based economy is methodologically complex. The Knowledge Assessment Methodology (KAM) is universal in this respect, being used to measure knowledge by means of numerous sub-indicators forming two comprehensive knowledge indices: The Knowledge Economy Index (KEI) and the Knowledge Index (KI) (Chen and Dahlman; 2005; Nancu, 2015). Analysing, for instance, the economies of 27 European countries

258  Radosław Miśkiewicz and taking into account the KEI, the leaders in 2012 were Sweden (9.43), Finland (9.33), Denmark (9.16), the Netherlands (9.11) and Germany (8.90). Poland (7.41) was then ranked 25th, ahead of Romania (6.82) and Bulgaria (6.80), and taking into account the KI (7.20) it was 24th ahead of Latvia, Romania and Bulgaria (Nowak, 2013). Taking into account the Digital Economy and Society Index (DESI) included in the European Commission’s report of 2019, against the background of 28 EU Member Countries, Poland ranks 25th, scoring 41.6 points (38.8 points in 2018) compared to the EU average of 52.5 points (49.8 points in 2018). The values of KAM, KI and DESI indicate that the development process of the European and Polish knowledge-based economy is part of Industry 4.0. Digital transformation of manufacturing infrastructure controlled by cyberphysical systems in the Internet of Things environment results in a smooth and collision-free blending of the real world with virtual reality. Built-in computers and networks monitor and inspect physical changes, usually with feedback, where physical processes affect calculations and vice versa. They operate, as emphasised by Gaub (2016), Hermann et al. (2016) and Kang et al. (2016) according to the principles of interoperability, virtualisation, decentralisation, real-time capability assessment, service orientation and modularity.

Theoretical part New solutions in the global economy under the influence of the Industry 4.0 concept have different definitions and understanding in literature and research. In the United States and other English-speaking countries, the emphasis is on the name Industrial Internet (Boyes et al., 2018; Yoo et al., 2010). In other countries, they are called the Internet of Things (Rouse, 2019; Ray, 2016) or Smart Factory (Srinivasan et al., 2015). An attempt to organise the terminology and its global meaning was proposed by Hermann M., Pentek T. and Otto B. in their work “Design Principles for Industrie 4.0 Scenarios: A Literature Review.” A similar emphasis could be seen in the research conducted by Kagermann et al. (2013) and Nordmann (2013). The practical suggestions they contain indicate the necessity to combine the efforts of scientists (through the German Academy of Technical Sciences), the potential of Germany’s largest corporations and industrial companies (Siemens, Deutche Telekom, MAN, Bosch) and the organisational ministries of the federal states (Economy, Energy) to accumulate knowledge about the process to plan it properly and implement it rationally. The social problems related to resource and energy efficiency, urban production, organisational changes, shortages of skilled workers or flexible work organisation have been indicated by Frey and Osborne (2013), Pfeiffer and Suphan (2015) and WEF (2015). Thus, knowledge, its transfer and human labour are changing very rapidly, contributing to the development of new normative regulations covering all sectors of the economy shaping SME-friendly infrastructure (Blanchet et al., 2014; Kagermann et al., 2016; Hoske, 2015). In the United States, Industry 4.0 is referred to in the scientific literature as Industrial Internet or Integrated Industry, Smart Industry or Smart Manufacturing. The research is focused on intelligent manufacturing,

Knowledge and innovation 4.0  259 data processing, advanced robotics, the use of industrial communication equipment and services and cybersecurity in the broad sense (Rachuri, 2014; Shipp, 2012; Bughin et al., 2017; Bender and Willmott, 2017). In China and Korea, the Industry 4.0-based organisational solutions are modelled on German scientific experience through their National Academies of Science (e.g. China Academy of Engineering) as well as on organisational solutions, with the help of industry ministries (e.g. the Ministry of Industry and Information Technology) (Xu and Lian, 2019). Scientific considerations relate to the development and implementation by central governments of new economic and social systems related to the reliability of processes between machines and humans, IT security and industrial knowledge protection (MSIP, 2014). The available research results show that today’s global business activities of companies need wider use of knowledge and the professional management of changes in the company should be knowledge-based (Hermann et al., 2015; Szulewski, 2016; Plessis, 2007; GSMA, 2015; Hauser, 2015; Hildebrandt et al., 2015). Mass customisation influences a new business model, and the digitalisation of production processes as well as artificial intelligence set the directions of contemporary industrial development, which has been emphasised by Zhong et al. (2017), Kagermann (2015), Gottel et al. (2016), Nosalska and Mazurek (2018), Ibarra et al. (2018) and others. Common features of production models and similarities in their behaviour, new modules relating to infrastructure management lead to innovation in products and shape modern relations with customers, which has been emphasised, for example, by M. Kardas, B.S. Ullrich, A. Osterwalder and Y. Pigneur and C. Zott, and R. Amit. The results of their research became the basis for distinguishing general schemes of business models (Kardas, 2016; Osterwalder and Pigneur, 2013; Amit and Zhot, 2015). Also, in Poland, many studies, reports and analyses have already been published, which concern the whole economy or its selected industries and their readiness to changes that are taking place. They analyse the innovativeness of the economy, the level of expenditure on research and development in relation to GDP. Others refer to computerisation and robotisation, functioning of companies, system developments, logistic solutions facilitating decision making and improving efficiency and quality of work (Stadnicka et al., 2017; Borowiecki and Jaki, 2015; Bujak, 2017; Górska and Olszewski, 2015). In recent years, intensified efforts have been made to get the economy ready for the implementation of Industry 4.0 (Szum and Magruk, 2019; Dmowski et al., 2016; Miśkiewicz, 2016; Borowiecki and Makieła, 2019). The actions are based on EU law and funds as well as on Polish strategic documents containing direct reference to the concept of Industry 4.0. These are, to name a few, the Strategy for Responsible Development, “Reindustrialisation” (Strategy, 2017), Future Industry Platform, Initiative for Polish Industry 4.0, Industry Incubators 4.0 and Industry Competence Centres 4.0 (Walicki, 2018). The latter stimulates the activity of innovative regions and the competitiveness of industrial companies operating therein (Guliński, 2019). Legislative and institutional solutions are gradually appearing to promote the validity of the implementation of the Industry 4.0 concept in the economy. These are government programmes, the Polish Digital Platform or Industry 4.0

260  Radosław Miśkiewicz Implementation Monitoring Centres (Bal-Woźniak, 2012; Act, 2019; Bronski and Tylman, 2017). The development of Industry 4.0 in many countries, including Germany, the United States, China, South Korea, the UK, France and Poland, have created conditions for the development of electromobility. It has been recognised as a technology of the future and an attempt to respond to the greatest communication problems of modern societies, i.e. reduction of noise, facilitation of movement, solving the problem of congested agglomerations, smog and growing amount of greenhouse gases in the atmosphere. It also opens up opportunities for new technologies, materials, components and public services (Casals et al., 2016; Schamp, 2014). Unfortunately, the development of electromobility still requires high financial outlays in R&D and in the implementation process. In 2018 alone, many billions of euros were spent by individual countries on such activities, namely South Korea 5.7; China 4.3; Germany 3.1; Great Britain 2.1; France 0.89; the United States 0.71; Poland 0.078 (Czernicki et al., 2019; Shen et al., 2016). The research focused on the construction of an electric engine, the efficiency of a battery cell and the infrastructure of charging points and smart power grids (Bereetz and Salon, 2018; Cecere et al., 2018; Franke and Krems, 2013; Tietge et al., 2016; Schmitz and Altenburg, 2016). Industry 4.0 in Poland facilitates the development of electromobility, which is becoming the new branch of industry and the whole economy and is one of the key elements of energy sector transformation. It is part of the national energy policy, reducing dependence on fossil fuels. Determinants of knowledge and technology transfer into the Polish energy sector are shown in Figure 13.2. A new approach to innovation translates into a number of benefits for the energy sector. Although the industry itself approaches the fourth industrial revolution with some reserve, the companies that make up the sector tend to respond

Figure 13.2  Determinants of knowledge and technology transfer. Source: Own study.

Knowledge and innovation 4.0  261 positively to innovation with great curiosity and optimism. When asked what changes have contributed to improving company performance in the last few years, energy managers most often mentioned: improving existing products and services (57%), creating new processes to improve profitability (50%) and developing more sustainable and environmentally friendly processes, products and services (51%). They identified proactive support and commitment to innovation processes from top management (82%), the ability to attract and retain the most talented and qualified employees (77%) and the creation of an innovationfriendly culture/environment (76%) as the most important factors for effective implementation of innovation. According to Polish decision-makers, investments in the energy sector will mainly contribute to significantly reduce the carbon footprint (46%). Outlays on scientific research and development works to reduce CO2 emissions are showing a strong upward trend in Poland. From 2005 to 2015, they increased from about 0.5% to almost 1% of GDP. In line with the Strategy for Responsible Development and the Europe 2020 strategy, a further increase of outlays on scientific research and development works was assumed, 1.7% of GDP which was defined in these documents (Strategy, 2017). According to the forecasts of the Ministry of Energy, the measures taken should also foster the development of electromobility and result in many achievements. It is expected that in 2020, in 32 selected agglomerations, in the segment of electrically-driven vehicles, almost 50,000 will be driven on the roads, 6,000 points of normal charging power (so-called free charging points with a power not exceeding 3.68 kW) and 400 points of high charging power will appear. The segment of cars powered by natural gas in the form of CNG will reach the volumes of 3,000 vehicles serviced by 70 refuelling points. These will be electric vehicles of the following car categories: BEV (Battery Electric Vehicle), PHEV (Plug-in Hybrid Electric Vehicle), HEV (Hybrid Electric Vehicle), REEV (Range Extended Electric Vehicle) and FCEV (Fuel Cell Electric Vehicles). Unfortunately, the number of electric cars in Poland still represents a very small percentage of the total market. According to various data, sales of BEVs and PHEVs in Poland in 2018 amounted to 620 units and 704 units respectively. At the same time, especially in the case of fully electric cars, we can speak of a very dynamic year-on-year increase in sales, which amounted to 45%. For PHEVs, sales growth is much lower and amounts to 9.7%. The number of BEVs and PHEVs available on the market covering most passenger car segments is also increasing. Amongst alternative vehicles, a relatively large number of old-style hybrid vehicles (HEVs) were also sold in 2018 and amounted to 22,821 vehicles, almost 20 times more than BEVs and PHEVs combined. However, it should be noted that HEVs are often not considered fully zero-emission vehicles in technical literature. Given the several-year perspective, we can talk about a very dynamic growth in sales of fully zero-emission vehicles. In 2010, seven vehicles of this category were purchased in Poland, while in 2018 they were as many as 637 units. To sum up, on a European scale, Poland is still a small market for vehicles propelled by electric motors. According to the European Alternative Fuel Observatory (EAFO) data, at the end of 2018, the cumulative total of electric vehicles (BEVs and PHEVs) in Poland amounted to 3,079 units.

262  Radosław Miśkiewicz Meanwhile, according to the same institution, the total number of vehicles of both types in the EU exceeded 1,250,000; the Polish market represents, therefore, only 0.2% of the total European market. As of April 2019, about 3,900 cars were available in car-sharing systems in the largest Polish cities, almost half of which were in Warsaw where services were provided by four operators (Traficar, PANEK, 4Mobility and Innogy Go) (Zawieska, 2019; Kurtyka, 2018). According to the Polish Central Statistical Office (GUS) and EUROSTAT data, the electric car market in Poland is steadily growing. This is confirmed by detailed data from the Polish Alternative Fuels Association, Polish Central Register of Vehicles, which show that in the second half of 2019 the number of electric passenger cars in Poland amounted to 6,672 (4,178 BEVs; 2,494 PHEVs), and 888 chargers (624 AC; 264 DC). On the other hand, from January to August 2019, the number of newly registered electric vehicles increased by a corresponding amount: 2,416 (840 PHEVs; 1,576 BEVs) passenger cars; 388 vans and trucks; 206 (DMC 3.5t) electric city buses; 234 motorcycles; 5,497 mopeds; 98,138 hybrids and vans; and 4,743 passenger cars and vans (CNG/LNG). It is also worth noting the dynamics of growth in the use of low-carbon vehicles in the public transport sector. Lowcarbon buses are nowadays dominated by CNG and LNG vehicles, but electric buses are the ones with the highest sales growth. This category of vehicle fits best with modern urban environmental requirements as it emits virtually no noise or harmful local pollution. In 2016, out of 1,942 new buses purchased in Poland, 42 vehicles (2.2%c) were zero-emission vehicles, including 19 CNG vehicles, 17 hybrid vehicles and six electric buses. In 2017, 160 zero-emission buses were already registered, representing about 7% of the total market. The fleet of vehicles purchased by Polish cities included 85 hybrid drive buses, three electric buses and 12 CNG vehicles. In 2018 a further increase was observed in the number of zeroemission buses sold with the highest number of zero-emission buses ever sold; 317 such vehicles were registered for public transport: 200 hybrid buses, 63 fully electric buses and 54 CNG vehicles (Transport, 2019). One of the fundamental problems in implementing electromobility on a large scale in Poland is the vehicle charging infrastructure. According to the EAFO data, the number of functioning charging points in Poland exceeded 800 in 2018; in 2019 there were already 1,611 publicly available charging points and 888 charging stations (624 AC; 264 DC) (PZPM Report, 2019). In order to promote the idea of electromobility, in 2019 Poland implemented the NCE Fast EV Net project which was co-financed by the Innovation and Networks Executive Agency (INEA) of the European Commission under the Connecting Europe Facility instrument (CEF). As a result, another 75 fast-charging stations were launched in Poland and ten in Slovakia; charging stations in Bratislava, Trencin and Ruzomberok were equipped with an energy storage facility. This particularly innovative solution combines energy storage batteries with an energy management system and two fast-charging stations. It allows the installation of fast-charging stations (with high power demand) in locations where access to high power from the power grid is difficult (Zawieska, 2019; Skłodowska, 2019; Czernicki et al., 2019). The implementation of the “LEM (Lotos Electro Mobility) project also facilitated the pilot

Knowledge and innovation 4.0  263 implementation of electromobility along the roads of the TEN-T core network.” In 2018, they started testing free of charge the first 12 charging points for electric vehicles along the so-called Blue Route between Warsaw (two points) and the TriCity (four points) along the A1 and A2 motorways (six points in the Travel Service Areas). Each of these LOTOS stations has four charging stations and has been equipped with a 150 kW connector using three international standards: CHAdeMO, CCS, Type 2 (GreenWay, 2018; Free Tests, 2018; Urgent, 2019; PKP, 2018). Slightly different forms of new technological solutions introduced to the energy market are energy clusters. They constitute a platform for cooperation between entrepreneurs, research and development units, and public authorities. The functioning of these entities is an important catalyst for knowledge and technology transfer. The regional character of clusters not only improves the competitiveness of the companies involved but also has a positive impact on the development of the entire region. Such an example can be the energy cluster of the Czorsztyn Reservoir operating in the Nowy Targ district, which also includes the municipality of Nowy Targ. It is worth noting that at the end of 2015, 134 clusters were in place in total, including 11 in the Dolnośląskie Voivodship, four in the Kujawsko-Pomorskie Voivodship, 11 in the Lublin Voivodship, four in the Lubuskie Voivodship, three in the Łódź Voivodship, ten in Małopolska, 14 in Mazowieckie, one in Opolskie, 12 in Podkarpackie, eight in Podlaskie, five in Pomorskie, 28 in Śląskie, four in Świętokrzyskie, two in Warmińsko-Mazurskie, 12 in Wielkopolskie and six in Zachodniopomorskie Voivodship. On the other hand, out of these, there were about 33 participating in the energy market (Koncepcja, 2017). The implementation of G2V and V2G technologies for charging (and discharging) car batteries may be key solutions in electromobility. The first (Grid-to-Vehicle, G2V) involves a unidirectional flow of energy between the power system and the vehicle. It assumes the distribution of the charge over time in order to avoid sudden load increases. The second (Vehicle-to-Grid, V2G) enables a two-way flow of energy between the power system and the battery of an electric car (Stahl, 2018; Stahl and Bućko, 2019; Hall and Lutsey, 2017). Another technological solution is the Pilot Maker Electro ScaleUp programme implemented in the electromobility industry. It assumes increased involvement of start-ups in the development of e-mobility. Implementation of 23 pioneering technologies for electromobility is the goal of the Elektro ScaleUp programme which links large corporations with start-ups. The project is part of the government’s Electromobility Development Plan. Examples of knowledge and technology transfers in the field of electromobility include: An Intelligent Energy-Europe programme (IEE) implemented in Polish cities and agglomerations (Project C-LIEGE implemented in Szczecin and other Polish cities); a charger, developed by the start-up Willbert, whose transistor is made of silicon carbide making it super-fast and capable of working under challenging conditions; a platform created by VivaDrive to analyse the use of company car fleets, and identify the cheapest and most beneficial way to electrify them; a blockchain technology implemented by the start-up MC2 Energy in electromobility allowing for real-time settlements with both electricity users and producers; software upgrade by Fleetnet for maintenance-free rental of electric cars,

264  Radosław Miśkiewicz which facilitates remote monitoring of vehicles by communicating with them via telemetry devices; a “Blue Route” extended between agglomerations and equipped with chargers; and a model developed by the Institute of Thermal Technology of the Warsaw University of Technology to stimulate additional demand for electricity from charging one million electric vehicles (Kijowska, 2014).

Research part – a case study on the implementation of e-mobility in the Szczecin City Municipality The development of electromobility is a significant challenge for power companies in Poland. This also applies to ENEA Operator and its Distribution System Operators (DSOs). The activity of ENEA Operator as a distributor of electricity covers the following voivodships: Wielkopolskie, Lubuskie, KujawskoPomorskie and Zachodniopomorskie, i.e. about one-fifth of the country’s area. It supplies power to over 2.5 million customers (Figure 13.3). In the five largest cities, i.e. Szczecin, Gorzów Wielkopolski, Zielona Góra, Poznań and Bydgoszcz, the ENEA Operator’s activity for the development of electromobility is manifested at three basic levels: Modernisation and development of network infrastructure, cooperation with other national and international

Figure 13.3  ENEA Operator’s operational area. Source: Report CSR 2018 ENEA.

Knowledge and innovation 4.0  265 entities popularising the idea of electromobility (the Polish National Centre for Research and Development (NCBiR), universities, research centres), and broadening cooperation with local government units (municipalities). The actions taken are in line with the Polish energy policy, which provides for further decentralisation of the generation sector, the growing importance of renewable sources and rapid development of technologies in this area, where progressive digitalisation and gradual abandonment of some conventional generation resources and modernisation and development of modern network infrastructure together with PSE are becoming key priorities. Taking into account those challenges and investment plans of the entire ENEA Capital Group for the years 2016–2030, ENEA Operator has devised a development plan covering the period of 2020–2025 and allocating over PLN 7 billion for the network infrastructure within six years. The organisational, technical and financial plans assume further grid connection of entities producing energy, including renewable sources, modernisation of infrastructure at each voltage level and reconstruction of smart grids facilitating access to electromobility. Moreover, these measures are correlated with the duties of local government units related to servicing the zero- and low-carbon vehicles they have purchased and building the charging infrastructure. Model solutions may be, for example, the city of Szczecin which, pursuant to Article 60 of the Act of 11 January 2018 on electromobility and alternative fuels (Journal of Laws 2019, item 1124 as amended), is obliged to ensure a minimum number of 210 charging points by 31 December 2020. ENEA Operator’s participation in meeting regulatory figures within its operational area is shown in Table 13.1. The city of Szczecin consistently undertakes electromobility-related activities taking into account environmental, social and economic issues. As early as 2017, Szczecin’s budget set aside a project called “The Electromobility Programme of the City of Szczecin,” which was to enable the implementation of pilot projects focused on electromobility and was ahead of the entry into force of the Table 13.1 Regulatory charging points in the ENEA Operator’s operational area Location

The number of charging points resulting from the Act

Bydgoszcz Gorzów Wielkopolski Poznań Szczecin Zielona Góra Total Number of service staff (OSŁ)

210 60

29 26

210 210 60 750 375

39 25 22 141 70.5

Source: Own study.

Number of publicly accessible charging points as of 15 January 2020

Number of publicly accessible charging stations to be built by ENEA Operator Sp. z o.o. 181 34 171 185 38 609 304.5

266  Radosław Miśkiewicz Electromobility Act. The action consisted of formulating a procedure to purchase eight electric vehicles. Nissan Leaf cars were delivered to the institutions under the authority. The vehicles were equipped with special high-capacity batteries allowing a range of up to 250 kilometres on a single charge. They cost the city over PLN 472,000, half of which was financed by the Voivodship Fund for Environmental Protection and Water Management, WFOŚiGW (Report, 2019). Then, the construction of a network of EV charging stations began in 2018. Fastcharging stations were built at Klonowic Street, Felczak Street and Kazimierz Przerwa-Tetmajer Street. They cost PLN 477,000 gross, and a sum of over PLN 238,000 was again added by WFOŚiGW (Report, 2019). The municipal EV fleet grew in 2019 when four more vehicles (two Nissan Leaf and two Renault Zoe) were purchased. By doing so, Szczecin has become a pioneer in implementing electromobility-focused solutions. This purchase allowed Szczecin to fulfil the obligation set out in the Act on Electromobility and Alternative Fuels eight months in advance and to exceed the 10% share of EVs in the fleet of vehicles in use, required from 1 January 2020. As one of 13 cities, it can record success in building charging stations (one per 100,000 inhabitants, twice as high as the average), supporting commercial entities in the installation of charging stations, designating parking spaces for electric cars (one per 100,000 inhabitants) and successively extending the network of bus lanes (more than 1.7% of municipal roads). The measures taken are included in the 2018–2023 Multiannual Development Programme for Szczecin. They are shown in detail in Table 13.2. Electromobility is one of the areas of an active and innovative policy of the city of Szczecin. This is confirmed by the ranking of the 50 largest Polish cities evaluated in 2019 in categories: Individual transport, public transport and urban

Table 13.2 The scope of organisational and financial activities in Szczecin’s development plans Projects included in the 2019–2023 Multiannual Development Programme for Szczecin Preparation of the 2035 Electromobility Development Strategy of the City of Szczecin (S_E-mobility 2035) within the framework of the priority programme “GEPARD II low-carbon transport Part 2 Ecomobility Development Strategy,” NFOŚiGW Electromobility Programme of the City of Szczecin – stage II Including: Adaptation to the electric bus service requirements Purchase of emission-free bus fleet Electric car and bicycle charging stations Conversion of the Klonowica depot – adaptation to the electric bus service requirements Purchase of emission-free bus fleet Purchase of electric cars for the Sailing Centre Source: Own study based on Resolution, 2019.

Amounts (PLN) 100,000

13,128,100 250,000 12,878,1200 156,000 320,000 25,000,000 500,000

Knowledge and innovation 4.0  267 Table 13.3 Structure of means of transport in Szczecin (in 2019) Type of vehicle Electric cars including golf cars motorcycles mopeds Hybrid cars - electrically powered - hydrogen-powered Buses hybrid electric

Number of vehicles 181 11 6 30 1,642 3 17 0 (8 under tender, delivery by end 2021)

Source: Own study (data from the electromobility centre).

policy. The capital of Zachodniopomorskie Voivodship can boast high results in this respect (Table 13.3). What makes the city of Szczecin stand out is its strategic approach to zerocarbon transport policy – it is one of the seven cities that have adopted the Electromobility Development Strategy. Szczecin has also gained one of the higher positions in the government programme “GEPARD II – Electromobility Strategy,” which significantly increased the percentage of electric vehicles in the city fleet already in 2018 (13%). Moreover, within the framework of the adopted urban policy, a sum of PLN 477,000 was spent on the construction of charging stations, which, compared to the total budget, gives it first place among all cities. Specific places in the ranking of electromobile cities operating within the ENEA Operator’s operational area are shown in Table 13.4. The “electric city’s” offer is gradually being enriched by bringing electromobility solutions to water transport, which is manifested by the purchase of electric boats and cars for the Szczecin Sailing Centre, allocating PLN 500,000 for this purpose. To supplement these expenses, the purchase of emission-free buses for the amount

Table 13.4 Ranks of electromobile cities within the ENEA Operator’s operational area Ranking of cities in different categories City

Personal transport

Public transport

Urban policy

Bydgoszcz Gorzów Wielkopolski Poznań Szczecin Zielona Góra

29 34 7 2 34

10 21 6 13 13

4 30 7 1 3

Source: Own study based on Helak (2019).

268  Radosław Miśkiewicz of PLN 12,878,100 is planned in Stage II Electromobility of the city of Szczecin. In order to develop hiking tourism together with other entities, it has planned to build and equip a scooter rental shop, electric bikes and even cars. The activities of the city of Szczecin have been appreciated twice in the national forum: In 2018 it was awarded the first-degree award for the best Electromobility Strategy in the category of cities with more than 100,000 inhabitants, and in 2019 the Polish Association of Alternative Fuels awarded Szczecin the title of “Electromobility Friendly City.”

Conclusion The development of new industries, including electromobility, would not be possible without stimulating market liberalisation processes or the authorities’ efforts to increase competitiveness. The solutions applied by the Dutch Organisation for Electric Transport (DOET) which brought together more than 100 companies and by doing so built a common space for the exchange of knowledge, technology transfer, experience and good cooperation practices need to be disseminated. The decision-making process has been improved, and a platform has been created for cooperation between business and government, which obviously translates into an opportunity of carrying out joint projects. This makes the electromobility sector fully interoperable. The development of electric vehicles on a large scale will not only change the way we use cars but also increase the demand for electricity and affect the way the power grid works now. That is why integrating electric vehicles into grids constitutes a major challenge. One way to face it is to implement new technologies such as V2G, a system that provides a bidirectional energy flow between the vehicle and the grid, enabling the energy stored in the car battery to be used to stabilise the grid. Electromobility has a chance to fully develop against the background of general changes in thinking about urban transport. This means that one of the upcoming technological changes will be the gradual dethroning of the internal combustion engine as the main driver of mobility. These challenges are linked to far-reaching changes in the organisation of urban mobility, its ecology, urban planning and often also the way of life of citizens. The Polish electromobility plan assumes the coordination of industry, market, social acceptance, infrastructure and regulation. The areas of development of energy innovations should be: An integrated and interconnected energy system giving a central role to the energy user, energy production and acquisition of raw materials combining reduction of environmental impact with safety, diversification of production technologies and efficient use of energy, ecological and energy-efficient city.

Discussion Information and Communication Technologies (ICT) which process, collect and transmit information in electronic form are most relevant to the development

Knowledge and innovation 4.0  269 of electromobility. By using the potential of ITC solutions, electromobility can be viewed from the perspective of many stakeholders: Drivers, energy and telecommunication companies, gas station owners, public space managers, traffic engineers and even insurers or financial institutions. The solutions they propose revolutionise the existing processes and accelerate the development of e-transport and its ecosystem.

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272  Radosław Miśkiewicz Kijowska, K. (2014), ‘Działania na rzecz zrównoważonego miejskiego transport towarowego w Polskich miastach: ocena i perspektywy rozwoju’, Logistyka, 3, pp. 2929–2937. [online] Available at: https​:/​/ww​​w​.cza​​sopis​​molog​​istyk​​a​.pl/​​compo​​nent/​​ jdown​​loads​​/send​​/298-​​artyk​​uly​-n​​a​-ply​​cie​​-c​​d​-1​/4​​113​-a​​rtyku​l (Accessed: 21.02.2020). Kleer, J. (2009), ‘Gospodarka oparta na wiedzy a globalizacja: związki czasowe i przyczynowe’, in: J. Kotowicz-Jawor (Eds.), GOW: wyzwanie dla Polski, pp. 72–89, Warsaw: PWE. Kourtit, K., Nijkamp P., Vught van F. (2014), ‘Clusters of supernova stars in knowledgebased spaces: Value creation through cooperation’, International Journal of Global Environmental Issues, 13(2–4), pp. 216–227. DOI: 10.1504/IJGENVI.2014.064502 Koźmiński, A. (2001), ‘Jak tworzyć gospodarkę opartą na wiedzy?’, in: Strategia rozwoju Polski u progu XXI wieku, Kancelaria Prezydenta RP i Komitet Prognoz Polska 2000 Plus, Warsaw: PAN. Kurtyka, M. (2018), ‘Rozwój elektromobilności w Polsce w kontekście wyzwań współczesnej polityki gospodarczej’, in: W. Drożdż (Eds.), Elektromobilność w rozwoju miast. Warsaw: PWN. Lundvall, B., Johnson, B. (1994), ‘The Learning Economy’, Journal of Industry Studies, 1(2), pp. 23–42. DOI: 10.1080/13662719400000002 Machado, C. (2016), ‘Human resource management: an operational perspective’, In: C. Machado, & J.P. Davim (Eds.), MBA. Theory and Application of Business and Management Principles. Management and Industrial Engineering. Switzerland, pp. 77–103. DOI: 10.1007/978-3-319-28281-7. ISBN 10: 331980314X ISBN 13: 9783319803142. Miśkiewicz, R. (2016), Knowledge Transfer in Merger and Acquisition Processes in the Metallurgical Industry. Warsaw: PWN. Miśkiewicz, R. (2019), Organizational Structure in the Process of Integration on the Example of Iron and Steel Industry Enterprises in Poland. Process Digitization in the Industry 4.0 Concept. Warsaw: PWN. Ministry of Science and Future Planning (MSIP) (Eds.) (2014), Annual Report on the Promotion of the Korean ICT Industry, Seoul 2014. [online] Available at: http:​//​eng​​lish.​​ msip.​​go​.kr​​/engl​​ish​/m​​sipCo​​ntent​​s​/con​​tents​​View.​​do​?ca​​teId=​​ms​se4​​2​&artId​=1233439 (Accessed: 21.02.2020). Nancu, D. (2015), ‘The knowledge assessment methodology of countries’, Ovidius University Annals, Economic Sciences Series, 2, pp. 156–159, Ovidius University of Constanza, Faculty of Economic Sciences, [online]. Available at: http:​/​/ste​​c​.uni​​v​-ovi​​ dius.​​ro​/ht​​ml​/an​​ale​/R​​O​/201​​5​/i2/​​ANALE​​%20vo​​l​%201​​5​%20i​​​ssue_​​2​_201​​5​_sit​​e​.pdf​ (Accessed: 21.02.2020). Nowak P. (2013), ‘Polska w rankingach gospodarek opartych na wiedzy’, Prace Komisji Geografii Przemysłu Polskiego Towarzystwa Geograficznego, no 22, pp. 25–43. Nordmann, A (2013), ‘Visioneering assessment. On the construction of tunnel visions for techno-visionary research and policy’, Science Technology and Innovation Studies, 9, pp. 89–94. [online] Available at: http:​//​www​​.sti-​​studi​​es​.de​​/ojs/​​index​​.php/​​sti​/a​​rticl​​e​/ dow​​​nload​​/154/​​120 (Accessed: 10.01.2020). Nosalska, K., Mazurek, G. (2018), ‘Przemysł 4.0 a sektor chemiczny gospodarki’, Przemysł Chemiczny, 5, pp. 1000–1003. DOI: 10.15199/62.2018.5.30 Osterwalder, A., Pigneur, Y. (2013), Tworzenie modeli biznesowych. Podręcznik wizjonera. Gliwice: Helion. Peters, M.A., Marginson, S., Murphy, P. (2009), Creativity and the Global Knowledge Economy. New York: Peter Lang. [online] Available at: https​:/​/re​​searc​​honli​​ne​.jc​​u​.edu​​ .au​/2​​3230/​​1​/232​​30​_Pe​​ters_​​et​_al​​_2009​​​_Fron​​t​_pag​​es​.pd​f (Accessed: 21.02.2020).

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274  Radosław Miśkiewicz Srinivasan, U., Thorne, A., & McFarlane, D. (2015). ‘Smart tracking to enable disturbance tolerant manufacturing through enhanced product intelligence’, in: 13th International Conference on Industrial Informatics (INDIN). Cambridge, 1354–1360. DOI: 10.1109/ INDIN.2015.7281932 Stabryła, A. (2015), ‘Koncepcja zarządzania wiedzą i rozwojem przedsiębiorstwa’, Zeszyty Naukowe Małopolskiej Wyższej Szkoły Ekonomicznej w Tarnowie, 1(26), pp. 169–178. [online] Available at: file:​///C:​/User​s/kaz​im/Do​wnloa​ds/Ko​ncepc​ja_za​rzadz​ania_​ wiedz​a%20(​2).pd​f (Accessed: 21.02.2020). Stadnicka, D., Zielecki, W. Sęp, J. (2017), ‘Koncepcja Przemysł 4.0: ocena możliwości wdrożenia na przykładzie wybranego przedsiębiorstwa’, in: R. Knosala (ed.), Innowacje w zarządzaniu i inżynierii produkcji. Opole: Oficyna Wydawnicza Polskiego Towarzystwa Zarządzania Produkcją, pp. 472–483. Stahl, W. (2018), ‘Rozwiązania V2G i G2V jako sposoby wykorzystania samochodów elektrycznych do zmiany kształtu krzywej obciążenia dobowego systemu elektroenergetycznego’, Zeszyty Naukowe Wydziału Elektrotechniki i Automatyki Politechniki Gdańskiej, Gdańsk, 61, pp. 69–72. [online] Available at: https://doi​.org​/10​ .32016​/1​.61​.15 (Accessed: 21.02.2020). Stahl, W., Bućko, W. (2019), ‘Analysis of the impact of charging electric cars on the power system load’, Acta Energetica, 1(38), pp. 95–101. DOI: 10.12736/ issn.2330-3022.2019108 Strategy for Responsible Development until 2020 (with an outlook until 2030), Document adopted by the resolution of the Council of Ministers of 14 February 2017 (in Polish). [online] Available at: https​:/​/ww​​w​.gov​​.pl​/w​​eb​/fu​​ndusz​​e​-reg​​iony/​​infor​​macje​​-o​-st​​rateg​​ii​ -na​​-rzec​​z​-odp​​ow​ied​​zialn​​ego​-r​​ozwoj​u (Accessed: 21.02.2020). Szulewski, P. (2016), ‘Koncepcje automatyki przemysłowej w środowisku Industry 4.0’, Mechanik, 7, pp. 574–578. DOI: 10.17814/mechanik.2016.7.221 Szum, K., Magruk, A. (2019), ‘Analiza uwarunkowań rozwoju Przemysłu 4.0 w województwie podlaskim’, Akademia Zarządzania, 3(2), pp. 75–76. [online] Available at: https​:/​/de​​pot​.c​​eon​.p​​l​/han​​dle​/1​​23456​​​789​/1​​7887 (Accessed: 21.02.2020). The concept of functioning of energy clusters in Poland (2017). Warsaw: KAPE, WiseEuropa, KIER at the request of the Minister of Energy (in Polish). [online] Available at: http:​/​/wis​​e​-eur​​opa​.e​​u​/wp-​​conte​​nt​/up​​loads​​/2017​​/03​/K​​oncep​​cja​_f​​unkcj​​ onowa​​nia​_k​​lastr​​ow​​:en​​ergii​​_PL​_2​​017​.p​​df (Accessed: 21.02.2020). Tietge, U., Mock, P., Lutsey, N., Campestrini, A. (2016), Comparison of Leading Electric Vehicle Policy and Deployment in Europe. Berlin: International Council on Clean Transportation. [online] Available at: https​:/​/th​​eicct​​.org/​​sites​​/defa​​ult​/f​​iles/​​publi​​catio​​ns​/ IC​​CT​_EV​​polic​​ies​-E​​​urope​​-2016​​05​.pd​f (Accessed: 21.02.2020). Tiwari, S.K., Korneliussen, T. (2018), ‘Exporting by experiential knowledge: A study of emerging market micro firms’, International Marketing Review, 35(5), pp. 833– 849. [online] Available at: https://doi​.org​/10​.1108​/IMR​-01​-2016​-0002 (Accessed: 21.02.2020). Transport of the future (2019). Report on road transport development prospects for 2020– 2030 (in Polish). Warsaw: PWC. [online] Available at: https​:/​/ww​​w​.pwc​​.pl​/e​​n​/pub​​likac​​ je​/20​​19​/tr​​anspo​​rt​-of​​-the-​​futur​​e​-pro​​spect​​s​-for​​-the-​​devel​​opmen​​t​-of-​​road-​​trans​​por​t-​​in​-po​​ land-​​2020-​​2030.​​html (Accessed: 21.02.2020). Uchwała, (2019), Uchwała nr XII/410/19 Rady Miasta Szczecin z dnia 26 listopada 2019 r. w sprawie zmiany Wieloletniego Programu Rozwoju Szczecina na lata 2019–2023. [online] Available at: http:​/​/bip​​.um​.s​​zczec​​in​.pl​​/file​​s​/DC2​​F01AD​​40834​​A83AB​​1223D​​ 41E9D​​​37D0/​​410​.p​​df (Accessed: 21.02.2020).

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Part 7

Quality in innovation





14 Innovation 4.0 – on the path to modernity, higher effectiveness and quality Ryszard Borowiecki and Barbara Siuta-Tokarska

Innovative activity of businesses as a source of their value creation Innovativeness of firms in the context of Economy 4.0 is approached geocentrically, which means that it is world markets that are becoming the basic levels of their activity instead of the domestic market. As a result, the integration of science and technique takes place, accompanied by the disappearance of differences between traditionally conducted scientific research and business activity (Innowacje w działalności przedsiębiorstw, 2005, p. 55). What is also observed is a visible change in the paradigm of businesses, manifested in the major significance of knowledge resources, which are the crucial value of entities conducting economic activity (Siuta-Tokarska, 2017, pp. 241–255; Siuta-Tokarska and Juchniewicz, 2019, pp. 45–58). Therefore, gaining and maintaining competitive advantage is possible by means of generating innovation in a firm, considering economic, social, technical, environmental factors, as well as mechanisms, methods, techniques and tools within the system of procedures and stimulating innovation in the economy. In this approach innovative activity in firms can be implemented with regard to two basic groups of goals (Szatkowski, 2016, pp. 27–28): 1. Technical goals, including technological ones; 2. Economy-related goals, including economic, social or environmental ones. Innovative activity itself1 should be understood as an element of the entrepreneurship, both individual and collective, of a business entity (Innowacje w działalności przedsiębiorstw, 2005, p. 55; Siuta-Tokarska and Kusio, 2020; SzczepańskaWoszczyna, 2018, p. 33–44). However, it requires favourable conditions and deliberate stimulation activities, related to the business model which would be future-oriented in terms of new quality and the structural-innovative function, as well as raising the value of the entity (Borowiecki and Siuta-Tokarska, 2016, pp. 207–220; 2017, pp. 163–176; Borowiecki et al., 2018a, pp. 197–230). In this respect, we can indicate different variants of activities of business entities, considering changes in the business model (ranging from traditional to new models) DOI:  10.4324/9781003184065-14

280  Ryszard Borowiecki and Barbara Siuta-Tokarska

Figure 14.1  A change in the business model in firms in the context of Innovation 4.0. Source: Ibarra, Ganzarain and Igartua (2018, p. 8).

and the type of innovation implemented in the firm (from incremental to radical ones2), which is depicted in Figure 14.1. In accordance with new management concepts competitive advantage of a firm shows in the ability of an entity to create value through innovation (SzczepańskaWoszczyna, 2015, p. 396), and in this approach creating new values is becoming one of the most significant goals of enterprises in Economy 4.0, remembering that a consumer does not expect competition but concentrates on the value he or she wants to pay for. What is more, nowadays it is exactly the customer/buyer and his priorities that are at the start of the so-called modern chain of values: Customers’ priorities → distribution channels → product offer → expenditure, raw materials → key resources, competencies (as opposed to the traditional chain) (Slywotzky et al., 2000, p. 36). Therefore, differences between incremental and radical innovation appear with regard to value creation, considering an entity creating ideas in the aspect of innovative activity of a firm from employees towards customers (Kaggermann, 2015, pp. 23–45; Ehret and Witz, 2017, pp. 111–130). The relationships are presented graphically in Figure 14.2. Thus, we can indicate that in Economy 4.0 building the chain of a firm’s values is related to the combination of its strategic concept and the effective use and constant renewal of resources and skills, and success, understood as the achievement of competitive advantage on the market, will depend on the adopted business model along with the vision of the future, choosing a new quality in the firm, as well as the structural-innovative function (Innowacje w działalności przedsiębiorstw, 2005, pp. 62–63; Borowiecki et al., 2018b, pp.71–85, c, pp. 93–121; 2019, pp. 161–170).

Innovation 4.0 – the notion and the essence Innovation is the basic determinant of processes taking place in the global economy. Together with knowledge and technologies, it is an attribute of creating a

Innovation 4.0 – on the path to modernity  281

Figure 14.2  Innovation 4.0: Sources of innovation versus value in a firm. Source: Etwaru R., https​:/​/ww​​w​.con​​stell​​ation​​r​.com​​/mess​​age​-c​​ios​-s​​top​-h​​oggin​​g​-inn​​ovati​​on​ -it​​s​-bus​​in​ess​​-ever​​yone-​​c​-sui​​te (as of 19 March 2020) with the use of own representation.

competitive advantage among enterprises (Wiśniewska, 2012, p. 71). Therefore, in the 21st century, economic innovation has become a response to turbulent changes in the environment, at the same time constituting a determinant but also a requirement of the progress of the civilisation, being also the driving force of the economy and its growth in the short term and of development in the long term (Innowacyjność w organizacji, 2012, p. 9). The essence and characteristics of innovation in an organisation allow it to show such elements as: ·· ··

Strategic character of innovations; Their multidimensional form.

The elements indicated above are a consequence of the volatility and the rising pace of changes in the environment of firms, dynamism, synergic permeation of the aforementioned elements and the economic effectiveness of a business entity. The variety of sources, types and methods of the implementation of innovation in the economy is also visible in the time approach (Figure 14.3), constituting a consequence of, among others, dynamism, scope, multidimensionality and turbulence of the environment of an organisation. In light of the time approach we can notice a clear change concerning the evolution of innovation models in the economy (Tidd, 2006, p. 8):

282  Ryszard Borowiecki and Barbara Siuta-Tokarska

Figure 14.3  On the path to Innovation 4.0. Source: “Smart industry: Dutch Industry fit for the future.” Cited after: https​:/​/tw​​itter​​.com/​​barba​​ra​_he​​deler​​/stat​​us​/97​​81729​​​ 88301​​43078​4 (as of 4 May 2020).

·· ··

Starting from linear models, like need pull, technology push; Through the coupling model (interactions and feedback between the elements), the integrated model (cooperation inside the firm with key suppliers and active customers) and the network model in which networking is used, flexible and customised activities are observed, as well as continuous innovation – including the model of so-called open innovation, concerning the way of acquiring and using knowledge for the needs of the creation of novel and effective market solutions, considering appropriate knowledge-based management in respect of knowledge, both co-created and shared.

Thus, from the point of view of changes undergoing in the economy, we can approach innovation as a process of changes purposefully introduced by man or (in particular, taking into consideration contemporary conditionings of their implementation) changes designed by the cybernetic system that consist of the replacement of the existing states of things by others, assessed positively in light of specific criteria, altogether making up progress (Pietrasiński, 1971, p. 9). Hence, progress, according to the above approach, has both a technical and socio-economic nature and should be linked to the idea of balancing capitals: Economic, social and natural ones, so that the innovation being introduced could really have a progressive character, and not neutral or regressive, for example (Madej, 1970, p. 13), in the holistic approach (the analysis of economic, social and environmental effects).

Types of innovation in Economy 4.0 Product and technological innovation (PT3) The term “product” is understood as a good, service or information consisting of a bundle of tangible and intangible attributes which are supposed to address

Innovation 4.0 – on the path to modernity  283 consumer needs and are exchanged for money or other units of value (Leksykon zarządzania, 2004, p. 442; Hamrol and Mantura, 2002). Considering products occurring on the market, we can classify them according to the following criteria: ·· ·· ·· ·· ·· ··

Purpose, e.g. industrial, consumption products; Durability and tangibility of a product, e.g. durable goods, non-durable goods and services; Values of goods and time of their use, e.g. ongoing consumption and permanent use goods; Product class/standard, e.g. standard products, popular products, luxurious products; Complexity and purpose of an intermediate and investment product, e.g. raw materials and materials, main equipment, auxiliary consumables, semi-finished products, process materials, professional services; Other.

As W. Pride and O. Farell indicate, a product is any single thing, both favourable and unfavourable, which we obtain in the process of exchange, thus, a set of tangible and intangible characteristics, including utilities and benefits, functional, social and psychological ones, among others. Ph. Kotler is of a similar opinion, emphasising that a product is anything that can be placed on the market, draw attention, be purchased, used or consumed, at the same time satisfying somebody’s desire or need (Encyklopedia marketingu, 1998, p. 252). Product is a composition of various attributes and values which the buyer obtains as a result of possessing and using it. Particularly important products in the context of Economy 4.0 are those which are included in so-called high technology, thus, goods and services4 characterised by high research and development intensity (R&D intensity). The high-tech product list is based on the calculations of R&D intensity by product groups (R&D expenditure/total sales) (European Commission, 2020, online). They are as follows: ·· ·· ·· ·· ·· ·· ·· ·· ··

Products related to the aviation and space industry (aerospace); Computers (computing and office equipment); Electronic and telecommunications goods (electronics telecommunications); Pharmaceuticals (pharmaceutical); Research and scientific instruments (scientific instruments); Electrical equipment; Nonelectrical equipment; Chemical products; Arms and ammunition (armaments).

and

Within high-tech knowledge-intensive services their following types are distinguished (European Commission, 2020, online):

284  Ryszard Borowiecki and Barbara Siuta-Tokarska ·· ·· ·· ·· ·· ··

Motion picture, video and television programme production, sound recording and music publishing activities; Programming and broadcasting activities; Telecommunications; Computer programming, consultancy and related activities; Information service activities; Scientific research and development.

Products in the context of Economy 4.0 are related to the applied technology in a special way. It arises from the fact that technological changes may progress at a different pace, but no matter whether they are faster or slower in specific fields, industries and types of activity, their connection with the product lifecycle is visible (Economy 4.0, 2017, p. 6). The definition of technology is presented by OECD as “the state of knowledge concerning ways of converting resources into outputs.”5 However, we can extend this approach a little, assuming after Stiegler (1998, p. 17), that technology is not only the manifestation of human knowledge but also a result of organisational activities, used for practical purposes, including economic applications. An example of a much broader approach is the definition of technology indicated by Burgelman et al. (1995, p. 2) in which it is emphasised that it is theoretical and practical knowledge, skills and artefacts which can be used to develop products and services, as well as for their production and delivery. Technology can be embodied in people, materials, cognitive and physical processes, plants, equipment and tools […] Technologies are usually a result of developmental activities within which the practical use of inventions and discoveries takes place. Depending on a given criterion, different divisions of technologies are adopted, and with regard to the firms themselves, we can indicate the occurrence of five levels of their technological advancement.6 However, regardless of the adopted criterion of the division of technologies, its existence is related to the development of knowledge and support from the broadly understood sector of science.7 The literature of the subject points to the occurrence of specific components of the contemporary technological system (Figure 14.4). The key component of the system of those mentioned is “Humanware,” that is human skills and talents, without which tools, machines and materials (technoware) would be useless, also in respect of their use in virtual space (cysnetware). Moreover, the indicated key component affects the acquisition of knowledge about manufacturing (infoware) or the organisation of the whole manufacturing process (orgaware). In this approach, it is a human being, with his knowledge, skills and competences, who is the centre of this system. However, in terms of arising challenges (Łobejko, 2018, pp. 641–644; Mayer-Schönberger and Cukier, 2014; AI revolution, 2017; Ford, 2016; Drogi do przemysłu 4.0., 2019; Skinner, 2018; Schwab, 2018) related not even to Economy 4.0 itself but to Economy

Innovation 4.0 – on the path to modernity  285

Figure 14.4  Interrelated components of the technological system in Economy 4.0. Source: Own study based on: Sharif, 2012, pp. 595–604.

5.0, we can ask the following question: Will perhaps the centre of this system be Human&AIware (human and artificial intelligence) or maybe only AIware? We leave this question open. In the context of revolution 4.0 we can point to nine basic technological trends forming the building blocks of Industry 4.0 (Figure 14.5). Of the indicated directions of the transformations of Industry 4.0 with the use of new technologies, the following are identified: ·· ·· ·· ·· ·· ·· ·· ·· ··

Autonomous robots,8 Simulation,9 Horizontal and vertical system integrations,10 Internet of Things and Services,11 Cybersecurity,12 Computation clouds,13 Additive manufacturing,14 Augmented reality,15 Big data and analytics.16

Organisational and marketing innovations (OM) Organisational innovation is defined as the introduction of a new way of organising the supplier-customer relationship management, human resources or a new approach to the organisation of external relations. Its aim is, most broadly, to

286  Ryszard Borowiecki and Barbara Siuta-Tokarska

Figure 14.5  Transforming Industry 4.0. by technologies. Source: BCG, https​:/​/ww​​w​.bcg​​ .com/​​pl​-pl​​/capa​​bilit​​ies​/o​​perat​​ions/​​embra​​cing-​​indus​​try​-4​​.0​-re​​disco​​​verin​​g​-gro​​ wth​.a​​spx (as of 18 March 2020).

raise the effectiveness of the firm’s functioning on the market, which is related to cost reduction, improvement of workers’ satisfaction from the way the workplace is organised, and consequently an increase in their efficiency, gaining access to assets which are not for sale, for example, non-codified external knowledge, the reduction of the delivery costs of supplies, etc. Therefore, organisational innovation should contribute to the intensification of the exchange of information in the firm and with its external environment and to the improvement of the ability of the firm to learn and use new knowledge and technologies. Creating innovation is conditioned by the processes of the systemic shaping of innovative climate and culture in individual organisations and in whole societies (Baruk, 2006, pp. 183–189). Organisational innovations are most often discussed in two meanings (Unsworth et al., 2012, pp. 1250004–1250039; Luecke and Katz, 2003, p. 2): 1. An idea, the practice of a tangible artefact, perceived as a novelty by the adapting entity; 2. Generally understood implementation of a new thing or method, personification, combination or the synthesis of knowledge in original, meaningful products (goods and services) or processes with a new value.

Innovation 4.0 – on the path to modernity  287 In effect, organisational innovation can take different forms: from a new manufacturing method, through new approaches to the organisation of work, and ending with the strategic management methodology (Czekaj and Ćwiklicki, 2014, p. 24). From the point of view of organisational innovation 4.0, those resources are significant which participate in the creation of a new value. And taking into consideration that it is knowledge (starting from information) and the ability to use it (management with the use of big data and advanced analytics) that are special resources, we can point to resource-based management areas as examples of organisational innovation (Table 14.1). What is noted within Innovation 4.0 is a typical for knowledge-based economy departure from the innovation implementation formula of an autonomous firm to the benefit of an open organisation, deprived of boundaries, with flexible relationships with the environment (Lachiewicz, 2014, p. 155). Table 14.1 The division of organisational innovation in a firm from the point of view of organisatorics Innovation categories

Resource-based areas of management Information resources Human resources

In the firm itself

Co-created with the environment

Static (structural) Information needs Duties and Information resources responsibilities Information carriers Competency profiles of Information system positions ICT structure Scales of qualifications Recruitment and personnel selection system Working time organisation system Forms of employment Performance review system Remuneration system Dynamic Information processes Division of work Distribution of tasks, (process) Communication entitlements and processes responsibilities Information and Staffing communication Tariffication of work networks Professional development Information and processes communication Position and remuneration bonds promotion procedures Openness, no Network, corporation Relating and division of boundaries links work with the use of Integration system modern machines and devices, including autonomous robots

Source: Own study based on Czekaj, 2013, p. 30.

288  Ryszard Borowiecki and Barbara Siuta-Tokarska To sum up the deliberations on organisational innovation, we can point to their two basic categories: 1. In the firm itself, including: ·· In the area of workplace organisation: New tasks, entitlements, responsibilities, changes concerning working time and method of work, the system of valid norms and standards of work, work quality, administrative and logistics services, organisational and logistic equipment, the system of training or professional development; ·· In the structural area, including: Organisational structure, general organisation rules (mergers, divisions, creating new organisational units, changes in information flow and decision making, e.g. decentralisation). 2. In terms of organisational relations with the environment, including: Mergers and acquisitions processes, outsourcing, joint ventures, network and cooperation relationships, and other activities of this type. Marketing innovation is the introduction of a new method of promotion, valuation or sale of products/services, significant changes in the aesthetic design or packaging of the offered products. It should be pointed here that significant factors influencing the process of creating marketing innovation in a firm include (Kotler and Keller, 2012, p. 14): ·· ·· ·· ·· ··

The phenomenon of the globalisation of economy, the internationalisation of trade included; Conditionings affecting a change in buyers’ behaviours; Market behaviours of competitors; Development of new information technologies; A trend of crossing boundaries of the industry, also called industry convergence.

On the other hand, internal conditionings of these processes in businesses primarily arise from the need to reinforce their market position and achieve certain financial results, in connection with the adopted vision and development strategy, as well as with the possessed resources: human, tangible, financial, technological and intangible ones (Sławińska, 2015, p. 162). Marketing 4.0 can be understood as a specific and extremely fast (in comparison with the existing one) cyber marketing, consisting of the system of stimuli and feedback and reaction (Świeczak, 2017, p. 168). This marketing differs significantly from 1.0 or 2.0, and the differences include marketing orientation, marketing philosophy and to a great extent arise from the level of digital maturity17 of a given firm (Table 14.2). Therefore, Marketing 4.0 is a result of many complex changes, related to the occurrence of new technologies and groundbreaking marketing innovations. It is characterised by customer orientation along with individualisation of demand, the transformation of the marketing system in the context of new approaches to

Innovation 4.0 – on the path to modernity  289 Table 14.2 From Marketing 1.0 to Marketing 4.0 – conditionings and characteristics of firms Specification

Firms with low to medium Firm with developed and mature level of digital development level of digital development

Conditions of implementing a given evolution stage of the firm’s marketing Model of a firm Based on assembly line Based on services Business processes Vertical linear processes Dynamic cooperation, with the support from arising global platforms, closely connected with the physical world Organisational structure Hierarchical/ rigid Network/dynamic Character of goods Planned Upon request and services manufacturing Management Traditional Modern methods, tools and means, e.g. the Kanban method Marketing Marketing evolution Marketing 1.0 and 2.0 Marketing 3.0 and 4.0 stage Marketing orientation Product orientation Customer orientation Marketing organisation Rigid/hierarchical Network/flexible Marketing philosophy Transactional marketing Social marketing Source: Own study based on: http:​/​/www​​.ey​.c​​om​/Pu​​blica​​tion/​​vwLUA​​ssets​​/EY​-e​​nterp​​rise-​​3​-0​-a​​-digi​​​ tal​-e​​nterp​​rise/​$FILE​/EY​-e​​nterp​​rise-​​3​-0​-a​​-digi​​tal​-e​​nter​p​​rise.​​pdf (as of 14 April 2020), Schwab, 2018, p. 80.

marketing activities owing to the digitalisation of this system in the centre of which there is a customer. The implementation process of Marketing 4.0 stands out in terms of: ·· ·· ·· ··

Time; Talent, data, analytics management; Centralisation level; as well as Organisational models of marketing activities.

Time planning of innovation in Marketing 4.0 often has the form of cascade planning (reflecting self-arising and self-reproducing process of organisational development in a dynamic environment) and the so-called “scrum” approach (marketing initiatives are broken down into so-called sprints lasting from two to four weeks, which gives a possibility to enter updates if customers’ requirements change) (Świeczak, 2017, p. 170). This planning is expressed in talent, data and analytics management, which becomes visible in the search for specialists. As a result, three fundamental functional areas in a firm arise: Consumer analyses, advanced analytics and data management.

290  Ryszard Borowiecki and Barbara Siuta-Tokarska The level of centralisation of an entity implementing Innovation 4.0 can vary. It depends on the type of the entity’s activity, the size class of the business entity, the level of its digital maturity, as well as the frequency of typically personalised orders (Świeczak, 2017, p. 170). On the other hand, in marketing activities models of the organisation, we can see the focus on: Products, segments, channels, geographical locations or functions (Świeczak, 2017, p. 170). The aforementioned external and internal conditioning of the process of creating Marketing Innovation 4.0 in a firm will influence the value created for the customer, considering the use of individual marketing methods, techniques and tools. Research into the tools used in Marketing Innovation 4.0 indicates their variety (Ungerman and Dědková, 2017; Ungerman et al., 2018, pp. 132–148). In practice, we can distinguish, among others (Ungerman and Dědková, 2019): ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ·· ··

Additive production; Augmented reality; Virtual reality; Virtual currency (crypto-currency); Autonomous distribution; Organising events; Relationship marketing; Product placement on shared multimedia; Mobile app marketing; Quality function deployment; Product and packaging ecodesign; Internet of Things; Circular economy; Guerrilla and viral marketing; Advergaming; Employer branding; Individual marketing using social media; Others.

Ecological innovation (PTOM) – on the path to sustainable development Ecological innovation has become one of the leading challenges of the development of the 20th- and 21st-century economy. We can look for the reasons for intensified search for ecological innovation in the following dimensions (Woźniak, 2010, p. 8): ·· ··

Ecological dimension: Lower supply of scarce, more expensive raw materials, limited capacity of the environment for waste, the collapse of numerous ecosystems or their elements, and others; Social dimension: The search for new jobs, an increase in the safety of workplaces, and health safety of products used;

Innovation 4.0 – on the path to modernity  291 ··

Economic dimension: The search for cheaper solutions, particularly in the conditions of the internationalisation of manufacturing and consumption costs.

Ecological innovation18 can be defined as launching products and broadly understood processes to the market19 (organisational or marketing ones also included),20 constituting a specific value for customers (consumers and business), with the simultaneous limitation of negative influence on the natural environment, including the limitation of the use of resources and energy, and with progress – also the implementation of pro-environmental activities (such as restoration of the environment to the natural state), which would contribute to the achievement of sustainable development (Ekoinnowacje, 2010, p. 8). Sustainable development21 should be understood as a balance22 between natural, social and economic capital, which is necessary for the proper existence of life on Earth. From the point of view of the economy, its implementation gives an opportunity (Ekoinnowacje– klucz, 2012, online): ·· ·· ·· ·· ··

To facilitate the optimisation of potential in respect of economic growth; To take challenges arising from climatic changes, the shortage of natural resources and vanishing biological diversity; To improve the health of society and raise the ecological awareness of society; For the emergence of new markets, which is related to new jobs; To improve the quality and changes in the structures of industrial metabolism.

Therefore, the criteria of ecological innovation are included in at least two basic ways, compared below, elements of the assessment of the impact of innovation on the environment (Klemmer et al., 1999; Rennings, 2000, pp. 319–332; Ziółkowski, 2010, p. 28): 1) Its direct impact: Whether a given innovation decreases the environmental load generated by man, thus contributing to: ·· Reduction of the use of energy and raw materials; ·· Reduction of the use of soil (e.g. its depletion); ·· Reduction of waste emissions; ·· Maintenance of biodiversity and landscapes; 2) Its indirect influence: Whether a given investment contributes to the achievement of ecological goals within the strategy of sustainable and permanent development – established by the environmental policy or society. In the context of Economy 4.0 ecological innovation is related to the influence on (Munodawafa and Johl, 2018, pp. 1–20; Lee and Min, 2015): ··

Technological areas, including: Those introducing significant changes in the methods of production and the delivery of products;

292  Ryszard Borowiecki and Barbara Siuta-Tokarska ·· ·· ··

··

Social areas, including: Methods of engaging the creative potential of society for sustainable living, increasing social awareness on eco-innovation; Institutional areas, including: Cooperation platforms, informal groups, networks dealing with environmental issues; Organisational areas, including: The implementation of methods, techniques and organisational tools and management systems to the benefit of the natural environment in terms of production, distribution and consumption, organisation of green R&D; Marketing areas, including: New methods and channels of communication, changes in distribution, promotion, price.

Considering the economic sectors, which are particularly important from the social and ecological point of view, ecological innovation influences strategic activities within the scope of (Woźniak, 2010, pp. 22, 23): ··

··

··

·· ·· ·· ··

The food management sector through: Eco-innovative methods of agricultural production and ecological methods of food processing (in particular, ecological agriculture methods enriched with scientific progress in that area), ecological solutions increasing water resources of the farming environment and biodiversity (including modern technologies of the restoration of watercourses and conservation breeding of traditional and regional breeds), regional and traditional methods of food production. The energy sector: Eco-technologies decreasing demand for energy, ecoinnovations using solar energy, wasted energy recovery technologies, cogeneration, trigeneration), as well as other solutions for the use of renewable energy, technologies for using cell processes of energy conversion. The construction sector: Energy-saving and helios heating construction technologies, technologies using natural building materials (even production of elements made of raw clay), integrated design technologies in the structure’s life cycle, autonomous construction technologies. The transport sector: Technologies of the use of renewable and biodegradable resources, the use of solar energy through external coatings, eco-technologies of public transport, the use of hydrogen fuel. Medicine: Eco-solutions which serve for maintaining human health, new generations of medicines basing on natural compounds, eco-technologies using a positive influence of natural processes on the human body. Green chemistry: Eco-innovative fully degradable new generations of plastics, technologies using living organisms in bioreactors. The environmental protection industry and industrial technologies of cleaner or clean production, including: Eco-innovative solutions for the elimination and biodegradation of pollutants.

However, as it is rightly observed by professor Woźniak (2010, p. 23), it is equally important to eliminate obsolete technologies, as well as solutions whose effect on the environment and humans is not known enough to us (in accordance with the

Innovation 4.0 – on the path to modernity  293 prudence principle), in spite of the fact that they meet or in a given period of time met the criteria of the assessment of innovation, e.g. waste incineration technologies (wasting useful raw materials and polluting the atmosphere), environment dehumidification and canalisation technologies of watercourses (limiting poor water resources of a country, etc.). The problem of the lack of sufficient knowledge is also related to the release of genetically modified organisms into the environment, as we will never be able to remove such changes from the environment. It should be emphasised that the implementation of ecological innovation requires a long-term view, based on the provision of real effects serving people and the natural environment they live in, and not only the implementation of strictly technical or economic goals, even if they correspond with the assumptions adopted in the understanding of innovation.

Effectiveness and quality – a requirement of Innovation 4.0 Effectiveness is not defined as one, commonly understood and interpreted semantic term. It is a term analysed from many perspectives, with the indication that the properties of effectiveness should be studied in the context in which it is measured.23 Therefore, we can assume that effectiveness is a multidimensional notion.24 M. Holstein-Beck indicates six notional categories making up the understanding of the content and scope of the term “effectiveness.” They are (Holstein-Beck, 1997, pp. 45–67): 1) Efficiency – in the techno-economic approach by Harrington Emmerson; 2) Performance – in the praxeological approach by Tadeusz Pszczołowski; 3) Competence – in the organisational-bureaucratic approach by Max Weber and Richard Beckhard; 4) Functionality – in the humanistic approach by Douglas McGregor, James L. Price, David J. Lawless; 5) Communication – in the personality approach by Burt K. Scanlan, Kazimierz Obuchowski; 6) Morality – in the ecological approach by Woźniak (2010, p. 23). The notion of effectiveness according to the 3E principle is directly connected with cost efficiency, but also ethics, including distributive justice. We cannot adopt praxeological criteria only (effectiveness – cost efficiency), as it would omit the permissions of society members for activities that are undertaken (Gasparski, 2008). Therefore, only the consideration of those three interconnected relationships gives a basis for the proper understanding of the problem of effectiveness (Figure 14.6). In the authors’ opinion, the strive to ensure effectiveness was preceded by ethics so that undertaken activities could truly serve an individual/ society. On the other hand, ensuring effectiveness should also contribute to cost efficiency of activities as a consequence of achieving it, while ensuring cost efficiency, depending on the adopted criteria, should influence an increase in the effectiveness of undertaken activities.

294  Ryszard Borowiecki and Barbara Siuta-Tokarska

Figure 14.6  3E principle in the interpretation of R. Borowiecki and B. Siuta-Tokarska. Source: Own study.

Approaches in studies on effectiveness differ, among others, with the time horizon in which the analysis is made. Then, the following are distinguished (Kozuń-Cieślak, 2013, p. 17): ··

··

Dynamic effectiveness, concerning the capability of growth and development considering a long-time perspective (explained on the grounds of heterodox evolutionary economics); and Static effectiveness, concerning the avoidance of the wastefulness of the resources possessed and their best allocation (connection with the Pareto optimality concept and the marginal concept of general equilibrium).25

A more detailed presentation of the indicated approaches to effectiveness is shown in Figure 14.7. In Figure 14.7 different types of component effectiveness are presented, included in the static and dynamic effectiveness. About technical effectiveness and effectiveness X, we can say after P. Drucker that it is “doing things right.” Effectiveness of production assumes that firms apply the least expensive resources of the factors of production, the best available technologies and production processes, use potential economies of scale and minimise the wastefulness of resources in production processes. Allocative effectiveness is related to the distribution of goods (maximising net gain obtained from their use) and allocating resources to specific activities. Allocative effectiveness, to quote P. Drucker, could be defined as “doing the right things.” Dynamic effectiveness, and innovative and anticipatory effectiveness within its approach, as well as adaptive effectiveness required to consider the fact that developmental changes are of evolutionary character, thus decisions from one period will influence the next ones. In the context of studies on effectiveness, it should be emphasised that static and dynamic effectiveness are not

Innovation 4.0 – on the path to modernity  295

Figure 14.7  Typology of effectiveness. Source: Kozuń-Cieślak (2013, p. 21) with the use of own representation.

totally disjoint phenomena despite the fact that the time approach differentiates them. The notion of quality, according to W.E. Deming is “the way of thinking that makes new solutions be applied and constantly looked for,” thus referring in a special way to the research area in the context of innovation. Quality can be defined as a category meaning a property, kind, type, value of a given object, and more precisely, an attribute or a set of attributes distinguishing a given object from others, or the entirety of the attributes of a given object, significant because of its internal structure, its relations, influences and relationships with the environment. Therefore, quality is a multidimensional

296  Ryszard Borowiecki and Barbara Siuta-Tokarska and interdisciplinary notion.26 In the philosophical approach, it is a metaphysical category opposing quantity. Moreover, we can isolate primary qualities (e.g. strength, mass, movement) which are objective, and those which are called secondary qualities (e.g. colour, sound, smell), sensual ones, which, in turn, are of a subjective character.27 Within the assessment which is the basis for expressing an opinion on quality the following can be taken into consideration (Roszak, 2014, p. 13): ·· ··

··

The characteristics of an object, such as: The shape, structure, chemical composition, mass, colour, smell or the ability to perform certain functions; The basic factors determining the competitiveness of the product, namely performance, durability and reliability of its functioning, as well as aesthetic qualities, its impact on the user’s health and safety, its influence on the environment; Other, such as complementary functional features, compliance with requirements,28 modernity.

Quality can be discussed both from the point of view of the manufacturer and the consumer, considering the stages of the product life cycle, that is product design quality, implementation processes, workmanship quality, functional and service use quality. Moreover, taking into consideration the transformational character of quality, we can point to: ·· ·· ··

Required quality; Target quality; and Adjusted quality.

The criteria of the quality division presented above show the multidimensionality of its understanding. Therefore, we can indicate that contemporary science, in spite of centuries-old tradition (since Plato and Aristotle) still struggles with the standardisation of this notion, which to a great extent arises from its abstract character, as it “does not exist in itself, but must be discussed in relation to the goal it should serve” (Olejnik and Wieczorek, 1982, p. 124). The analysis of the contents presented in the previous chapters of this publication on Innovation 4.0, and the problems of effectiveness and quality in the context of dilemmas and challenges in the 21st-century economy which are marked nowadays leads to the view of the relationship of these issues in the subject area of sustainable and permanent development. It means that activities for higher effectiveness and quality through innovation implemented in Economy 4.0 cannot be deprived of the fundamentals of ethics, and what is more, the actual implementation of the sustainable and permanent development idea, as a sine qua non for the existence of life on Earth, requires their realisation on the basis of ethics, with the simultaneous necessity to exclude egoism and a short-term look, both in the micro-, meso- and macro-economic aspect. Without a doubt, Innovation 4.0 is changing the contemporary world, however, without its implementation on the

Innovation 4.0 – on the path to modernity  297 foundations of the relationship of ethics and morality they can bring results that will be opposite to the desired ones.29

Notes 1 According to the definition by OECD, “an innovation-active enterprise is an enterprise which in the studied period placed at least one product or business process innovation on the market or which implemented at least one innovative process that was interrupted or abandoned in that period (was not successfully completed) or that had not been completed by the end of that period (i.e. it continues).” 2 Ranging from gradual, evolutionary innovation, also called incremental innovation, to groundbreaking, pioneer innovation. 3 The authors deliberately used the term “technological innovation” (instead of “process innovation” used in the methodological terminology of statistical offices) assuming that the term “technological innovation” is broader and better conveys the conditionings of the implementation of innovation in Economy 4.0. 4 So-called knowledge-intensive services (KIS). 5 Indicating that technology can occur in a tangible form, manifested in products, but also in an intangible form (projects, research findings, organisational techniques). Measuring Productivity, 2001, pp. 11, 125. 6 Level I (low): Simple products and techniques, duplicated operations, know-how of primarily craft character, scarce application of scientific principles; level II (mediumlow): Of the basic technology embodied in machines and devices, a low scope of technical skills and applying scientific principles; level III (medium): Considerable skills as far as processes and products, some level of advanced technologies, using mastered technique; level IV (medium-high): Modern devices and technologies, implementation of the basic research and scientific programmes, using modern market technologies, really high skills as far as processes and products; level V (high): Global technological leadership, combining modern technologies, extending scientific base, strategy and organisation of activities in order to achieve competitive advantage on the market. 7 Some authors, for example, A. Bouras and V. Albe, argue that scientific discoveries precede technological applications, others, on the other hand, for example M. Kondo, emphasise that at present technologies have become more based on science, particularly in the case of the high technology sector (Gudanowska, 2015, p. 197). 8 Autonomous robots are robots that receive information from the environment (sensors), process obtained information and affect the environment (so-called effectors). They are even able to make decisions independently, and within them systems are created, which comprise: Equipment platforms and operating systems (OS), groups of many robots cooperating with each other, so-called agents or systems considering decision-making processes, controlling robots. 9 Simulations and modelling are activities which, with the use of adequate tools, may influence the optimisation of the present and the future, e.g. planned processes, identification and limitation of losses, cost reduction and an increase in company revenues. It is related to conducting simulation experiments enabling to choose the best solution proven by the results. 10 Within Economy 4.0 businesses can be integrated with each other horizontally and vertically, owing to which data and information can be exchanged between those entities and outside their “walls.” 11 The term Internet of Things (“IoT”) comprises the global network of physical objects, systems, platforms and applications, within which communication and sharing intelligence between objects, external environment and people take place. Via the system of individual identification “things” like sensors, actuators (e.g. drive elements transforming electronic signals into mechanical movement, temperature, pressure and oth-

298  Ryszard Borowiecki and Barbara Siuta-Tokarska ers) or RFID tags (i.e. labels, chips, carriers applied in the use of the technology of remote identification of objects or people) can interact with each other and cooperate to achieve the adopted goal. On the other hand, the Internet of Services (IoS) represents services with their functionality, which can arise as a service created based on components from various providers, available to be used “upon request”, and which are characterised by the possibility of mutual integration. 12 The idea of cybersecurity is the provision of possibly reliable communication, as well as advanced identification systems which give access to data of devices to their users. In the case of Economy 4.0 as a whole, the term cybersecurity will be connected with the ability and use of such protection systems which will be possibly the best (the safest) in given conditions in the context of the life of the virtual world. 13 More on the computation cloud: See Chapter 5. 14 “Additive manufacturing (AM) is an umbrella term for different manufacturing methods that aim to manufacture complex three-dimensional shapes by adding material successively” (Wiberg, Persson and Ölvander, 2019, pp. 1080–1094). 15 More on virtual and augmented reality: See Chapter 5. 16 The term “Big data and analytics” should be understood as data which represent information having interpretation appropriate for communication, further interpretation or processing. Large sets of data are created from different sources and are not homogeneous. Therefore, big data are data sets which are generated automatically and with high frequency, then subject to analysis and special ways of processing. Their proper analysis enables to improve the functioning of an organisation. 17 Digital maturity level can be measured based on the so-called Digital Intelligence Quotient developed by McKinsey. On its basis, three types of businesses can be distinguished according to their digital activity. They are: Established leaders, emerging leaders and followers. Taking into consideration strategies of firms in respect of their innovation, taking into consideration digital activity, the entities can be divided into: • • •

Firms in which innovation takes place to a smaller scale; Firms in which a leader of changes is followed – so-called digital migrants; Firms in which business models are transformed.

18 One of the first definitions of ecological innovation was presented by M. Carley and P. Spapens, who defined it as “intentional conduct characterized by initiative, comprising the stage of product design and integrated management during its life cycle, which subsequently contributes to pro-ecological modernization of the industrial era’s societies, by accounting for environmental issues in the development of products and related processes. […] They lead to integrated solutions aimed at reducing the expenditure of resources and energy, while simultaneously improving the quality of products and services.” 19 Ecological innovations are both technical innovations and extra-technical ones, which bring benefits to the environment through prevention and limitation of negative effects of human activity, and contribute to the optimisation of the use of resources. 20 The authors marked ecological innovation with the abbreviation PTOM, namely innovation which can be implemented within product, process, organisation and marketing innovations. 21 The first document via which the idea of sustainable development was adopted “somewhat permanently” to the public space, showing the problem of imbalance in the development of the world was a report prepared under the supervision of G. H. Brundtland, entitled: “Our Common Future.” The report indicated that sustainable development is the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” 22 It should be emphasised that it is not about balance in the mathematical sense but the provision of a different – than the present state of permanent imbalance – state of

Innovation 4.0 – on the path to modernity  299 sustainability. Measures of natural, social and economic capital are different, thus, the notion of the sum of those capitals does not have the mathematical (measurement) expression, but only a demonstrative character. 23 What is more, some researchers emphasise that there is no universal criterion of the effectiveness of activities, since activities may be effective from one point of view and ineffective from another, depending on the adopted criteria and the subject assessing (Pyszka, 2015, p. 16; Zapłata, 2009, p. 39). 24 An analysis of the literature of the subject entitles to point to at least several explanations of the term effectiveness, understanding of which can be different: 1) As a condition/element of achieving efficacy; 2) As a criterion of the assessment of efficacy; 3) Recognising efficacy and effectiveness as independent categories, e.g. a firm can be effective and efficacious, effective and inefficacious, ineffective and inefficacious and ineffective and inefficacious; 4) Recognising effectiveness as a relation: productivity/efficiency; 5) Understanding effectiveness as the allocation of resources in the Pareto sense. 25 Oligopolies and monopolies lead to the disturbance of static effectiveness. 26 The aspect of multidimensionality of quality according to D. Garvin (1988, pp. 40–41) includes: • • • • •

Absolute quality; Quality referring to the product; Quality related to manufacturing; Quality from the user’s perspective; Quality formulated with regard to value.

27 Moreover, quality is distinguished as: • • •

•

Sociological, as customers’ response to specific quality attributes; Humanistic, as creating appropriate quality of living and work increasing the level of culture in society; Technical and production, as physiochemical properties; a function of tangible features of a product. High technical and production quality means that a given good or production departs little from models known in technique, in this case representing the achievement of technical knowledge; Economic (marketing included), as a level of the compliance of a product with the recipient’s requirements, including his needs, income and price of a good (as well as his satisfaction) (Bielawa, 2011, p. 145).

28 According to PN-EN ISO 9000 quality is defined as “the degree to which a set of inherent characteristics fulfills requirements”, but the requirement is defined here as a need or expectation, that is stated, generally implied or obligatory. 29 An example of negative research (it could be called the contemporary innovation), which revolutionised the existence of the world in the 20th century was the creation of the atomic bomb. Let us not experience similar revolutions in the 21st century to fit Economy 4.0 or 5.0!

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15 Shareholders in creating the value of IT sector companies by shaping organisational culture in the context of the digital economy Katarzyna Szczepańska-Woszczyna, Wojciech Muras and Marta Pikiewicz IT sector and digital transformation trend The IT sector belongs to a group of innovative sectors with growing prospects in the global economy, especially in the context of the digital economy. The companies in this sector are often companies that effectively implement innovation or create a new market by promoting their products and services. The sector is currently undergoing strong transformations, which will become even more intense in the coming years. Many companies in the IT sector are undergoing a transformation from a “reseller” (global suppliers’ partner, limiting its participation to representation) to the role of a strategic partner, supplier, advisor and service provider in IT projects (defined as SSP – Strategic Service Provider). There is low development potential for hardware providers and good prospects for those IT companies which in their business models and strategic choices are focused on providing IT in the service model, consulting and data distribution together with application solution providers. The Hatalska Institute claims that the digital transformation will change the nature of industries and give them new opportunities for development. According to analyses of the research company IDC, global spending on digital transformation was to reach USD 1.7 billion (1012) by the end of 2019 (Hatalska, 2019). This is 42% more than in 2017. Companies invest mainly in technologies such as the Internet of Things, cloud computing, business analytics and machine learning. The IT sector, which is assigned to innovative, new technology sectors, must react quickly to changes in other economic sectors and propose new business models themselves. It is not insignificant that other sectors of the economy are increasingly expecting the IT sector to participate in research and development and to seek innovation at both the process and the product level. The IT sector provides opportunities for other sectors of the economy which result from decision-making opportunities provided by rapid access to data and their analysis, which translates into rational decisions and their relevance. IT brings real benefits to enterprises are identified: enterprise efficiency, increasing its agility, shaping new products and services and updating and constructing new business models. As a result, the available capabilities allow for effective DOI:  10.4324/9781003184065-15

Shareholders in creating the value of IT  305 implementation of the “data driven company” paradigm, i.e. enterprise management based on data. Such a view is strongly in line with the digital transformation trend. Such trends as cloud, big data, artificial intelligence or 3D printing are part of the concept of digitisation. At the same time, there is an increasingly often noticed view that effective application of IT (in particular the indicated trends) requires strong leaders of change, who will not only lead change in a thoughtful way but will do so while building understanding and motivation for colleagues. The IT sector, representing, on the one hand, a group of high-tech sectors, on the other hand, however, is limited in its experience related to shaping the influence of shareholders on the management of company value, especially in the long term. The challenges arising from the search for the adequate for the set goals right place and tasks for shareholders to perform and the strategic choices expressed in the development strategy in the context of accepting high risk (aggressive strategy) or minimising it (defensive strategy) are also becoming increasingly evident.

Organisational culture as a tool for constructing a competitive advantage The concept of organisational culture is an integral part of business management, as confirmed by numerous scientific publications and consultancy articles, where organisational culture is indicated as an element that differentiates a company and creates opportunities for the creation of its values (Szmurło, 2013). Companies in a given industry, despite manufacturing similar products and services, may, through a properly shaped organisational culture, differ in their approach to the customer, the quality of goods manufactured, the attitudes of employees or relations with the business environment. Following this path, an analogy can be found between the individualistic approach of people and companies where, although they have similar characteristics, it is difficult to identify two identical units. Own rules make it possible to stand out from the environment, which can be used for profit. Organisational culture is referred to as the “autonomous nervous system of an organisation” (Kilman et al., 1985), a sort of genetic code of the community, which is in the social awareness and which causes repeatability of both individual and collective behaviours, images, emotions and attitudes (Koźmiński and Obłój, 1989, p. 202). Wilkins and Ouchi (1983) define organisational culture as a set of symbols, ceremonies and myths that enable participants to understand their underlying organisational assumptions and values. Corporate culture is a system of values, norms and symbols typical for a company, which develop over a long time, and its result is the establishment of best practices for the entire social group and the specific hierarchy of values (Straub et al., 2002). Aniszewska and Gielnicka (1999) believe that the sources creating the organisational culture begin at three points, namely: The environment, the organisation and its participants. The environment depends on such variables as socio-cultural variables, economic variables, legal regulations and technological trends. The organisation is made of mission, vision, traditions, size, strategies and

306  Katarzyna Szczepańska-Woszczyna et al. preferred management styles. The role of the participants in the company’s culture is primarily their quality, needs and values. According to Jabłonowska and Myśliwiec (2006), the organisational culture of a company is made of all the behaviour of its employees which is connected with their work, solving problems and conflicts. Bańka (2011) asserts that organisational culture is a method of orderly behaviour and attitudes of employees in relation to the company’s strategy and the objectives it sets, as well as the general behaviour adopted in the company towards the internal and external environment. More specifically, culture is the co-creation of the company’s strategy and mission based on the same beliefs and ways of achieving them. In turn, as Szmurło (2013) describes this issue, organisational culture in an enterprise fulfils two functions: External and internal. External functions cover problems related to the achievement of the company’s goals. Thanks to culture, a company has its own personality, which is distinctive. The internal function is responsible for the integration, cooperation, alignment and unity of employees. As a result, the right combination of the company’s resources and developed culture can make a significant contribution to the company’s efficiency, which in turn is visible in its ability to generate profits. This concept has been developed by Sikorski (1986), who distinguishes four types of culture: Culture of domination, culture of competition, culture of cooperation and culture of adaptation. Organisational culture can be both a stimulus and a barrier to the acquisition, accumulation and use of knowledge, and consequently, to innovation. In the process of adaptation to a particular culture, members of the organisation acquire many valuable elements of knowledge that are part of this culture, however, bad habits and incompetence occur as well. An example would be frequent reluctance to share knowledge (Szczepańska-Woszczyna, 2015). Banks (1999) notes that it is possible to create such culture in the organisation that motivates to create, transfer and use knowledge by motivating and engaging people, “blending in” and consolidating the activities of knowledge management to the daily practice of business processes, internal systems and structures of the organisation. Organisational culture can effectively promote or inhibit cooperation, exchange of knowledge, experience and ideas. Open culture, promoting the participation of all team members in the creative process, is favourable to the activity and initiative of employees. Cultures aimed at developing innovative behaviours and creating suitable conditions for doing so are characterised by dynamism, flexibility, fast adaptation to changing conditions and non-stereotypical solutions (SzczepańskaWoszczyna, 2014). In a culture of domination, staff do not appreciate their own skills, they do not trust their knowledge, so that the views that they considered right are suppressed by compliance with the rules and values imposed on them by the company. Often a routine is stealing in the work killing creativity and making the employees not think about the work they do, they act “automatically.” A culture based on strong control is definitely not conducive to creativity and innovation. A culture of competition is usually found in companies whose employees have a variety of professional experiences. Often, cultural differences among employees

Shareholders in creating the value of IT  307 lead to conflicts or rivalry. A culture of cooperation consists of cooperation of employees, listening to each other, analysing ideas, readiness to absorb knowledge. In a culture of adaptation, there is an absolute adaptation to the guidelines resulting from the pursuit of company goals. The staff should have appropriate substantive knowledge and be aware of the consequences that may arise from their work. They must be responsible for their positions and be confident of their attitude. A similar approach can also be found in business practice, where organisational culture is defined as: a) A standard of work that takes into account developed and observed principles of operation or behavioural rituals; b) An invisible layer whose impact positions the environment, organisations and participants in the designed order; c) A set of unwritten and respected rules which fill the gap between what is written and what is actually done; d) A set of values, traditions, beliefs, attitudes which are at the heart of all thoughts, actions and behaviours in a company and which is fed by a system of rites and rituals. A culture based on strong foundations and clear rules helps in joint efforts to implement the company’s strategy, gives a sense of satisfaction from the work performed, and creates a cohesive community of employees who are willing to perform the tasks entrusted to them. It is, however, an element that is difficult to measure, so it is difficult to estimate its contribution to the company’s success, although it is undoubtedly important. In the opinion of the authors, organisational culture, as a tool of operational management, creates opportunities for individualisation, distinguishing companies in a competitive environment by creating an element of market play. In order to meet the direct dependence of organisational culture on the ability of an enterprise to create value, it is worth quoting the view of Mr Bourdieu, who claims that organisational culture is one of the basic forms of capital of an enterprise which brings profit both to itself and to its participants. According to Perechuda (2000), companies deliberately shape their organisational culture, treating it as one of the modifiable elements, applying the strategy of management through organisational culture. This concept is also developed by Masłyk-Musiał (1999), who claimed that there are a number of mechanisms to strengthen culture based on reward systems, attitudes of leaders, selection of new employees and their socialisation within the company. He also expresses the view that organisational culture may at the same time constitute a barrier to change strongly dependent on the life cycle of an organisation. A young organisation is only just shaping its culture, while a mature one already needs a cultural revolution. The highest susceptibility to change exists in middle-aged organisations.

308  Katarzyna Szczepańska-Woszczyna et al.

Influence of shareholders on shaping organisational culture Organisational culture and leadership are closely linked (Schein, 2010). The relation begins when the organisation is established. The founder (leader) has the main influence on shaping the culture of his organisation. He creates the first vision of the future organisation, the idea of creating a new product or service. In this context, shareholders are important: They are the first to shape (in accordance with their convictions, the business idea and the possibilities of implementation) its basic principles, which, according to their intention and purpose, will allow for the development of effective mechanisms for the creation of the company’s value during the assumed period. Market observations show that an important common feature of newly established companies focused on long-term development, is a bold mission, aversion to bureaucracy and obsession with customer service. This is confirmed by the research conducted by Zook and Allen (2017), who defined the concept of the founder’s mentality, describing those features of the shareholderfounder, which promoted and cultivated in the company have a significant impact on maintaining the dynamics and agility of the company, shaping its culture permanently and contributing to maintaining the ability to cyclical strategic renewal, which promotes long-term effectiveness of value creation. From the moment when an idea occurs to the creation of an organisation, a product or service offered by the organisation, the leader may begin a conscious process of creating certain elements of the organisational culture. It can therefore be seen that the founder’s mentality within the company is a development of the assumptions made by the founders for the organisational culture and thus constitutes an important area of influence of the shareholders, and particularly the founders, on the company in the context of its ability to maintain its effectiveness, which fosters its ability to create value. On the basis of this simplified definition review of an organisational culture, it is valuable to recognise the role that owners (founders, shareholders) can and should play in its creation, evolution and supervision. Failure in this area, regardless of the stage, can have a significant impact on the daily choices of a company. In our opinion, an equally important issue defining the organisational culture is the shareholders’ approach (in particular to managing and shaping personal values within the company), the founder’s mentality and the company’s choices concerning the combination of an opportunistic or relational approach in the managed market game and the shaped management logic. In the assessments of business practitioners, the role of values contributed by founders and shareholders, personal adherence to them in their choices and attitudes, while simultaneously promoting and influencing the immediate environment of co-workers, becomes increasingly important. Following this trend, it is the values that stand behind the power that shapes the organisational culture, which is seen and co-shaped by the company’s stakeholders, led by associates. Among many views, the one presented by Podyma-Milczarek (CEO, Pramerica) is worth mentioning, indicating that management by values is becoming an increasingly popular way of managing companies that think in the long term with a relational approach over an opportunistic one. Such a concept leads

Shareholders in creating the value of IT  309 to the thesis that values implemented in a company lead to company value. At the same time, it indicates that value management must take place simultaneously in three perspectives: Leader-manager, personal values and team (co-workers). The effectiveness of such an approach is strongly dependent both on the adherence to and identification with the agreed (developed) values (in attitudes and choices), and thus constitutes a significant power to influence the immediate environment of co-workers (indicating what the values held mean in every workplace and place in the business process), and this consequently leads to shaping the organisational culture. As a result, there is a high level of responsibility on the part of the top managers – leaders, whose way of adhering to the key values, focusing their thinking on the long term instead of the short term benefits, will significantly contribute to the long-term operation of a company more resilient to market distortion than those in which this view is less dominant. A simplified analysis of views on organisational culture and value management is likely to be a clear premise for founders and shareholders to identify those long-term roles, the key tasks which can have, in terms of long-term commitment, the strongest impact on the effectiveness of an enterprise in its long-term value creation capacity.

Manager roles as a tool for exercising shareholder influence on company decisions In the 1970s, H. Mintzberg conducted a survey among American managers who had good opinions of their superiors. He distinguished three groups of roles, which are most often performed by managers in capital companies (Snyder and Wheelen, 1981): 1) Interpersonal roles: ·· Representative – a manager, as a representative of an organisation, has to perform related symbolic and ceremonial functions; ·· Leader-manager must have an adequate influence on employees in order to achieve the organisation’s goals, this role involves proper communication, motivating, selecting, developing and evaluating employees; ·· Liaison – maintains relations between the company and the outside world. It also acts as a liaison within the organisation. 2) Information roles: ·· Monitor – the manager searches for information relevant for the company, registers, analyses and evaluates the collected data; ·· Relay – manager provides selected information to members of the organisation; ·· Spokesperson in the company – manager presents official information to people from outside the organisation. 3) Decision-making roles: ·· Entrepreneur – manifests itself in exploring new markets, launching new undertakings, initiating and introducing changes;

310  Katarzyna Szczepańska-Woszczyna et al. ·· ·· ··

Resource allocation – decides on the allocation of in-kind resources, the distribution of financial resources, the deployment of human resources; Disorder leader – improves organisational structures; Negotiator – conducts negotiations both within the organisation itself and outside it (outside: Negotiates agreements with trade unions; inside: Mediator in a dispute among employees).

The work of managers is most often considered from the perspective of the managerial functions performed, among which two groups can be distinguished: internal functions, related to the managerial activity within the team, and external functions, related to the tasks performed by the manager outside the team. Hatch, Kostera and Koźminski point to a redefinition of managerial roles and the fundamental transformation of archetypes and organisational roles played by managers of modern enterprises (Hatch et al., 2010). Currently, managerial roles are increasingly moving away from the modernist assumption in force in the 20th century about the rationality and functionality of the organisation’s world. The belief in the objectivity and absolute usefulness of quantitative measures and analyses does not work. Managerial roles require creativity, even more so than technocratic skills (Hatch et al., 2010). The management of an organisation should be perceived not from the perspective of managerial roles, but as a process carried out by all employees, not just managers. The tasks of managers are to connect people, processes and emerging opportunities (Chapman, 2001, 56–68), and modern management does not draw strength from power and position, but from knowledge and authority built on outstanding skills (Jędrych, 2007, 30–31). The literature points out that managing teams of employees requires considerable activity and entrepreneurship in action, which leads to the belief that managerial work is associated with specific personality predispositions, talent and professional qualifications. At the same time, managerial work is characterised by considerable complexity of the activities performed, variability of their course and difficulty in programming (Lachiewicz, 1994). According to Jeżak’s observation, in Western countries and the United States, the main goal of the company’s management is to create value for its owners. Increasing its size is a criterion evaluating the managed teams of the company. A drop in share prices, which means a drop in the company’s market value with increasing revenues and profits, is a signal to shareholders of the company’s unsatisfactory situation (Jeżak, 2005). The traditional norms of the vertical style of management practised in the 20th century, referred to as Management 1.0 – which is particularly characteristic of enterprises with hierarchical structures (such as uniformed services) – have become obsolete in the context of the knowledge-based economy. This paradigm of management was developed on the basis of the conviction that a manager should control the performance of the employees using quality standards (McDonald, 2011, 798). In response to the challenges of dynamically developing work virtualisation, open-source work practices, the questioning of hierarchical

Shareholders in creating the value of IT  311 management, Y-generation values, the global market, and the imperative of sustainable business, the concept of Management 2.0 was created in the 21st century, the keyword for which is innovation (McDonald, 2011, 797). It is being developed with a view to creating (rather than controlling) an environment that will support the creativity and innovation of employees. The concept of Management 3.0, however, is rather a tool, a stepping stone between theory and practice, which uses the assumptions of agile management, providing managers with great potential for effective team management, team building, taking care of the good atmosphere in an enterprise, and appreciating the employees. The key to this concept is the assumption that management excellence is associated with having leaders who can work efficiently in teams and are able to create relations. This concept promotes several key elements: ··

·· ·· ·· ·· ··

Motivating employees; increasing their activity, commitment, innovation and self-satisfaction, as well as their willingness to strive for the success of the organisation. The following aspects are essential here: A high level of knowledge and creativity, higher level of internal than external motivation, and diversification of relations between team members; Empowering, i.e. involving employees in the decision-making process and encouraging them to take responsibility; Defining boundaries, building team awareness of a clearly defined goal, as well as the manager’s awareness of the existence of overarching goals, and the awareness of the limitations of the resources available; Developing competence, knowledge, skills and responsibility; Achieving organisational flexibility and optimisation of communication; Introducing a culture of improvement in work and organisation, even if sometimes it is necessary to take one step back to go two steps forward. This, in turn, requires that the team approves of different types of changes and achieves optimal performance.

The observation of business practice in the context of managerial and ownership behaviours in IT companies indicates the importance of taking into account the new roles assumed by shareholders, in the vast majority short term, and related to the emergence of a new business scenario. The importance of such business scenarios as the financial crisis, negotiations of key (breakthrough) contracts, leading significant changes in the company or regaining reputation is particularly often emphasised. At the same time, according to Baczyńska, in difficult business scenarios, the differences between managerial and leadership attitudes are more strongly perceived. Top managers determine the attitudes and behaviours of managers at lower levels, and all managers influence the development of desirable attitudes and values of subordinates. A good leader creates a vision, communicates and cultivates it and leads to its fulfilment (Sloane, 2007). You may state that top managers, their style of management and communication, preferred incentive systems, etc. become some of the key determinants of pro-innovation organisational culture.

312  Katarzyna Szczepańska-Woszczyna et al.

Methodology and results The empirical research was embedded in a broad research problem, which was the study of the relationship between the influence of shareholders on the value formation of capital companies operating in the IT sector. The presented results of the research were limited to those issues that concern the relationship between the shareholder – organisational culture (including factors shaping it) – effectiveness of value creation (company value management). The empirical research was carried out using the Delphi method (on a sample of 30 experts performing the role of shareholders and management boards of companies meeting the selection criteria defined by the authors of the research) and eleven case studies of IT sector companies. A questionnaire was used as research tools, and the results were collected using the in-depth interview method. In identifying the strength of the impact of the surveyed factor (research variables), the approach of estimating the level of shareholders’ involvement (occurring in the company in managerial roles) on the identified catalogue of tasks and attitudes was applied, using a fivegrade Likert scale, where (1) means a very low, negligible level of involvement in the identified task, (2) means low, less important than other tasks from the catalogue of tasks, (3) means medium, equivalent with many others, (4) means high, treated as one of several and (5) means the highest, in terms of involvement in its implementation. The following results of the study presented in Table 15.1 below were obtained for the criteria of evaluation of the measures of factors adopted as described above. In addition to the key issue “building a strong organisational culture,” the results for the three tasks defined by Zook are also included as elements forming

Table 15.1 Overview of the results of empirical studies carried out using the Delphi method The strength of the significance of involvement in activities (according to the catalogue of tasks below) carried out by the shareholders for the effectiveness of long-term value creation Type of Mean value Standard company (arithmetic) deviation 4.09 0.61 Building a strong organisational SME Large 3.45 0.60 culture based on healthy companies principles allowing its continuous development Renewal of a rebellious attitude SME 4.05 0.65 3.50 0.80 (courageous mission, lack of Large companies humility) Ownership approach (focus on SME 4.14 0.56 Large 3.77 0.75 action, strong concentration, companies aversion to bureaucracy) Obsession with customer service SME 4.14 0.56 Large 3.77 0.75 (support, experimenting) companies Source: Own study (based on empirical research results).

Shareholders in creating the value of IT  313 the founder’s mentality strongly reflected in the organisational culture and company choices. As can be seen, the scores obtained for the above 4.00 (for SME companies) mean that in order to effectively create the value of the company in the long term, the involvement of shareholders in tasks related to the construction and development of the organisational culture should be high (score 4) and should aim at a unique (score 5). Such a view is confirmed by a comparative analysis of all tasks in the catalogue (a total of 18 tasks were examined), where the tasks listed in Table 15.1 received the highest scores for the strength of the impact on shaping the relation between shareholder and effectiveness of long-term value creation. At the same time, it is valuable to point out that the strength of the impact of tasks related to the development of organisational culture on the effectiveness of value creation is higher in medium-sized companies (SME sector) than in large companies. Such a conclusion is particularly valuable for the Polish IT sector, where small and medium-sized companies dominate, and the results of the research may serve as an inspiration for shareholders regarding the priorities in the implementation of tasks for their companies. The supplementary study verified, in turn, how strong the impact of shareholders’ omissions in the implementation of tasks related to building an organisational culture may be on the degradation of the company’s value. The experts indicated a level equal to 4.17 (on a scale of 1–5), which was also one of the highest results. Such a result may be interpreted as another confirmation that the tasks carried out by shareholders concerning the construction of organisational culture are of a long-term nature in terms of building the capacity of their companies to create value and are at the same time perceived as the most important on the list of their tasks. In turn, the application of the case study in empirical research was used to collect data sources for examining the relations between explained variables (effectiveness of company value creation) and explanatory variables (catalogue of tasks and attitudes – including the task related to building an organisational culture). For the data set prepared in this way, as part of the overall research, training and, consequently, prognostic models were built with the use of machine learning. In the context of this study, an attempt was made to examine the individual relationship (task: Building an organisational culture) and the effectiveness of value creation (with measures in three classes: Value degradation, value drift and value creation measured by MVA market value added measures). Such an approach is burdened with the risk of overestimating the interpretation of results (from the point of view of limiting explanatory variables to one impact factor), however, taking into account the high level of assessment of the impact of tasks related to the construction of organisational culture (obtained through the interpretation of research results using the Delphi method, included above), such an approximation may constitute a premise for shaping generalisations. The conducted statistical analysis showed that in the companies in which value creation occurred in the surveyed research periods, the involvement of shareholders in the implementation of tasks related to the construction of organisational culture was higher (score 3.89) than in the scenarios where the company experienced value drift (3.39) and value

314  Katarzyna Szczepańska-Woszczyna et al. degradation (2.55). At the same time, the proprietary forecasting model developed within the Microsoft Azure Machine Learning Studio platform, subjected to the process of evaluation, allowed for testing the effectiveness of value creation (explained variable) depending on the strength of involvement in tasks related to the construction of organisational culture. The flow of tasks in the forecast model is shown in Figure 15.1. The confusion matrix, as a result of model quality testing (real class relation versus class forecast), indicates that for the “value creation” class, the forecast

Figure 15.1  The flow of tasks in the training (prognostic) model for the research variables of shareholder relations (tasks) and the effectiveness of value creation. Source: Own study (based on Microsoft Azure Machine Learning Studio).

Shareholders in creating the value of IT  315 compliance (compared to the real value of the variable) is over 88%, while for “degradation value” it is 75%. The accuracy of the model (parameter accuracy overall) is 0.64, a moderate value, which in the opinion of the authors results from the use of a limited set of source data (training and testing the model). Increasing the amount of data may significantly increase the quality of forecasts, which is a strong inspiration for further research.

Summary Based on the results of the conducted research, it can be pointed out that there is a potentially strong influence of shareholders of capital companies on shaping key company choices reflected in the organisational culture. Potential cause-andeffect relations leading to shaping the long-term ability to create the company’s value through shaping the organisational culture as a possible source of building competitive advantage, the significance of shareholders in this process and the tools of influence used by them were identified. One of the tools of shareholders’ influence on the company’s key decisions are managerial roles, which, when properly implemented and at the same time transformed with the company’s development, can contribute both to the companies’ ability to create its own value and at the same time maintain the key values shaping the organisational culture. The presented results of empirical research, which in the authors’ opinion reinforce the premise that high involvement of shareholders in the development of an organisational culture, adequate for the purpose of the long-term ability of companies to shape their value, significantly brings companies closer to the creation of that value.

References Aniszewska G., Gielnicka I. (1999). Firma to ja, firma to my. Poradnik kultury organizacyjnej firmy [The company is me, the company is us. A guide to the company’s organizational culture], Gdańsk: Ośrodek Doradztwa i Doskonalenia Kadr. Bańka, W. (2011). Człowiek w organizacji [Human in an organization], Toruń: Wydawnictwo Adam Marszałek, pp. 119–120. Banks, E. (1999). Creating a knowledge culture, Work Study, 48(1), pp. 18–20. Chapman, J.A. (2001). The work of managers in new organizational context, Journal of Management Development, 20(1), 56–68. Hatalska, N. (2019). Przyszłość w erze cyfrowej zmiany. Transformacja cyfrowa w Polsce, Gdańsk: infuture.institute, http:​//inf​uture​.inst​itute​/rapo​rty/t​ransf​ormac​ja-cy​ frowa​/ Hatch, M.J., Kostera, M., Koźmiński, A.K. (2010). Trzy oblicza przywództwa. Menedżer - Artysta – Kapłan [Three faces of leadership. Manager – Artist – Priest]. Warszawa: Wydawnictwa Akademickie i Profesjonalne. Jabłonowska, L., Myśliwiec, G. (2006). Współczesna etykieta pracy [Contemporary work etiquette], Warsaw: Warsaw School of Economics. Jędrych, E. (ed.) (2007). Zarządzanie zasobami ludzkimi dla menedżerów średniego szczebla [Human resource management for middle level managers]. Kraków: Oficyna Wolters Kluwer Business.

316  Katarzyna Szczepańska-Woszczyna et al. Jeżak, J. (2005). Struktura i formy sprawowania władzy w spółkach kapitałowych [Structure and forms of power in capital companies]. Łódź, Poland: University of Lodz Publishing House. Kilmann R.H., Saxton M.J., Serpa R. (1985). Gaining Control of the Corporate Culture, San Francisco: Jossey-Bass. Koźmiński, A.K., Obłój, K. (1989). Zarys teorii równowagi organizacyjnej [Outline of the Theory of Organizational Equilibrium], Warsaw: PWE. Lachiewicz S. (ed.) (1994). Organizacja pracy kierowniczej [Organization of Managerial Work], Łódź, Poland: Absolwent Publishing House. Masłyk-Musiał E. (1999). Społeczeństwo i organizacje. Socjologia organizacji i zarządzania [Society and Organizations. The Sociology of Organization and Management], Lublin: Maria Curie-Skłodowska University in Lublin Publishing House. McDonald, P. (2011). It’s time for management version 2.0: Six forces redefining the future of modern management, Futures, 43, pp. 797–808. Perechuda K. (ed.) (2000). Zarządzanie przedsiębiorstwem w przyszłości. Koncepcje, modele, metody [Company Management in the Future. Concepts, Models, Methods], Warsaw: PLACET Publishing House. Schein, E.H. (2010). Organizational Culture and Leadership. San Francisco: Jossey-Bass A Wiley Imprint, 4th Edition. Sikorski, C. (1986). Sztuka kierowania [The Art of Managing], Warszawa: Instytut Związków Zawodowych. Sloane P. (2007). The Innovative Leader. How to Inspire Your Team and Drive Creativity, London: Kogan Paged Limited. Snyder, N.H., Wheelen, Th.L. (1981). Managerial roles: Mintzberg and the Management Process Theorists, Academy of management Proceedings, 41, pp. 249–253. Straub, D., Loch, K., Evaristo, R., Karahanna, E., Srite, M. (2002). Toward a TheoryBased Measurement of Culture, Journal of Global Information Management (JGIM), 10(1): 13–23. Szczepańska-Woszczyna, K. (2015). Leadership and organizational culture as the normative influence of top management on employee’s behaviour in the innovation process, Procedia Economics and Finance, 34, pp. 396–402. Szczepańska-Woszczyna, K. (2014). The importance of organizational culture for innovation in the company, Forum Scientiae Oeconomia, 2(3), pp. 27–39. Szmurło, A. (2013). Kultura organizacyjna jako czynnik wpływający na funkcjonowanie przedsiębiorstwa [Organizational culture as a factor infuencing the functioning of the enterprise], Zeszyty Naukowe Uniwersytetu Przyrodniczo-Humanistycznego in Siedlce, Series: Administracja i Zarządzanie, 99, pp. 367–372. Wilkins, A.L., Ouchi, W.G. (1983). Efficient cultures: Exploring the relationship between culture and organizational performance, Administrative Science Quarterly, 28(3), pp. 468–481. Zook, C., Allen, J. (2017). Mentalność założyciela jako podstawa sukcesu firmy [The mentality of the founder as the basis for the company’s success], Warszawa: MT Biznes.

16 Evolution of management towards Innovation 4.0 during the COVID-19 pandemic Zbigniew Olesiński and Agnieszka Rzepka

Introduction The term Industry 4.0 (Roblek et al., 2016, pp. 1–11) which first appeared at the 2011 trade fair Hannover Messe in Germany, is an approach that is changing the way companies work. The main objective of Industry 4.0 is to achieve accuracy and precision and a higher degree of automation (Thames and Schaefer, 2016, pp. 12–17). Another related term, the Fourth Industrial Revolution, stands for the simultaneous combination of three disparate elements: Real production lines, virtual world and information technology. It is represented by the rapid development of hyperautomation and artificial intelligence. The change can be clearly observed in modern times and follows the First Industrial Revolution of coal and steel at the beginning of the 11th century, the Second Industrial Revolution at the turn of the 20th century (a revolution in chemistry, the automotive industry and electricity) and the Third Industrial Revolution of the 1960s – the automation revolution. Rapid technical and technological changes such as hyperautomation and, above all, the development of information technology, leading to new solutions such as 5G or the development of the Internet of Things (Moeuf et al., 2017), offer convenient ways to improve the way companies operate. In contrast to previous industrial revolutions, the fourth is progressing much faster. This is due to the fact that new technologies tend to trigger the emergence of new and more efficient technologies. The concept of the Fourth Industrial Revolution is closely linked to the development of the Internet of Things, digitisation, increasing robotisation and automation of production processes (Rodak and Gracel, 2020). The changes that are taking place are clearly visible to all types of companies (Smit et al., 2016), which recognise innovation as the most important key to success in the age of Industry 4.0. The Fourth Industrial Revolution, which is merging the physical world with the digital world, offers great opportunities for companies (King, 2020). The introduction of new products and new manufacturing methods must now be much faster. This is made possible by the introduction of innovations that are considered the driving force behind this revolution.

DOI: 10.4324/9781003184065-16

318  Zbigniew Olesiński and Agnieszka Rzepka

An attempt to conceptualise Innovation 4.0 The science of management and quality reveals the possibilities of management behaviour in today’s rapidly changing, turbulent world. This science relates primarily to economic processes, and these are influenced by global processes. Almost every company and every economic region is dependent on global processes. To survive in today’s turbulent market for goods and services, a company must therefore be competitive. From an economic perspective, competitiveness is the ability to offer a product or service more attractive than the one offered by other manufacturers on the market. The basic factors of competitiveness are the price and quality of goods and services, and innovation which is understood as a novelty that draws the attention of buyers to a particular innovative good or service. In order to maintain economic growth in the foreseeable future, innovation processes are of crucial importance. Historically, innovation has been associated with the activities of lone geniuses (Kim and Mauborgne, 2006). In the industrial age, however, innovation increasingly depended on the work of research teams. In recent years, the importance of a properly designed entrepreneurial environment has increased (see Figure 16.1). Attention has been paid to the role of universities and research institutes in this process, and incubators have been created through the support of private subcontractors by public institutions (organisations offering the opportunity to start new businesses, start-ups, technology parks, consulting firms). In this context, the question of further possibilities for innovation development arises. With some exaggeration and with some emphasis on PR, one can predict the emergence of Innovation 4.0, analogous to Economy 4.0 or Industry 4.0.

Venture capital

Business angels

Company Technology parks

University Incubator

Spin out

Company

Consultancies

Figure 16.1  Model of creating an innovative environment. Source: Z. Olesiński, A. Rzepka, and A. Sabat, 2016, p. 33.

Evolution of management towards Innovation 4.0  319 To speculate about the emergence of Innovation 4.0, we should look at the innovation environment and the conceptualisation of its structures, and then try to identify the existing trends and to forecast the further development of both interorganisational structures and organisations that strive for innovative solutions and Innovation 4.0. In Figure 16.1, we can see, with some approximation, that we are dealing with a group of organisations such as universities, incubators, technology parks or companies that are linked by specific relationships. A university could set up a spin-off organisation which, after a period of development within university structures, could be transferred as a spin-out to an incubator to continue its development. In order for a spin-off to develop into a spin-out, it can receive financial support from specialised institutions whose task is to support start-ups, e.g. venture capital or business angels. Such support consists of offering specific financing mechanisms, such as the purchase of part of the start-up’s shares. In this way, specific relationships between these organisations are created and a network of inter-organisational relations is created. This is a very dynamic phenomenon in the modern world. In his book, The Square and the Tower: Networks and Power, from the Freemasons to Facebook, Niall Ferguson offers a meticulous study (divided into different historical phases) of the relationship between a familiar, carefully analysed hierarchical structure and a rapidly developing horizontal (network-based) structure that has recently gained in importance. He notes, We live in a networked world, or so we are constantly told (…) when hierarchy is the order of the day, you are only as powerful as your rung on the organizational ladder of a state, corporation, or similar vertically organized institution. When networks gain an advantage, you can be as powerful as your position in one or more horizontally structured social groups. (Ferguson, 2018, pp. 7–8) What is the relationship between hierarchical structures? It began to take shape in the distant past between the emerging countries. This gave rise to (1) diplomacy as opposed to mutual aggression and war and (2) international relations as opposed to isolation and isolationism. Over time, these relations began to manifest themselves in economic processes such as the institutionalisation of trade routes, which resulted in the creation of the Eastern Indian Campaign, or the Hansa. In some cases, hierarchical structures have proved to be too inflexible with regard to new challenges, leading to the practice of networking between smaller units.

Network structures and organisations In addition to inter-organisational relationships that are institutionalising on the web, organisation as such in network structures is one of the elements of interest in the management and quality sciences. In a network, the decision-making centre generally remains within the organisation, but in addition to the problems of managing the organisation

320  Zbigniew Olesiński and Agnieszka Rzepka itself, this centre attempts to manage the environment of the organisation composed of other identified organisations with which it selectively tries to establish relationships. These relationships become a kind of channel through which you can send certain goods, services, finances, people. Under these conditions, we observe the growing role of soft factors such as information, knowledge, intellectual capital (interpreted as organisational, social, human, relational and intra-organisational capital), mutual trust, culture and other conditions. Inter-organisational relationships, as a communication channel, offer an opportunity for communication. Such a relationship can suggest certain behaviour to a partner, then implement it and expect a reaction. The response may or may not be sent. It may or may not meet expectations, but it is proof that the message was received and caused the recipient to respond. Consideration of inter-organisational relationships becomes especially important in the Internet age when we are potentially able to establish relationships with an unlimited number of correspondents, but for some reason, intentionally or unintentionally, we select a particular person or a certain number of persons, which excludes relationships with other persons at the same time. The manifestations of inter-organisational management are similar to those of process management or self-management (Holocracy) and result from the agreements and negotiations. They manifest themselves initially in the decentralisation of vertical hierarchical structures, but in their further evolution lead to the development of an organisational game, a tender or a bidding process. In this way, new management tools will spontaneously emerge. In the context of economic development influenced by innovative processes, networking has its specific dimension and reference in the functioning of small and medium-sized enterprises (Borowiecki et al., 2018). At present, the functioning of a network organisation requires a well-developed IT management infrastructure, i.e. ICT. Therefore, the strategy of the organisation is developing to operate in many sectors and branches and to offer a wide range of products and services adapted to new markets. Such a strategy cannot be implemented in the current model of traditional hierarchical linear structures. The result is the transformation of this model of organisational management structures towards networking. In the resulting network organisation, isolated business units are created that bond the network organisation. These units typically have a high degree of autonomy and are responsible for the results. In particular, the development of global IT networks such as the Internet and advances in information processing technologies (cloud computing, big data) make it possible to remove global communication barriers related to long-distance data transmission in systems composed of many elements and to work with large amounts of information necessary for decision-making in complex and multilayered systems of the 4.0 era. Contemporary organisations lack instruments that link strategies to the development of organisational structures that enable organisations to achieve and maintain continuous innovation changes (Prahalad and Krishnan, 2008).

Evolution of management towards Innovation 4.0  321 Network organisations need access to a global network of resources to create unique experiences with customers. To achieve this, management should keep business processes, technical systems and supply chain management up to date by implementing an appropriate social and technological infrastructure to create a permanent innovation advantage in Economy 4.0.

Self-management Self-management takes place mainly in creative organisations such as scientific teams, artistic teams, design offices, editorial offices, advertising agencies, etc. Such organisations facilitate the development of a creative environment conducive to the development of inter-organisational cooperation, networking and clustering. Self-management includes forming employee teams, in which each employee (team member) usually makes his/her own decisions. In practice, such a person has the authority to make decisions to a certain extent, e.g. to make purchases up to a certain amount. He informs other team members of his intentions at meetings organised as required. The members of the team defend jointly and individually the procedures decided in this way, share responsibility for the consequences of possible mistakes and share the benefits of success. Recruitment into the team follows an interview with colleagues. There are no titles or job titles, but adaptable and partial roles that replace permanent job descriptions. The work takes place in rooms that are adapted for this purpose by the employees themselves – these places are usually plant-friendly and even open to the presence of children and animals (with the consent of all employees and under certain restrictions). Holocratic decision-making mechanisms (exchange of information, negotiation, consensus-building) predominate. In holocratic teams the multi-stage process of conflict resolution dominates. Negotiations are first conducted between the parties involved and then, in the event of disagreement, between all employees until a consensus is reached. All team members have access to all information. Planning, budgeting and control are based on the “sense and react” principle. The organisation is constantly adapting to the current situation. In every self-governing team, there are, to a certain extent, elements of a hierarchy that updates and orders the course of events but is not dominant and prescriptive as in the case of hierarchical structures. The self-management structure is the main element that distinguishes Teal organisations from the former types of organisations: Orange (typical of the postindustrial era) and green (typical of the era of services) (Laloux, 2014). Traditionally organised companies, typical of the industrial age, are generally inflexible, making it difficult to introduce modern, dynamic management concepts. The company looks for sources of competitive advantage through the flexible implementation of individual processes. This is done on the basis of knowledge and experience, the aim being to meet the expectations of the customers. Self-managed teams can be set up when a new type of organisation is created, e.g. companies that develop software or computer games. Empirical research

322  Zbigniew Olesiński and Agnieszka Rzepka indicates that the fact that the principles governing the functioning of employee teams evolve as companies modernise their services or the products they produce, but also as they improve the qualifications of their employees, including the employment of young, well-trained staff. In such circumstances, the need to liberalise the rules of management and control of employee teams in the direction of decentralisation of organisational structures often arises spontaneously. The direction of these changes leads to the restriction of the dominant hierarchy and thus to the introduction of elements of the updating hierarchy, i.e. a hierarchy in which advice is preferred to instruction (coaching) and in which advisors (mentors) are needed to serve the needs of both individual employees and entire teams of employees so that interested parties can call on the support of people from outside the organisation. Relationships between employees in self-managing teams are only just beginning to emerge, and it is now an interesting and young field of research for management specialists, both scientists and experts.

Agility Working effectively in Economy 4.0 and reaching the status of a developing business requires a change in mindset and a change in approach to identifying and using resources with a special focus on knowledge. To effectively compete in an unpredictable market, Companies need to adapt their structure and operating rules to uncertainty, short-term opportunities and non-standard behaviour of competitors. The concept of agile enterprise gives such an opportunity (Olesiński et al., 2017). Kidd (1995) defines agility primarily as the ability to react quickly and adapt to new conditions in order to respond to continuous, surprising and unpredictable changes in the competitive market environment. Immediate reaction means flexible adaptation through the agile organisation of each of its components, such as people, business goals, technology and organisation to unexpected changes. The concept of agility evolved in the field of production, but its assumptions were quickly extended to other functions of the company, which resulted in the popularisation of the term “agile.” Agile production stands for the integration of all flexible production technologies with the experience of comprehensive quality management (TQM), just-in-time production (JIT) or lean production methods. Kidd introduces four agility measures: the cost of change, the time required to make the change, the scope and frequency of the change. Nowadays it seems justified to extend the concept of agility to the specific environment of an organisation. An agile company is able to react quickly and skilfully to market changes and to exploit changes in the business environment that are seen as an opportunity to create a competitive advantage (Kidd, 1995). An agile company is able to identify market needs immediately. It is also able to react appropriately to crises (Kumar and Motowani, 1995). Today, in a competitive environment of the 4.0 era, growth is achieved by those organisations that are agile and, above all, able to react quickly. The adaptability

Evolution of management towards Innovation 4.0  323 of an organisation becomes a strategic determinant of survival and a measure of the talent of its employees. Agile organisations are designed to enable employees to adapt quickly to market changes (Rzepka, 2019a). Therefore, agile organisations should have certain characteristics. The most important of these are speed and flexibility (Yamin and Gunasekaran, 1999). As Sharifi and Zhang (1999) show, it is equally important to respond effectively to changes and uncertain conditions in the business environment. It should be noted that companies, especially in a modern, rapidly changing business environment, will and should differ in the potential that can be used to achieve and maintain agility (Rzepka, 2019b). In the course of the above-mentioned inter-organisational cooperation, isolated, permanent or ad hoc environmental groups are formed. The environment of agile organisations is of particular importance in the case of innovative activities (see Figure 16.1), as it creates favourable conditions for generating innovation through inter-organisational cooperation and the generation of soft management factors. Examples include the spontaneous emergence of groups of cooperating organisations to invent drugs and vaccines for COVID-19 or to reduce the impact of the pandemic (e.g. through humanitarian aid). There are other examples of such initiatives.

Isolated environment of a network of innovative organisations The isolated network environment of innovative organisations consists of groups of different types of organisations, such as universities, research institutes, enterprises, incubators, technology parks, financial institutions (e.g. banks, support funds, venture capital, business angels), consultancies and other institutions (see Figure 16.1). They work together relatively constantly and create their own value systems, customs, habits, specific professional and life attitudes. The identity of such an environment (consisting of economists, engineers, etc.) is then created under certain conditions. The prime example of such an environment is the organisations that are composed Silicon Valley in the United States. The identification of this type of isolated environment requires surveys and appropriate interviews. Based on other types of research, it seems intuitively possible to identify such environments (such as the scientific community in Warsaw, Silesia or Krakow, consisting of universities, research institutes, companies, financial institutions, etc.). Organisations creating such an isolated environment cooperate in different ways, but also maintain parallel cooperation with other organisations belonging to other environments. An example of this type of cooperation is the long-standing collaboration of the University of Economics in Krakow with the University of Messina in Sicily or the University of IvanoFrankivsk in Ukraine. So, on the one hand, we are dealing with a relatively isolated Krakow scientific community, and, on the other hand, with networks of cooperation of individual organisations of this community with external organisations (in the case mentioned above, these are the Universities of Messina and Ivano-Frankivsk).

324  Zbigniew Olesiński and Agnieszka Rzepka To a certain extent we can talk about the subjectivity of the cooperation network of universities and other organisations in a certain region in relation to the cooperation network of innovative organisations in another region, for example, cooperation between the scientific communities of Warsaw and Krakow or between Polish and American universities. Empirical research carried out over many years indicates a dynamic expansion of cooperation networks of innovative organisations, which is why it is necessary to structure cooperation networks of non-isolated environments of innovative organisations (see Figure 16.2). The above considerations convincingly demonstrate that innovation in today’s world depends on the interaction of companies that are able to create soft management factors such as knowledge, intellectual capital or trust. This is favoured by the expansion and institutionalisation of inter-organisational networks built from specific, isolated environments characterised by agility. This dependence is illustrated in Figure 16.3. The process of designing organisational structures for innovative processes presented in this chapter requires a dynamic shaping of separate environments of innovative organisations, characterised by institutionalised inter-organisational

Isolated environment of a network of innovative organizations

B

Isolated environment of a network of innovative organizations

Isolated environment of a network of innovative organizations

A

C

Isolated environment of a network of innovative organizations

D

Figure 16.2  Networks of innovative organisations. Source: Own research.

Evolution of management towards Innovation 4.0  325

Agility

Inter-organizational cooperation

Soft management factors

Teal organisation

Innovation

Computerization

Figure 16.3  A model of factors accelerating the formation of teal organisations. Source: Rzepka, Borowiecki and Olesiński (2020).

networks and the creation of soft management factors. An exemplary type of organisation in the age of Innovation 4.0 may be the Teal organisation.

Innovation in the light of research In recent years, technological changes have forced a paradigm shift in business and operating models towards innovation. Yet despite well-described case studies, effective methodologies and framework programs, many companies and their technology leaders have still not developed effective innovation capabilities. In view of the increasing changes in the environment, the organisation must respond to these and develop the above-mentioned characteristics (agility, selfmanagement) that enable it to survive in this environment. Organisations must develop the ability to quickly identify market opportunities and threats from the environment and to categorise situations as favourable or unfavourable (Sambamurthy et al., 2003). They should also acquire the ability to acquire resources from their environment, the ability to assess their adequacy (Kisielnicki and Misiak, 2016), and the ability to combine vision and operational management to function in a changing environment. In order to implement innovation,

326  Zbigniew Olesiński and Agnieszka Rzepka organisations must be part of the innovation ecosystem chain (Laamanen et al., 2018), in which there is a whole series of interconnected cells. In the Age of the Economy 4.0., the amount of technology and talented people is so large and the potential so great that the creation of innovation rarely occurs in the vacuum of a single organisation (Bouncken and Fredrich, 2016). If we take a strategic approach, ecosystems that include internal and external business partners can help reduce risk and increase the pace of innovation. Managers today have a wide range of partners within the ecosystem and countless forms and opportunities for collaboration (Figure 16.4). When comparing different cooperation options, it is good to analyse partners by type of innovation. To maximise ecosystem benefits, companies should actively engage with the ecosystem by constantly searching and identifying the market, nurturing relationships, and finding exactly the specific solutions that are needed at any given time (Kohli and Melville, 2018). Today, a company cannot limit itself to expressing its interest in working with the ecosystem (Roy and Sarkar, 2015), but must take on the role of a partner with whom other members want to work together. The following research shows the important role of innovation in companies today. Innovation and modern technological solutions for the industry were the subjects of the Autodesk conference “Innowacje 4.0 – Przyszłość Tworzenia,” which took place on 4 June 2019 in Warsaw, Poland. It was attended by 200 managers Influencers

Host

Programs Experts

Sponsor Speak

Thought leaders

Attend

Education institutions Media

Conferences

Competitors

INNOVATION ECOSYSTEM Federal

Government

Municipal

Innovative companies

Customers

Community

Vendors/suppliers Partners Startups

Investment community Consultancies Incubators/accelerators

Figure 16.4  Innovation ecosystem. Source: Own research on the basis of a 2018 global CIO survey (Briggs, Kark, Shaikh and Lamar, 2020).

Evolution of management towards Innovation 4.0  327 of all levels from the industrial sector. The participants were asked about the opportunities that Industry 4.0 could offer their companies. Almost two-thirds of the respondents expected “rapid changes” and more than half expected “flexibility in production.” The introduction of solutions that were in line with the Fourth Industrial Revolution could also result in the possibility of sales growth (36.6%). Almost one in three respondents expected greater customer satisfaction and an increase in the profitability of their company. The most important factors determining competitive advantage were innovation (69.3%), customer satisfaction (63.4%), product development (45.5%) and production flexibility (42.6%) (Innowacje 4.0 – Przyszłość Tworzenia/Autodesk, 2020). As the above study shows, the digitisation of industrial and business processes is inevitable. Polish industrial companies are facing the opportunity to make their business more dynamic. It seems that managers are aware of the importance of speed and flexibility for Polish industrial companies. Quite significant results for the shaping of innovation and relationships between organisations are presented in the research of Rzepka (2018). The research was carried out in 2016–2018 and aimed to determine the willingness of Polish companies from the region of Podkarpackie to establish inter-organisational relations. More than 200 respondents from different levels employed in Polish companies took part in the survey, which showed that the establishment of inter-organisational relations is widely practised by companies based in the Podkarpackie Region. This was confirmed by 80% of the respondents. Cooperation with other companies is most often in the form of outsourcing contracts – 45%, virtual organisations – 24%, strategic alliances – 16% and business clusters – 15%. This is confirmed by the analysis presented above. The survey specified the type of cooperation that the companies have entered into with other entities on the market. A visualisation of the respondents’ answers is shown in Figure 16.5. It is interesting to note that cooperation with other institutions on the market is usually short-term (less than a year), less often medium and long-term. In addition, the respondents acknowledged that building relationships between organisations has many advantages: Access to expertise and specialist knowledge (25% indications), improvement of competitive position (25%), increased turnover (25%), acquisition of new skills (15%) and risk sharing (5%). The most important thing is that the surveyed companies try to increase their own innovative power by building relationships between the organisations. The use of assistance

Figure 16.5  Type of cooperation undertaken with external entities. Source: Own research on the basis of A. Rzepka’s research (2018).

328  Zbigniew Olesiński and Agnieszka Rzepka from institutions that support the development of innovation was confirmed by 75% of the respondents. The types of these institutions are: Entrepreneurship Incubator (25% of indications), Technology Park (15% of indications), Advisory Centre (30% of indications) and Public Administration (30% of indications). The respondents then named the types of institutions that support innovation and with which their company cooperates. The survey on attitudes of Polish enterprises towards innovative measures shows that the respondents are increasingly aware of the need to implement such measures. This can be seen as a positive effect that will contribute to the economic development of the Podkarpackie region over the next ten years. In summary, success in innovation increasingly requires the continuous development of new innovative opportunities or the introduction of skills and opportunities from the environment. The strategy in an innovative system offers an advantage by identifying the most important areas for investment. An innovation strategy is necessary but not sufficient (Bouncken et al., 2019). Creating value in a world of shortening product and business model life cycles (Kraus et al., 2018) requires speed and decisive action.

Impact of the pandemic on the perception of Innovation 4.0 In terms of the number of people affected, its geographical extent and duration, the COVID-19 epidemic is much more widespread than the epidemics that affected mankind after World War II. The economic impact of the current pandemic will also be greater due to the increasing number and intensity of international links in the Economy 4.0. The COVID-19 pandemic took entrepreneurs by surprise and forced them to adapt quickly to changing conditions. Many companies in almost all sectors had to find themselves, whether they wanted to or not, in a new reality. In April 2020, Livespace conducted a survey using an online questionnaire. Eighty respondents took part in the survey – mainly people working in companies selling in a business-to-business relationship (82.5%) and with the Polish majority capital (91.25%). A total of 50% of the respondents were company owners or managers and another 50% were heads of sales departments, while 31.25% of respondents worked in companies with less than ten employees and 48.75% worked in organisations with 11–50 employees. People from companies with more than 51 employees made up 20% of the respondents. The survey found that 65% of respondents reported a decline in sales caused by pandemic COVID-19. Only 7.5% of the respondents indicated that the pandemic had a positive impact on their business. For 50% of the respondents, the biggest challenge was the need to change their plans and strategies. According to the report, 65% of the companies surveyed were negatively affected by the coronavirus pandemic, which led to a drop in sales. Only 7.5% of respondents said that the pandemic had a positive impact on their business and contributed to increased sales. And 16.25% of the respondents are not able to clearly state how the pandemic has affected their business. In contrast, 11.25%

Evolution of management towards Innovation 4.0  329 50 % changing the company’s plans and strategies 1.2 1 0.8

7.50 % other challenges

0.6

7.50 % employee management

0.4 0.2 0 2.50 % no challenges

10 % seeking counselling

3.75 % managing stress

17.50 % seeking financial support

Figure 16.6  The biggest challenges in connection with the COVID-19 pandemic. Source: Own research on the basis of the Livespace Report (Zawadka, 2020).

of the respondents stated that the pandemic did not affect their business. Half of the respondents clearly stated that the biggest challenge is to change their plans and strategies (see Figure 16.5). The respondents unanimously point to three main challenges: Changing the company’s plans and strategies (50%), seeking financial support (17.5%) and others (10%), including panic among managers and a decline in the number of purchase decisions on the part of customers (see Figure 16.6). The COVID-19 pandemic affects 65% of respondents and causes a drop in sales, while 7.5% of the respondents say that the pandemic is having a positive impact on their business and contributing to sales growth. In April and May 2020, Polish Economic Institute and Polish Development Fund conducted a survey among entrepreneurs or managers about their situation and plans after the outbreak of coronavirus in Poland. The survey report Sytuacja polskich przedsiębiorstw i rynku pracy po lockdownie (2020) reflects the above data. The study was conducted by means of computer-assisted telephone interviews (CATI) on a random quota sample of 400 companies in four size categories and three industry sectors. The survey shows that 60% of the companies show a decrease in turnover. Demand is also declining – almost half of the respondents noted a 25% decline. One in four companies has problems with the payment of its liabilities and 30% with debt collection. In addition, 67% of companies in April/May 2020 report a drop in sales compared to March results – an increase of ten percentage points compared to the situation one month prior. In contrast, one in ten companies admits that they do not have the

330  Zbigniew Olesiński and Agnieszka Rzepka means to survive – compared to 18% one month prior. 12% of companies have cut jobs so far, and another 12% of companies declare further redundancies. Trading companies and large and medium-sized enterprises have laid off most workers – with 60% job losses in between 1% and 25% of the workforce. In the service sector and in micro-enterprises, the strategy of reducing workers’ salaries is gaining ground. The study shows that the situation of Polish companies remains uncertain, but fewer and fewer of them intend to use “radical survival strategies.” Managers are looking for solutions for survival and further development. This study shows that companies are not fully adapting to changing conditions. Today, every manager should look ahead to the development of his company and adapt its products and services to changing conditions and try to implement innovations. Innovation is essential and necessary (Turulja and Bajgoric, 2019). Almost 75% of companies say that innovation is one of the three most important management priorities and 35% put it first (Hughes et al., 2018). This is not surprising. A successful innovation strategy combined with the right innovation system can make a big difference. However, it must be said that innovation tends to be difficult. Only about 30% of companies believe that they can implement innovations well, so this is a growing challenge (Long et al., 2020). Digital technologies and data require even the strongest innovators to constantly master new possibilities and develop faster and more efficient research and development processes. Today, in the face of the pandemic, high flexibility, market expansion, efficient exchange of resources, quick response to external opportunities and partnership support in difficult situations are the main advantages of an innovative organisation. These characteristics not only enable companies to survive a crisis or critical situations and grow by achieving even more ambitious goals, but also to overcome autonomous thinking, fear of cooperation due to lack of trust or coordination difficulties between partner units and the central office of the network structure. The current situation can be very difficult for entrepreneurs who are currently experiencing change. It is therefore worth looking for other solutions and reviewing the current business model. It is advisable to change the working style, look for new markets and distribution channels, make organisational changes in the company or simply implement innovative solutions. A change in business model or expansion abroad can be a perfect opportunity for companies affected by the pandemic.

Conclusions Innovation 4.0 is understood as a parallel process to Economy 4.0 or Industry 4.0. The process addresses the challenges of the emerging economy with hyperautomation, artificial intelligence and new information systems like 5G. Innovation 4.0 applies to behaviour patterns that relate to all areas of the economy and society in which answers to emerging challenges are sought.

Evolution of management towards Innovation 4.0  331 The attempt to design tools and methods for Innovation 4.0 consists of the analysis of current management processes and the attempt to extrapolate, in particular, to identify them. It seems that such opportunities are created by the development of inter-organisational cooperation and the creation of separate organisation environments. This can be further illustrated by adding that the current situation is not so much about cooperation networks, but rather attempts to structure and institutionalise these networks by distinguishing individual components of these networks. An example of this is the environments of cooperating organisations, which were formed on an ad hoc basis and which aim to limit the effects of the COVID-19 coronavirus pandemic. It can be expected that similar environments of innovative organisations will be created in the future to solve emerging problems related to environmental protection, including rational concern for water resources or space flights. The potential environment for organisations seeking to solve problems arising from the evolution of society and the economy towards Economy 4.0 will be characterised by the functioning of rather small, agile organisations that react quickly and flexibly to the changes taking place. The analysis of political behaviour in contemporary societies indicates a spontaneous self-organisation of communities with several members, aiming to solve a specific problem. Examples of this are the ACTA’s movement against the filing of charges on the Internet or the global movement that emerged in connection with the need to combat the financial crisis of 2008/2009, which included Occupy Wall Street traffic in the United States or Podemos in Spain. After the participants in these movements had achieved some results of their actions, which were either considered sufficient or not considered capable of achieving greater results at their current stage, they stopped their activities in this group, which does not prevent them from organising themselves at the first opportunity and seizing a promising opportunity in the future. The analysis of social processes during the coronavirus pandemic suggests that there is a growing recognition that individuals are spontaneously participating in solving new challenges. It is expected that if the current economic growth trend of 2–3% of GDP continues, we are likely to observe the formation of task-oriented teams, the creation of cooperation networks, the creation of soft management factors and the further development of their agility will be observed, which will lead to an intensification of innovative solutions.

Recommendations for practical application by entrepreneurs and scientists In the emerging era of Innovation 4.0, it seems particularly important to maintain larger rather larger than smaller inter-organisational cooperation networks tailored to the needs of a particular organisation. Where necessary and possible, conditions for action should be created for selfmanaging employee teams working in decentralised, horizontal organisational structures with an updated hierarchy.

332  Zbigniew Olesiński and Agnieszka Rzepka For an organisation to be competitive, it must constantly implement innovative solutions and transformation processes. The aim of the company is to meet the needs of shareholders, employees and customers. The current direction of the management system transformation, such as the development of global organisations, requires the use of network structures. Such organisational structures require the use of high-quality communication systems and adaptation to the conditions of the 4.0 era. In the 4.0 economy, it is important that teams of employees, organisations, but also separate networks of innovative organisations are ready to meet the requirements of a rapidly changing environment, as dictated by their agility. The research conducted by Livespace shows the need to shape the ability to change behaviour quickly in the face of rapid change. It seems advisable to use guidance, training and behavioural training under the pressure of circumstances and under stress. It is also advisable to establish rules for the functioning of the organisation’s employee teams and isolated networks of innovative organisations, in order to limit the influence and impact of pressure factors such as support from coaches or consultants, consultation with specialists and other such activities. The constant implementation of the characteristics of a teal organisation and the constant monitoring of its manifestations by the management plays an important role in the functioning of modern companies and organisations. Empirical research in Poland shows that such manifestations occur in many companies and organisations. This is reflected in the desire of some employees to increase their autonomy to cooperate with other organisations in the environment, which promotes the creation of soft management factors (knowledge, trust, intellectual capital), and this contributes to the growth of innovation and to improving the competitiveness of the organisation. It is therefore advisable to establish relationships between employees and management to build trust and mutual respect. The role of innovation in industry is absolutely crucial. Without it, businesses cannot thrive and will grind to a halt. We are now under great pressure from global competition and the increasing complexity of business. Innovation is a way to create better products, make more profits and thus secure the future. This is the goal that entrepreneurs and managers should strive for. Therefore, cooperation and networking instead of isolation are an important recommendation for the many young and small and medium-sized enterprises that are active and growing in this difficult time for the economy 4.0.

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Index

Page numbers in bold denote tables, in italic denote figures academic business incubators (AIP) 15, 18 Agrawal, A. 12 Aguinis, H. 204 Alhaderi, S.M. 206 Allen, J. 308 Amabile, T.M. 213, 221 Amit. R. 259 Anderl, R. 256 Andrzejczyk, A. 50 Aniszewska. G. 305 artificial intelligence (AI) 24, 65, 79, 93–95, 97, 130, 203, 205, 207, 219, 259, 285, 305, 317, 330 augmented reality 97, 205, 285, 290 automation 24, 52, 65–66, 71–72, 74–75, 78–80, 84–86, 94–96, 124, 203, 207, 219, 317; hyper- 317, 330

centres for technology transfer (CTT) 14, 17–18 Chesbrough, H. 145, 164 Christensen, C.M. 29 Cloodt, M. 163 clusters 6, 16, 103, 112–115, 118, 239, 249, 263, 327; export 114; industry 103, 110; local 114; resource-dependent 114 Colclough, N.S. 143 commercialisation 3–4, 10–11, 11, 14–18, 49, 53, 55, 110, 115, 157, 251 coronavirus see COVID-19 COVID-19 38, 93–94, 97, 167, 323, 328–329, 329, 331 cyber-physical systems (CPS) 24, 65, 84, 201, 207, 214 Czakon, W. 4

Banachowicz, E. 200 Bańka, W. 306 Banks, E. 306 Batista, N.C. 65 Bator, A. 205–206 Battery Electric Vehicle (BEV) 261–262 Bethke-Langenegger, P. 200 blends 29 Bonk, C.J. 29 Bourdieu, P. 307 Brynjolfsson, E. 65 Bukata, L. 65 Bush, V. 9 business-to-business (B2B) 132, 328 business-to-customer (B2C) 132

Dahlander, L. 57 Damasiotis, V. 225 De George-Walker, L. 31 Delphi method 312–313, 312 Deming, W.E. 295 Digital Economy and Society Index (DESI) 258 digitalisation 24, 65–66, 78–79, 95, 259, 265, 289 Douglas, Y. 66 Drucker, P.F. 25, 221, 294 Dubois, D.D. 226 Dziuban, C.D. 30

Cambridge University 10 Centre of Innovation and Technology Transfer (CITTRU) 14–15, 17–18

Eisenberger, R. 202 electronic HRM (E-HRM) 205–206 ENEA Operator 264–265, 264, 265, 267, 267 enterprise resource planning (ERP) 94

336 Index entrepreneurs 5, 12, 15, 17, 49, 52–54, 78, 80, 87, 105, 110, 112, 123, 147, 152, 199, 237–238, 249, 250, 263, 309, 328–332; academic 5, 12–13, 18 entrepreneurship 4–6, 8, 11, 13, 16, 18, 47, 49–52, 51, 58, 60, 105, 107–108, 109, 128, 132, 199, 217, 221, 279, 310, 328; academic 4, 7–8, 10, 14, 18 Environmentally Responsible Product Assessment (ERPA) 241, 243 Etzkowitz, H. 8–9, 13 European Innovation Scoreboard (EIS) 103–104, 108, 109–110, 117 Eyring, H.J. 29 Farell, O. 283 Fayol, H. 195 Ferguson, N. 319 flexibility 5, 26–28, 30–31, 38, 55, 89, 94, 142–144, 146, 203, 207–208, 214, 306, 311, 323, 327, 330; of mode 26; of pace 26; of place 26 Foley, S. 202 Follet, M.P. 196 Frey, C.B. 258 Friedman, J. 64 Fuel Cell Electric Vehicles (FCEV) 261 Gabriel, M. 65 Gann, D. 57 Garage of Complexity 17 Garrison, D.R. 28 Gaub, H. 258 Gausemeier, J. 256 Gielnicka, I. 305 Gilchrist, A. 201 Glickman, T.S. 25 global: companies 164; economy 37, 66, 258, 280, 304; industry 67; organisations 203, 332; tourism 185; warming 97 globalisation 3, 48, 55, 57–59, 80, 108, 145, 193, 199, 288 Goffin, K. 142 Gonzales-Brambila, C. 12 Gottel, W. 259 Grabinski, K. 31 Graham, C.R. 29 Gralewicz, G. 89 Hall, R.E. 125 Hang-yue, N. 202 Hardagon, A. 66 Harvard Business School 197 Harvard University 10

Hatch, M.J. 310 Helm, R. 13 Hemer, J. 13 Henderson, R. 12 Hermann. M. 258 higher education 10, 24–28, 31, 36–37, 80, 89, 105, 115, 147 Holstein-Beck, M. 293 human resources (HR) 85, 109, 118, 120, 155–156, 185–186, 197–202, 204–208, 256, 285, 287, 310 human resources management (HRM) 186, 193, 197–198, 200–202, 204–206, 208, 225 Huntington, R. 202 Hutchinson, S. 202 Hybrid Electric Vehicle (HEV) 261 Ibarra, D. 259 industrial revolution 78, 317; first 65, 317; fourth 24, 47, 66, 79, 85, 123–124, 128, 131–132, 183, 201, 214, 216, 219, 260, 317, 327; second 65, 317; third 65, 72, 86, 133, 317 Industry 4.0 24, 26–27, 65–66, 75, 78–80, 84–91, 92, 93–97, 124, 141–142, 162, 183–184, 193, 200–203, 206, 214, 221, 224, 226, 228, 256, 258–260, 285, 286, 317–318, 327, 330 information and communication technology (ICT) 26–27, 37, 89, 109, 123–126, 132, 146, 187, 214, 224–225, 268, 287, 320 infrastructure 6, 14, 17–18, 37, 55, 72, 79, 87, 105–107, 111, 115, 118–119, 123–127, 155, 169, 184–185, 187, 193, 214, 253, 257–260, 262, 264–265, 268, 320–321 innovation 4.0 141, 184, 280, 280–282, 287, 290, 293, 296, 318–319, 325, 328, 330–331; regional 103, 107–108, 112, 115–116, 117, 118–120 innovations: dynamics of 47, 58; ecological 237–241, 243–244, 249, 290–293, 298n18, 298n19, 298n20; financing 156; open 6, 55–56, 57, 58, 110, 112–113, 141, 144–147, 152–154, 153, 156–157, 162–166, 184–185, 282; technological 4, 6, 97, 253, 282, 297n3 innovative: economy 16, 48, 52; organisations 49, 145, 323–324, 324, 330–332; potential 18, 104, 146, 156, 215–216, 216, 219; university 3–8, 10, 12, 14, 18

Index  innovativeness 7, 11, 16, 18, 47–59, 51, 103–104, 107, 110, 114–120, 141–142, 144, 146, 155–156, 199, 206, 213–216, 219, 221, 224–225, 224, 226–227, 259, 279 instructor-led training (ILT) 32 internet 28, 37, 65, 84, 86, 184, 205, 252, 320, 331; connection 26, 33–34, 37, 87, 109; industrial 124, 258; of services (IoS) 201, 298n11; of things (IoT) 65, 78, 84, 86, 93–94, 97, 124, 132, 201, 205, 207, 214, 258, 285, 290, 297n11, 304, 317 Jabłonowska, L. 306 Jagiellonian Centre of Innovation (JCI) 14–15 Jagiellonian University (JU) 14–18 Johnson, B. 256 Kagermann, H. 256, 258–259 Kang, H.S. 258 Kanuka, H. 28 Kardas, M. 259 Keeffe, M. 31 Key National Cluster 16 Kidd, P. 322 Knowledge Assessment Methodology (KAM) 257–258 Knowledge Economy Index (KEI) 257–258 Knowledge Index (KI) 257–258 Koch, J. 142 Korneliussen, T. 256 Koschatzky, K. 13 Kostera, M. 310 Kotler, Ph. 283 Koźminski, A.K. 310 Kraiger, K. 204 Kuan Chung, L. 65 Łącka, I. 110 Landry, R. 12 learning: blended 28–32, 34–38, 34–35; flexible 27–28, 37; formal 25; hybrid 28; informal 25; lifelong 25, 109, 117; online 27–29, 31; personalised 27, 37; skills 38; specific 27 Lesser Poland 115 Levin, S.G. 10 Lichtenthaler, U. 146 Life Science Park 14, 16–17 Lindegaard, S. 165 Living Planet Index 241, 243

337

Livingstone, S. 225 Loi, R. 202 Lowe, R.A. 12 Lundvall, B. 256 McAfee, A. 65 MacDonald, J. 28 McGee, P. 28 Macnar, A. 197 Magruck, A. 65 Małopolska 17, 115–119, 116 Małopolska Centre of Biotechnology (MCB) 14 Marciniak, S. 143 Marginson, S. 256 Masłyk-Musiał, E. 307 Massachusetts Institute of Technology (MIT) 10 Mathis, T. 91 Mauroner, O. 13 Mayo, E. 195–196 Mazurek, G. 259 Meyer, M. 13 Miles, R.E. 197 Mintzberg, H. 309 Miśkiewicz, R. 256 Mitchell, R. 142 Moczydłowska, J. 225 Munsterberg, H. 196 Murphy, P. 256 Myśliwiec, G. 306 network: organisations 320–321; structures 4, 319, 332 Nordmann, A. 258 Norwegian Fisheries Museum 129, 130–131 Nosalska, K. 259 occupational health and safety (OHS) 84–86, 88–90, 96–97, 244 Oleksyn, T. 194, 215 Organization for Economic Cooperation and Development (OECD) 19n4, 162, 217, 227, 284, 297n1 Osborne, M.A. 258 Oslo Manual 162 Osterwalder, A. 259 Otto, B. 258 Ouchi, W.G. 305 Parry, E. 205 Pawłuszewicz-Matniuk, K. 197 Penc, J. 219 Pentek, T. 258

338 Index Perechuda, K. 307 Pessl, E. 65 Peters, M.A. 256 Pfeiffer, S. 65, 258 Pigneur, Y. 259 Plug-in Hybrid Electric Vehicle (PHEV) 261–262 Pol, E. 142 Porter, M.E. 112–114 Pratt, G.M. 213 PricewaterhouseCooper (PwC) 79, 87–88 Pride, W. 283

Sowa, D. 202 Stabryła, A. 256 Stanford University 10 Stanisławski, R. 49 Start-Up Challenge 128, 130, 132 Steiner, E. 223 Stephan, P.E. 10 Stuss, M. M. 226 Sullivan, J. 198 Suphan, A. 258 Szmurło, A. 306 Szymura-Tyc, M. 215

Quacquarelli Symonds 7

Taylor, F. 195 Teece, D.J. 165 Tiwari, S.K. 256 Tyson, S. 205

Rana, G. 193 Range Extended Electric Vehicle (REEV) 261 regional economy 112, 146 Regional Innovation Scoreboard (RIS) 103–104, 108, 109–110, 117 Reis, A. 28 renewable: energy 65, 244–247, 248, 249–252, 292; sources 245, 245, 247, 249, 265 Rifkin, J. 78 robotisation 65–66, 76, 78–79, 84, 86, 259, 317 Rostow, W. 64 Rothwell, W.J. 226 Rozkwitalska, M. 124 Rzepka, A. 327 Sadowski, A. 50 safety technology 91, 92 Schuh, G. 256 Schumpeter, J.A. 213 Schwab, K. 183 science and technology parks (PNT) 6, 18 shareholders 305, 308–313, 312, 314, 315, 332 Sharifi, H. 323 Sharma, R. 193 Shore, L.M. 202 Siam, M.R.A. 206 Sikorski, C. 306 Sima, V. 88 Slavik, J. 124 small and medium sized enterprises (SME) 16, 54, 56, 58–59, 70, 108, 109–110, 117, 123, 131–132, 133, 141, 143–147, 149–157, 150–151, 154–155, 165, 215, 258, 312, 313, 320, 332 smart city 123–127, 130–132, 134 Society 5.0 79

Ullrich, B.S. 259 Urlich, D. 199 Valiathan, P. 29 Vanhaverbeke, W. 163 Verburg, R.M. 225 Vieru, D. 225 Ville, S. 142 virtual learning environment (VLE) 30, 35, 204 virtual reality 97, 258, 290 Volat​ility​-Unce​rtain​ty-Co​mplex​ity-A​ mbigu​ity (VUCA) 183 Volchenkova, K. 28 Wahlster, W. 256 Wanyama, T. 65 Wayne, S.J. 202 Weber, R. 223 Węsierska, S. 197 White, S.C. 25 Wilkins, A.L. 305 Winter, M.L. 29 workforce 24, 88, 97, 199, 330 workplace 10, 25–26, 29, 52, 86, 89, 93–94, 97, 196, 200–201, 207–208, 216–217, 218, 223, 224, 226, 286, 288, 290, 309 World Economic Forum (WEF) 258 World War II 8–9, 195, 328 Woźniak, L. 292–293 Zhang, Z. 323 Zhong, R.Y. 259 Żołnierski, A. 216 Zook, C. 308, 312 Zott, C. 259