Earnings Drivers of Slovak Manufacturers: Efficiency Assessment of Innovation Management

Abstract

In innovation management, it is crucial to know the incentives or factors that, in many cases, provide the fundamental drivers of earnings, competitive advantage and the sustainable growth of businesses while also measuring their effectiveness. The study deals with the evaluation of the efficiency of investments in innovations utilizing constant returns to scale models of small- and medium-sized industrial enterprises in Slovakia. It is industrial production that includes enterprises that are the creators of new products, the appliers of the latest knowledge of science, and the creators of innovations. The main objective of the study is to evaluate the effectiveness of invested finances in the innovation of small- and medium-sized production enterprises in Slovakia, as it is a very demanding and neglected role in management. The method to assess the efficacy that was used is called Data Envelopment Analysis. CCR-I also CCR-O models were run, where it was essential to determine the inputs and outputs. The indicators R&D expenditures and employee training costs were selected based on a detailed analysis of articles with similar issues. The final sample contained 132 manufacturing enterprises within industrial production that were classified according to the official Slovak categorization because of their relevance. We assessed the effectiveness of food producers, beverage manufacturers, textile and clothing manufacturers, manufacturers of rubber plastic products, metal manufacturers, PC, electronic and optical equipment manufacturers, machine and equipment manufacturers, and furniture manufacturers to identify the enterprises that own earnings drivers caused by innovation. It was detected that the most efficient units in the industrial production are the rubber plastic products manufacturers. The least effective units were found in beverage and furniture manufacturers.