Next Article in Journal
Is Gold a Hedge against Stock Price Risk in U.S. or Indian Markets?
Next Article in Special Issue
Dataset Modelling of the Financial Risk Management of Social Entrepreneurship in Emerging Economies
Previous Article in Journal
ESG Disclosure and Portfolio Performance
 
 
Font Type:
Arial Georgia Verdana
Font Size:
Aa Aa Aa
Line Spacing:
Column Width:
Background:
Article

Managing the Risks of Innovative Activities Focused on the Consumer Market: Competitiveness vs. Corporate Responsibility

1
Compliance and Controlling Department, Peoples’ Friendship University of Russia (RUDN), 6 Miklukho-Maklay St., 117198 Moscow, Russia
2
State and Municipal Administration, Financial University under the Government of the Russian Federation, 49 Leningradsky Ave., 125167 Moscow, Russia
*
Author to whom correspondence should be addressed.
Risks 2021, 9(10), 173; https://doi.org/10.3390/risks9100173
Submission received: 13 August 2021 / Revised: 14 September 2021 / Accepted: 18 September 2021 / Published: 27 September 2021

Abstract

:
Purpose This paper aims to study the specifics of managing the risks of innovative activities during the implementation of the Sustainable Development Goals (SDGs) in entrepreneurship that is focused on the consumer market in countries with different levels of income. Design/methodology/approach The research is performed with the help of regression analysis (one-factor and multiple simple linear regression). Two samples are created for this: (1) countries with high income and (2) upper middle income and countries with lower middle income, according to the classification of World Bank GNI per capita in current USD (Atlas method). Findings It is determined that priorities of the consumer market (demand) are differentiated among countries with different levels of income. In countries with high income and upper middle income, corporate social responsibility does not determine the quality of life. Only competitiveness is a milestone during the implementation of the SDGs in entrepreneurship activities focused on the consumer market. In countries with lower middle income, neither corporate responsibility nor competitiveness is the decisive factor in managing the risks of innovative activities focused on the consumer market. Originality The originality of this research consists in a new view of competitiveness and corporate responsibility from the positions of their influence on the implementation of the SDGs entrepreneurship focused on the consumer market. Social implications Due to the practical implementation of the offered recommendations for corporate management of improving the practice of managing the risks of innovative activities focused on the consumer market, the Quality of Life Index will grow by 44.95% in countries with high income and upper middle income and by 98.69% in countries with lower middle income.

1. Introduction

Sustainable Development Goals (SDGs) are a set of goals formulated by the UN designed to solve the key global challenges of humankind and “transform our world”. Although the SDGs are diverse (they cover the economy, society, institutions, and environment), they are all united by a high and significant mission of improving the quality of life and preserving heritage for future generations. Successful implementation of the SDGs requires the involvement and active participation of entrepreneurship through building the SDGs in the corporate strategies (Popkova and Sergi 2020; Popkova et al. 2020; Popkova and Sergi 2021), which is shown in the reports of international organizations, in particular PWC (2021). The problem consists of the uncertainty of the treatment and approach to the implementation of the SDGs in entrepreneurship activities. Due to insufficient fundamental and methodological elaboration of the SDGs during their implementation by business, modern companies treat them as an increase of the level of corporate social and ecological responsibility (Bodhanwala and Bodhanwala 2018; Dubey et al. 2019; Fiorentino et al. 2020; Sannino et al. 2020; Zhu et al. 2019; Biloslavo et al. 2020).
However, the SDGs are diverse, and an important role in their implementation in entrepreneurship activities belongs to innovations, which consequences are contradictory (Buevich et al. 2019; Nosova et al. 2019). Thus, responsible innovations do not necessarily increase consumer value and usefulness of goods and services (Matrizaev et al. 2019). For example, a lot of consumers in a given society could be more interested in the growth of quality (technical characteristics) of products and their affordability (due to innovations) than in corporate responsibility, expenditures for which (in particular, for R&D) could lead to the growth of prices and sometimes to the reduction of quality (Suglobov et al. 2020).
The formal and generalized approach to the implementation of the SDGs is inadmissible. There is a necessity for a flexible approach, which would take into account the specifics of consumer preferences in different societies. There is a need for an alternative treatment of the implementation of the SDGs in entrepreneurship activities, in which innovations must be socially oriented, i.e., oriented at the consumer market (Sozinova 2020; Fokina 2020; Tsikin et al. 2019). In the new treatment, the SDGs are considered from all positions—taking into account corporate responsibility and competitiveness, which is often not considered by companies from the positions of sustainable development (treated as responsible innovations) but ensures the growth of quality and affordability of products, i.e., it could potentially increase the companies’ orientation at the consumer market (in case of the alternative treatment as socially-oriented innovations).
The following hypothesis (H0) is suggested: managing the risks of innovative activities that are focused on the consumer market cannot be universal; it requires a flexible consideration of the specifics of different societies (primarily the level of income) and could be ensured using corporate responsibility and through entrepreneurship competitiveness. The paper seeks the goal of studying the specifics of managing the risks of innovative activities during the implementation of the SDGs in entrepreneurship that is focused on the consumer market in countries with different levels of income. Among the previous studies highlighting how income levels can affect the SDGs are the works of (Fu 2021; Horn and Grugel 2018; Liu 2020; Nhamo et al. 2021).
The originality of this research consists in a new view of competitiveness and corporate responsibility—from the positions of their influence on the implementation of the SDGs in entrepreneurship that is focused on the consumer market. SDG 8 “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all” and SDG 12 “Ensure sustainable consumption and production patterns” (UN 2021) are considered as a whole, and the significance of competitiveness (SDG 8 in the aspect of economic growth and productive employment) and corporate responsibility (SDG 8 in the aspect of decent work for all and SDG 12) is determined for society (with a certain level of income).
The uniqueness of this paper is ensured by performing research on the example of countries with different levels of income. Differentiation of countries by the income criterion allows identifying the differences in the significance of private (competitiveness) and public (corporate responsibility) interests for consumers and, based on this, offering the corresponding recommendation on the implementation of the SDGs in entrepreneurship focused on the consumer market in countries with different levels of income. This allows the connection between sustainable development and level of income of countries to be proven, not in the aspect of progress in the implementation of the SDGs, which is elaborated and well-known, but in the less studied aspect of managing the risks of innovative activities in entrepreneurship.

2. Literature Review

2.1. Evolution of SDGs in Literature

The SDGs are paid close attention in the existing literature. In his work, Tjoa and Tjoa (2016) highlighted the important role of ICTs in achieving the UN Sustainable Development Goals (SDGs). Pérez et al. (2020) analyzed social responsibility in Colombia and proved the interconnections and synergies between the SDGs. Most of the existing work addresses the SDGs separately. Thus, in their work, Khaltaev and Akselrod (2021) demonstrated and proved the necessity and important role of the Global Alliance against Chronic Respiratory Diseases (GARD) in achieving the UN Sustainable Development Goals (SDG).
In turn, Madurai Elavarasan et al. (2021) presented the UN Sustainable Development Goals (SDGs) through the lens of energy sustainability (SDG 7) in the post-COVID-19 world. Zacharie et al. (2021) considered issues related to the UN SDG (2) on food security and substantiated that these issues require a priority solution in the Republic of Burundi. This allows us to determine the degree of study of the SDGs in the existing scientific literature as high.

2.2. Innovative Activities Management in Entrepreneurship in the Interests of Sustainable Development

Various aspects of the innovations management as a business process during building the SDGs in the corporate strategies are reflected in several works (Bolz and de Bruin 2019; Golini and Gualandris 2018; Kneipp et al. 2019; Martínez-Mora and Merino 2020; Ogoh and Fairweather 2019; Severo et al. 2020; Sundström et al. 2020; Yaghmaei 2018).
Thus, managing the risks of innovative activities in entrepreneurship in the interests of sustainable development has been studied in detail in the existing scientific literature, where it is treated from the positions of responsible innovations, i.e., based on corporate social responsibility. Nevertheless, the risk component of innovation, the essence, and prospects of risk management are not defined and are poorly studied. Selected issues related to the risks of innovation are discussed in the works of (Deng et al. 2021; Kliber et al. 2021; Manuylenko et al. 2021; Xie 2021).

2.3. The Existing Approach to the Implementation of the SDGs in Entrepreneurship Activities

The essence of the existing approach to the implementation of the SDGs in entrepreneurship activities has been studied in (Fischer et al. 2018; Hanohov and Baldacchino 2018; Kimuli et al. 2020; Muhammad Muneeb et al. 2020; Ogamba 2019; Quagrainie et al. 2020; Vuorio et al. 2018).
The issues of the implementation of the SDGs in entrepreneurship activities have been studied in detail and presented in multiple publications. The essence of the existing approach to the implementation of the SDGs in entrepreneurship activities consists of the increase of the level of corporate social responsibility.

2.4. Gap Analysis in the Management of Innovative Activities Focused on the Consumer Market

Competitiveness in its connection to sustainable development is studied in the works of (Afum et al. 2020; Alshubiri 2020; Karman and Savanevičienė 2020; Nadalipour et al. 2019). We see that it is considered from the positions of the economy as a whole and public administration, but separately from entrepreneurship and corporate management.
This causes incomplete (unilateral—from the positions of corporate responsibility) treatment of the implementation of the SDGs in the entrepreneurship activities during the management of innovative activities in the interests of sustainable development, and the absence of attention to competitiveness is a research gap, as well as the lack of a scientific understanding of the risks of innovation and its risk management. The specifics of sustainable development of countries with different levels of income have been studied in detail in the following publications: (Adeola et al. 2021; Ebohon et al. 2020; Jones and Comfort 2020; Pakdeechoho and Sukhotu 2018).
However, in the above works, the experience of sustainable development of countries with different levels of income is considered narrowly—only from the positions of the possibilities for the implementation of the SDGs (from the side of the offer), while from the positions of consumers’ interests (from the side of demand) this experience has not been studied, which is another gap in scientific knowledge. These gaps are to be filled in this paper. Here, the management of innovative activities focused on the consumer market (from the side of demand) is considered in view of competitiveness and corporate responsibility, with the differentiation and deep analysis of countries with different levels of income.

3. Research Design and Method

The offered hypothesis is tested with the help of regression analysis. Two samples are created for this: (1) countries with high income and (2) upper middle income and countries with lower middle income, according to the classification of World Bank (2021). Statistical data on the studied indicators are available for a limited range of countries—in particular, only for nine countries with lower middle income. To avoid the gaps in the array of data for the research (when considering countries with lower middle income for which not all data are available), and to ensure data compatibility for both samples (equal number of countries in the samples), they contain nine countries each.
The World Banks have compiled the country classification using the Atlas method, which smoothes out exchange rate fluctuations by using a three-year moving average and a price-adjusted conversion coefficient. The classification criterion is GNI per capita in current USD (Atlas method). The income boundaries are as follows:
-
countries with high income: >12.695 current USD;
-
countries with upper middle income: 4.096–12.695 current USD;
-
countries with lower middle income: 1.046–4.095 current USD.
To substantiate the sample of countries we have developed, we will provide information on which countries make up each group and what the GNI value of each country is in order to prove that it belongs to the group of countries identified in this study. Countries with high income:
-
Germany: 46.980 current USD;
-
South Korea: 32.860 current USD;
-
Switzerland: 87.950 current USD;
-
France: 42.290 current USD;
-
USA: 65.910 current USD.
Countries with upper middle income: current USD;
-
Brazil: 7.850 current USD;
-
China: 10.610 current USD;
-
Malaysia: 10.580 current USD;
-
Russia: 10.690 current USD.
Countries with lower middle income: current USD;
-
India: 1.900 current USD;
-
Philippines: 3.430 current USD;
-
Nigeria: 2.000 current USD;
-
Pakistan: 1.280 current USD;
-
Vietnam: 2.660 current USD;
-
Sri Lanka: 3.720 current USD;
-
Egypt: 3.000 current USD;
-
Bangladesh: 2.010 current USD;
-
Kenya: 1.760 current USD.
For each sample of countries (separately), two regression dependencies are determined.
1st: dependence of the Quality of Life Index (according to Numbeo (2021)—as the indicator of entrepreneurship’s orientation at the consumer market) on competitiveness (according to the World Economic Forum (2021)) and corporate responsibility (according to the Social Entrepreneurship Index of the Institute of Scientific Communications (2021)).
2nd: dependence of competitiveness and corporate responsibility (separately) on the Global Innovation Index (according to WIPO (2021)). The arrays of data for the research on both samples of countries are given in Table 1 and Table 2.
The formal models of this research have the following form.
Model 1 for counties with high income and upper middle income:
{ QL HiUMi = F ( GC HiUMi , SR HiUMi ) ; GC HiUMi = F ( GII HiUMi ) ; SR HiUMi = F ( GII HiUMi ) .
Model 2 for countries with lower middle income:
{ QL LMi = F ( GC LMi , SR LMi ) ; GC LMi = F ( GII LMi ) ; SR LMi = F ( GII LMi ) .
The economic and mathematical idea of the hypothesis is as follows: it is necessary to determine positive regression dependencies of QL on GC, GC on GII, and SR on GII in both presented models. To ensure the maximum reliability of the results, together with the regression analysis we perform the multicollinearity test, within which the correlation of factor variables in equations QLHiUMi = F(GCHiUMi, SRHiUMi) and QLLMi = F(GCLMi, SRLMi) is evaluated. Also, the heteroscedasticity test (F criterion) is performed, and the correlation coefficients for all equations in both models are taken into account.

4. Findings

4.1. SDGs in the Entrepreneurship Activities Focused on the Consumer Market in Countries with Different Levels of Income

To determine the specifics of implementing the SDGs in the entrepreneurship activities focused on the consumer market in countries with high income and upper middle income based on the materials from Table 1 and Table 2 within the formal model 1 we obtained the results of regression analysis, which are systematized in Table 3.
Based on the data from Table 3 we obtained the following equation of multiple linear regression:
QLHiUMi = −184.58 + 4.61 * GCHiUMi − 0.51 * SRHiUMi
According to the obtained regression equation, growth of competitiveness by 1 point leads to growth of the orientation at the consumer market by 4.61 points. Growth of corporate responsibility by 1 point leads to growth of the orientation at the consumer market by 0.51 points. Therefore, corporate social responsibility does not contribute to the implementation of the SDGs in entrepreneurship activities focused on the consumer market in countries with high income and upper middle income, while the contribution is made by competitiveness, which determines the quality and price of products.
Multiple correlation equals 0.8339. Therefore, the change of the Quality of Life Index by 83.39% is due to the change of both factor variables (GCHiUMi and SRHiUMi), which cross-correlation equals 0.7989 (below 0.9), due to which the multicollinearity test is passed (repeat of the factor variables is avoided). Significance F constitutes 0.028—the probability of acceptance of the heteroskedasticity hypothesis. The obtained (estimate) value F (Fest) equals 6.85, and table value F (Ftabl) for k1 = m = 2 (m = 2 factor variables in the model) and k2 = n-m-1 = 9-2-1 = 6 (n = 9 observations, countries in the sample) at the significance level α = 0.05 is 5.14. Since 6.85 > 5.14, the F test is passed, and Equation (1) is correct at α = 0.05.
To determine the specifics of implementing the SDGs in the entrepreneurship activities focused on the consumer market in countries with lower middle income based on materials from Table 2 within the formal model 2, we obtained the following equation of multiple linear regression:
QLLMi = 6.36 + 0.83 * GCLMi + 0.73 * SRLMi
According to the obtained regression equation, growth of competitiveness by 1 point leads to growth of the orientation at the consumer market by 0.83 points. Growth of corporate responsibility by 1 point leads to growth of the orientation at the consumer market by 0.73 points. Therefore, corporate social responsibility makes a lower, but also significant, contribution to implementing the SDGs in entrepreneurship activities focused on the consumer market in countries with lower middle income, together with competitiveness.
Multiple correlation is 0.5167. Therefore, the change of the Quality of Life Index by 51.67% is due to the change of both factor variables (GCLMi and SRLMi), the cross-correlation of which equals 0.7675 (below 0.9), due to which the multicollinearity test is passed (the repeat of factor variables is avoided). Significance F equals 0.394—this is the probability of adoption of the heteroskedasticity hypothesis. The obtained (estimate) value F (Fest) equals 1.09. Since Fest < Ftabl (1.09 < 5.14), the F test is not passed, and the obtained value (2) is not correct at the significance level α = 0.05.
Thus, the SDGs in entrepreneurship activities focused on the consumer market in counties with different income levels are different. The specifics of countries with high income and upper middle income are as follows: corporate social responsibility does not determine the quality of life, and only competitiveness is a milestone during implementing the SDGs in the entrepreneurship activities focused on the consumer market. The specific feature of countries with lower middle income is the fact that competitiveness and corporate social responsibility positively influence the quality of life, but their influence is weak. During the implementation of the SDGs in entrepreneurship activities focused on the consumer market, they are insignificant.

4.2. Priorities of Managing the Risks of Innovative Activities in the Consumer Markets of Countries with Different Levels of Income

To determine the priorities of managing the risks of innovative activities in the consumer markets of countries with different levels of income, let us determine the regression dependence of the selected factor variables that positively influence the quality of life from Equations (1) and (2) on innovations. In countries with high income and upper middle income, based on the materials from Table 1 within the formal model 1, we obtain the following equation of multiple linear regression:
GCHiUMi = 44.06 + 0.63 * GIIHiUMi
According to the obtained regression equation, growth of innovations by 1 point leads to growth of the Global Competitiveness Index by 0.63 points. Correlation equals 0.9368. Therefore, the change of competitiveness by 93.68% is due to the change of the Global Innovation Index.
Significance F equals 0.0002—this is the probability of the adoption of the heteroskedasticity hypothesis. The obtained (estimate) value F (Fest) equals 50.189, and table value F (Ftabl) for k1 = m = 1 (m = 1 factor variable in the model) and k2 = n-m-1 = 9-1-1 = 7 (n = 9 observations, countries in the sample) at the significance level α = 0.05 equals 5.59. Since 50.189 > 5.59, the F test is passed, and Equation (3) is correct at α = 0.05.
In countries with lower middle income, based on materials from Table 2 within the formal model 2, the following equations of multiple linear regression are obtained:
GCLMi = 37.42 + 0.68 * GIILMi
According to the obtained regression equation, growth of innovations by 1 point leads to growth of the Global Competitiveness Index by 0.68 points. Correlation equals 0.9331. Therefore, the change of competitiveness by 93.31% is due to the change of the Global Innovation Index.
Significance F equals 0.00024—this is the probability of adopting the heteroskedasticity hypothesis. The obtained (estimate) value F (Fest) equals 47.142. Since 47.142 > 5.59, the F test is passed, and Equation (4) is correct at α = 0.05.
SRLMi = 15.52 + 0.89 * GIILMi
According to the obtained regression equation, growth of innovations by 1 point leads to growth of the Social Entrepreneurship Index by 0.89 points. Correlation equals 0.8443. Therefore, the change of corporate social responsibility by 84.43% is due to the change of the Global Innovation Index.
Significance F equals 0.0042—this is the probability of adoption of the heteroskedasticity hypothesis. The obtained (estimate) value F (Fest) equals 17.378. Since 17.378 > 5.59, the F test is passed, and Equation (5) is correct at α = 0.05.
Thus, the priorities of managing the risks of innovative activities in the consumer markets of countries with different levels of income are different. In countries with high income and upper middle income, the priority is the growth of competitiveness, and in countries with lower middle income, competitiveness, and corporate social responsibility are milestones, but not priorities, as they contribute moderately to the increase of the quality of life.

5. Discussion

Based on the obtained results of the regression analysis, the formal model 1 is clarified in countries with high income and upper middle income, and the following systems of equations are obtained:
{ QL HiUM = 184.58 + 4.61 * GC HiUMi 0.51 * SR HiUMi GC HiUMi = 44.06 + 0.63 * GII HiUMi
According to this system of equations, the perspectives of improving the practice of managing the risks of innovative activities focused on the consumer market in countries with high income and upper middle income are determined. For this, “Search for solution” is Excel is used to solve two optimization tasks with the following conditions:
  • In the 1st task, the optimization goal is as follows: find the value of GCHiUMi (changed variable) and which QLHiUMi (target function) reaches the maximum possible level (200 points). Limitation of the optimization: GCHiUMi ≤ 100 (should not exceed its maximum possible value);
  • In the 2nd task, the optimization goal is as follows: find such value of GIIHiUMi (changed variable) at which GCHiUMi (target function) reaches the previously determined optimal value from the 1st task. Limitation of the optimization: GIIHiUMi i ≤ 100 (should not exceed its maximum possible value).
The solution of the above two tasks is shown in Figure 1.
As shown in Figure 1, the management implication for improving the practice of managing the risks of innovative activities focused on the consumer market in countries with high income and upper middle income is the increase of the Global Innovation Index from 50.69 points to 72.15 points (solution to the second optimization task), i.e., by 42.33%.
Due to this, the Global Competitiveness Index will grow from 75.81 points to 89.25 points (solution to the 1st optimization task), i.e., by 17.73%. If the Social Entrepreneurship Index remains unchanged, this will increase the Quality of Life Index from 137.98 points to a target maximum of 200 points, i.e., by 44.95%.
Based on the obtained results of the regression analysis, the formal model 2 is clarified in countries with lower middle income, and the following system of equations is obtained:
{ QL LMi = 6.36 + 0.83 * GC LMi + 0.73 * SR LMi GC LMi = 37.42 + 0.68 * GII LMi SR LMi = 15.52 + 0.89 * GII LMi
According to the given system of equations, the perspectives of improving the practice of managing the risks of innovative activities focused on the consumer market in countries with lower middle income are determined. For this, “Search for solution” is Excel is used to solve two optimization tasks with the following conditions:
  • In the 1st task, the optimization goal is as follows: find a combination of the values of GCLMi and SRLMi (changed variables) at which QLLMi (target function) reaches the maximum level. Limitations of the optimization: QLLMi ≤ 200, GCLMi ≤ 100, and SRLMi ≤ 100, i.e., all variables should not exceed their maximum possible values;
  • In the 2nd task, the optimization goal is as follows: find such value of GIILMi (changed variable) at which GCLMi and SRLMi (target function) reach the previously determined optimal values from the first task. Limitation of the optimization: GIILMi ≤ 100 (should not exceed its maximum possible value).
The solution of the above two tasks is shown in Figure 2.
Based on Figure 2, the management implication on improving the practice of managing the risks of innovative activities focused on the consumer market in countries with lower middle income is the increase of the Global Innovation Index from 27.21 points to 94.59 points (solution of the second optimization task), i.e., by 247.67%.
Due to this, the Global Competitiveness Index grows from 55.81 points to 100 points (solution of the first optimization task), i.e., by 79.18%, and the Social Entrepreneurship Index grows from 39.82 points to 100 points (solution of the first optimization task), i.e., by 151.12%. This will increase the Quality of Life Index from 81.95 points to 162.83 points, i.e., by 98.69%. This means and emphasizes that in countries with lower middle income, the possibilities for optimization of the practice of managing the risks of innovative activities focused on the consumer market are limited.

6. Conclusions

Thus, the offered hypothesis (H0) has been proved; it has been confirmed that the priorities of the consumer market (demand) are differentiated among countries with different levels of income. This requires a refusal from universalization and requires the use of a flexible approach to managing the risks of innovative activities focused on the consumer market, which would take into account the specifics of countries with different levels of income.
In countries with high income and upper middle income, corporate social responsibility does not determine the quality of life (which is proved by the negative regression), and, contrary to the existing idea of the priority of corporate responsibility, only competitiveness is a milestone during the implementation of the SDGs in the entrepreneurship activities focused on the consumer market. Thus, an increase of the value of the Global Competitiveness Index by 1 point leads to growth of the value of the Quality of Life Index by 4.61 points. On the whole, the two considered management tools (competitiveness and corporate responsibility) in countries with high income and upper middle income determine by 83.39% (multiple correlation) the success of managing the risks of innovative activities focused on the consumer market.
In countries with lower middle income, the management of innovative activities focused on the consumer market is more specific. Neither corporate responsibility nor competitiveness is the decisive factor in managing the risks of innovative activities focused on the consumer market in these countries. Though in both cases we see the positive regression dependence of the quality of life on these management tools (0.73 points and 0.83 points, accordingly), they determine the change of the result (quality of life) of managing the risks of innovative activities focused on the consumer market only by 51.67% (multiple correlation).
The obtained regression equation is insufficiently reliable (it hasn’t passed the F test and has a high—0.394—the probability of adopting the heteroskedasticity hypothesis). This means that in countries with lower middle income, the management of innovative activities during the implementation of the SDGs focused on the consumer market is determined by other factors that go beyond the limits of this research.
The received results allow specifying the essence of the treatment of the SDGs during their implementation in the entrepreneurship activities focused on the consumer market. SDG 12 is treated as stable (deficit-free) consumption, and SDG 8 envisages maximization of the contribution of entrepreneurship to the acceleration of economic growth and provision of productive employment for the growth of global competitiveness to increase quality and affordability of products for consumers, which allows raising the quality of life in countries with high income and upper middle income.
In countries with lower middle income, the orientation at the consumer market does not envisage the implementation of SDG 8 or SDG 12 in entrepreneurship activities. This is a sign of contradiction of the current formulation of these two SDGs to society’s interests in countries with lower middle income. Research implications of this conclusion include the necessity for the search for more significant priorities of society in these countries and more significant management tools to observe these priorities in entrepreneurship. When building SDG 8 and SDG 12 in the corporate strategies, it is necessary to take into account this feature of countries with lower middle income.
Practical (for corporate management) implications include substantiating the perspectives and developing the applied recommendations to improve the practice of managing the risks of innovative activities focused on the consumer market in countries with different levels of income. In countries with high income and upper middle income, it is recommended to increase the Global Innovation Index by 42.33%, due to which the Global Competitiveness Index will grow by 17.73%. In countries with lower middle income, it is recommended to increase the Global Innovation Index by 247.67%. This will lead to the growth of the Global Competitiveness Index by 79.18% and the Social Entrepreneurship Index by 151.12%.
Social implications are as follows: thank the practical implementation of the offered recommendations for corporate management of the improvement of the practice of managing the risks of innovative activities focused on the consumer market, the Quality of Life Index will grow by 44.95% in countries with high income and upper middle income and by 98.69% in countries with lower middle income.
It should be noted that research limitations include the following aspect: experience of countries with low income has not been studied in this paper because of the absence of data for almost all indicators. The deficit of the statistical data causes uncertainty as to the specifics and perspectives of managing the risks of innovative activities in entrepreneurship focused on the consumer market in low-income countries. The obvious risk of this uncertainty is the insufficient adaptation of the SDGs in entrepreneurship activities to the specifics of the poorest countries and, accordingly, low results in the sphere of sustainable development.
The contribution of the article to the literature consists in rethinking innovative activity from the standpoint of risk and the development of applied recommendations in the field of improving the practice of risk management of this activity. The article corresponds, develops, and supplements the provisions of the Theory of Innovation, Theory of Management, and Theory of Risk. During further research, it is expedient to study the experience of low-income countries with the use of alternative data. It is also recommended to continue the scientific search for the prospective tools of managing the risks of innovative activities focused on the consumer market in countries with lower middle income, expanding the limits of the search beyond competitiveness and corporate responsibility.

Author Contributions

Conceptualization, J.V.R.; methodology, S.E.P.; formal analysis, S.E.P.; investigation, S.E.P.; data curation, T.V.B.; writing—original draft preparation, J.V.R.; writing—review and editing, J.V.R.; visualization, T.V.B.; supervision, J.V.R.; project administration, T.V.B. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Not applicable.

Acknowledgments

This paper was supported by the RUDN University Strategic Academic Leadership Program.

Conflicts of Interest

The authors declare no conflict of interest.

References

  1. Adeola, Ogechi, Prince Gyimah, Kingsley Opoku Appiah, and Robert N. Lussier. 2021. Can critical success factors of small businesses in emerging markets advance UN Sustainable Development Goals? World Journal of Entrepreneurship, Management, and Sustainable Development 17: 85–105. [Google Scholar] [CrossRef]
  2. Afum, Ebenezer, Yaw Agyabeng-Mensah, Zhuo Sun, Bright Frimpong, Lawrence Yaw Kusi, and Innocent Senyo Kwasi Acquah. 2020. Exploring the link between green manufacturing, operational competitiveness, firm reputation, and sustainable performance dimensions: A mediated approach. Journal of Manufacturing Technology Management 31: 1417–38. [Google Scholar] [CrossRef]
  3. Alshubiri, Faris. 2020. Investment obstacles to sustainable development and competitiveness index. Marketing Intelligence & Planning 39: 234–48. [Google Scholar] [CrossRef]
  4. Biloslavo, Roberto, Carlo Bagnoli, Maurizio Massaro, and Antonietta Cosentino. 2020. Business model transformation toward sustainability: The impact of legitimation. Management Decision 58: 1643–62. [Google Scholar] [CrossRef]
  5. Bodhanwala, Shernaz, and Ruzbeh Bodhanwala. 2018. Does corporate sustainability impact firm profitability? Evidence from India. Management Decision 56: 1734–47. [Google Scholar] [CrossRef]
  6. Bolz, Karsten, and Anne de Bruin. 2019. Responsible innovation and social innovation: Toward an integrative research framework. International Journal of Social Economics 46: 742–55. [Google Scholar] [CrossRef]
  7. Buevich, Anzhelika, Karamova Olga, and Sumarokov Evgeny. 2019. Comparative analysis of economic concepts in Karl Marx’s “capital” and the modern theory of innovative economy. In Marx and Modernity: A Political and Economic Analysis of Social Systems Management. A Volume in the Series Advances in Research on Russian Business and Management. Edited by Marina L. Alpidovskaya and Elena G. Popkova. Charlotte: Information Age Publishing, pp. 473–82. Available online: https://www.infoagepub.com/products/Marx-and-Modernity (accessed on 1 August 2021).
  8. Deng, Liurui, Yongbin Lv, Ye Liu, and Yiwen Zhao. 2021. Impact of fintech on bank risk-taking: Evidence from China. Risks 9: 99. [Google Scholar] [CrossRef]
  9. Dubey, Rameshwar, Angappa Gunasekaran, Stephen J. Childe, Thanos Papadopoulos, and Petri Helo. 2019. Supplier relationship management for circular economy: Influence of external pressures and top management commitment. Management Decision 57: 767–90. [Google Scholar] [CrossRef]
  10. Ebohon, Obas John, Amal Abuzeinab, Muyiwa Oyinlola, and Timothy Whitehead. 2020. Sustainable transformation of low-income communities: A multidisciplinary approach to scalable solutions. World Journal of Science, Technology and Sustainable Development 17: 125–27. [Google Scholar] [CrossRef]
  11. Fiorentino, Raffaele, Francesco Grimaldi, Rita Lamboglia, and Alessandro Merendino. 2020. How smart technologies can support sustainable business models: Insights from an air navigation service provider. Management Decision 58: 1715–36. [Google Scholar] [CrossRef]
  12. Fischer, Denise, René Mauer, and Malte Brettel. 2018. Regulatory focus theory and sustainable entrepreneurship. International Journal of Entrepreneurial Behavior & Research 24: 408–28. [Google Scholar] [CrossRef]
  13. Fokina, Olga. 2020. Marketing Management of Projects for the Introduction of “Smart” Leaning Technologies as a Method of De Monopolization of Digital Economy Markets. Web Site “Scientific Narratives of Russia”. Available online: https://iscconf.ru/маркетингoвoе-управление-прoектами/ (accessed on 1 August 2021).
  14. Fu, Guoxin. 2021. Toward achieving sustainable development goal 3: Determinants, innovations, and reactions from 110 countries with different income levels. Sustainable Development 29: 607–23. [Google Scholar] [CrossRef]
  15. Golini, Ruggero, and Jury Gualandris. 2018. An empirical examination of the relationship between globalization, integration and sustainable innovation within manufacturing networks. International Journal of Operations & Production Management 38: 874–94. [Google Scholar] [CrossRef]
  16. Hanohov, Ruven, and Leonie Baldacchino. 2018. Opportunity recognition in sustainable entrepreneurship: An exploratory study. International Journal of Entrepreneurial Behavior & Research 24: 333–58. [Google Scholar] [CrossRef]
  17. Horn, Philipp, and Jean Grugel. 2018. The SDGs in middle-income countries: Setting or serving domestic development agendas? Evidence from Ecuador. World Development 109: 73–84. [Google Scholar] [CrossRef]
  18. Institute of Scientific Communications. 2021. Data Set “Social Entrepreneurship in the World Economy: From Virtual Evaluations to Big Data 2020. Available online: https://iscvolga.ru/dataset-social-predprinim (accessed on 1 September 2021).
  19. Jones, Peter, and Daphne Comfort. 2020. The UK’s largest volume housebuilders and the sustainable development goals. Property Management 39: 139–52. [Google Scholar] [CrossRef]
  20. Karman, Agnieszka, and Asta Savanevičienė. 2020. Enhancing dynamic capabilities to improve sustainable competitiveness: Insights from research on organizations of the Baltic region. Baltic Journal of Management 16: 318–41. [Google Scholar] [CrossRef]
  21. Khaltaev, Nikolai, and Svetlana Akselrod. 2021. Role of Global alliance against chronic respiratory diseases (GARD) in achievement of the un sustainable development goals (SDG) and targets. Journal of Thoracic Disease 13: 5117–22. [Google Scholar] [CrossRef]
  22. Kimuli, Saadat Nakyejwe Lubowa, Laura Orobia, Humphrey Muki Sabi, and Clive Katiba Tsuma. 2020. Sustainability intention: Mediator of sustainability behavioral control and sustainable entrepreneurship. World Journal of Entrepreneurship, Management and Sustainable Development 16: 81–95. [Google Scholar] [CrossRef]
  23. Kliber, Agata, Będowska-Sójka Barbara, Rutkowska Aleksandra, and Świerczyńska Katarzyna. 2021. Triggers and obstacles to the development of the fintech sector in Poland. Risks 9: 30. [Google Scholar] [CrossRef]
  24. Kneipp, Jordana Marques, Clandia Maffini Gomes, Roberto Schoproni Bichueti, Kamila Frizzo, and Ana Paula Perlin. 2019. Sustainable innovation practices and their relationship with the performance of industrial companies. Revista de Gestão 26: 94–111. [Google Scholar] [CrossRef] [Green Version]
  25. Liu, Suyu. 2020. Interactions between industrial development and environmental protection dimensions of Sustainable Development Goals (SDGs): Evidence from 40 countries with different income levels. Environmental and Socio-Economic Studies 8: 60–67. [Google Scholar] [CrossRef]
  26. Madurai Elavarasan, Rajvikram, Rishi Pugazhendhi, Taskin Jamal, Joanna Dyduch, M. T. Arif, Nallapaneni Manoj Kumar, G. M. Shafiullah, Shauhrat S. Chopra, and Mithulananthan Nadarajah. 2021. Envisioning the UN Sustainable Development Goals (SDGs) through the lens of energy sustainability (SDG 7) in the post-COVID-19 world. Applied Energy 292: 116665. [Google Scholar] [CrossRef]
  27. Manuylenko, Viktoriya Valeryevna, Aminat Islamovna Borlakova, Alexander Vladimirovich Milenkov, Olga Borisovna Bigday, Elena Andreevna Drannikova, and Tatiana Sergeevna Lisitskaya. 2021. Development and validation of a model for assessing potential strategic innovation risk in banks based on data mining-monte-carlo in the “open innovation” system. Risks 9: 118. [Google Scholar] [CrossRef]
  28. Martínez-Mora, Carmen, and Fernando Merino. 2020. Consequences of sustainable innovations on the reshoring drivers’ framework. Journal of Manufacturing Technology Management 31: 1373–90. [Google Scholar] [CrossRef]
  29. Matrizaev, Bakhadyr., Gaisina Olga, and Allakhverdieva Leila. 2019. A research of macro-institutional foundations of neo-global innovation growth in the light of Karl Marx’s theory of the capitalism crisis. In Marx and Modernity: A Political and Economic Analysis of Social Systems Management. A Volume in the Series Advances in Research on Russian Business and Management. Edited by Marina L. Alpidovskaya and Elena G. Popkova. Charlotte: Information Age Publishing, pp. 361–72. Available online: https://www.infoagepub.com/products/Marx-and-Modernity (accessed on 1 September 2021).
  30. Muhammad Muneeb, Farhan, Amir Karbassi Yazdi, Peter Wanke, Cao Yiyin, and Muhammad Chughtai. 2020. Critical success factors for sustainable entrepreneurship in Pakistani Telecommunications industry: A hybrid grey systems theory/best-worst method approach. Management Decision 58: 2565–91. [Google Scholar] [CrossRef]
  31. Nadalipour, Zahra, Mohammad Hossein Imani Khoshkhoo, and Abdolreza Roknoddin Eftekhari. 2019. An integrated model of destination sustainable competitiveness. Competitiveness Review 29: 314–35. [Google Scholar] [CrossRef]
  32. Nhamo, Godwell, David Chikodzi, Hlengiwe Precious Kunene, and Nthivhiseni Mashula. 2021. COVID-19 vaccines and treatments nationalism: Challenges for low-income countries and the attainment of the SDGs. Global Public Health 16: 319–39. [Google Scholar] [CrossRef]
  33. Nosova, Svetlana, Kolodnyaya Galina, and Bondarev Sergei. 2019. Collaboration in the aspect of the formation of the innovative economy of Russia. In Marx and Modernity: A Political and Economic Analysis of Social Systems Management. A Volume in the Series Advances in Research on Russian Business and Management. Edited by Marina L. Alpidovskaya and Elena G. Popkova. Charlotte: Information Age Publishing, pp. 525–35. Available online: https://www.infoagepub.com/products/Marx-and-Modernity (accessed on 1 August 2021).
  34. Numbeo. 2021. Quality of Life Index for Country 2021. Available online: https://www.numbeo.com/quality-of-life/rankings_by_country.jsp?title=2021&displayColumn=-1 (accessed on 2 August 2021).
  35. Ogamba, Ikedinachi K. 2019. Millennials empowerment: Youth entrepreneurship for sustainable development. World Journal of Entrepreneurship, Management, and Sustainable Development 15: 267–78. [Google Scholar] [CrossRef]
  36. Ogoh, George Inyila, and N. Ben Fairweather. 2019. The state of the responsible research and innovation program: A case for its application in additive manufacturing. Journal of Information, Communication and Ethics in Society 17: 145–66. [Google Scholar] [CrossRef]
  37. Pakdeechoho, Nutcharee, and Vatcharapol Sukhotu. 2018. Sustainable supply chain collaboration: Incentives in emerging economies. Journal of Manufacturing Technology Management 29: 273–94. [Google Scholar] [CrossRef] [Green Version]
  38. Pérez, Óscar Iván, María Claudia Romero, and Paola Vargas González. 2020. Interlinkages and synergies between sdg: An analysis from the perspective of social responsibility in colombia. Desarrollo y Sociedad 2020: 191–244. [Google Scholar] [CrossRef]
  39. Popkova, Elena G., and Bruno S. Sergi. 2020. Human capital and AI in industry 4.0. Convergence and divergence in social entrepreneurship in Russia. Journal of Intellectual Capital 21: 565–81. [Google Scholar] [CrossRef]
  40. Popkova, Elena G., and Bruno S. Sergi. 2021. Paths to the development of social entrepreneurship in Russia and central Asian countries: Standardization versus de-regulation. In Entrepreneurship for Social Change. Bingley: Emerald Publishing Limited, pp. 161–77. [Google Scholar] [CrossRef]
  41. Popkova, Elena G., Alexander N. Alekseev, Svetlana V. Lobova, and Bruno S. Sergi. 2020. The Theory of Innovation and Innovative Development. AI Scenarios in Russia. Technology in Society 63: 101390. [Google Scholar] [CrossRef]
  42. PWC. 2021. Sozdanie Strategii Ustoychivogo Razvitiya: Kak Tseli v Oblasti Ustoychivogo Razvitiya Mogut Pomoch’ Biznesu v reshenii global’nykh problem [Creating a Sustainable Development Strategy: How the Sustainable Development Goals Could Help Business to Solve Global Problems]. Available online: https://www.pwc.ru/ru/publications/collection/pwc-sdg-challenge-2019-rus.pdf (accessed on 2 August 2021).
  43. Quagrainie, Fanny Adams, Samuel Adams, Alan Anis Mirhage Kabalan, and Afia Dentaa Dankwa. 2020. Micro-entrepreneurship, sustainable development goal one and cultural expectations of Ghanaian women. Journal of Entrepreneurship in Emerging Economies 13: 86–106. [Google Scholar] [CrossRef]
  44. Sannino, Giuseppe, Ferdinando Di Carlo, and Manuela Lucchese. 2020. CEO characteristics and sustainable business model in financial technologies firms: Primary evidence from the utilization of innovative platforms. Management Decision 58: 1779–99. [Google Scholar] [CrossRef]
  45. Severo, Eliana Andréa, Marcia Marisa Santanna Perin, Julio Cesar Ferro De Guimarães, and Elaine Taufer. 2020. The relationship between sustainable innovation and product or service innovation: A survey in companies in the Rio Grande do Sul. Revista de Gestão 27: 319–34. [Google Scholar] [CrossRef]
  46. Sozinova, Anastasia. 2020. Comprehensive Diagnostics of the Shadow Economy in the Regions of Russia According to the Criterion of Marketing Activity in Entrepreneurship in the Interests of Sustainable Development. Web Site “Scientific narratives of Russia”. Available online: https://iscconf.ru/кoмплекcная-диагнocтика-теневoй-экo/ (accessed on 2 August 2021).
  47. Suglobov, Alexander E., Irina P. Drachena, Elena E. Tolikova, Tatyana I. Rudakova, and Dmitry M. Manyshin. 2020. Special Methodology for Resolution of Conflicts between Participants of Technology Parks and Innovation Networks. In Alternative Methods of Judging Economic Conflicts in the National Positive and Soft Law. A Volume in the Series Advances in Research on Russian Business and Management. Edited by Agnessa O. Inshakova and Aleksei V. Bogoviz. Charlotte: Information Age Publishing, Available online: https://www.infoagepub.com/products/Alternative-Methods-of-Judging-Economic-Conflicts-in-the-National-Positive-and-Soft-Law (accessed on 2 August 2021).
  48. Sundström, Agneta, Akmal S. Hyder, and Ehsanul Huda Chowdhury. 2020. Market-oriented CSR implementation in SMEs with sustainable innovations: An action research approach. Baltic Journal of Management 15: 775–95. [Google Scholar] [CrossRef]
  49. Tjoa, A. Min, and Simon Tjoa. 2016. The role of ICT to achieve the UN sustainable development goals (SDG). IFIP Advances in Information and Communication Technology 481: 3–13. [Google Scholar] [CrossRef] [Green Version]
  50. Tsikin, Alexey M., Azamat B. Berberov, and Ali B. Berberov. 2019. Management of competitiveness through the prism of Marx’s ideas: Evolution of the Russian models. In Marx and Modernity: A Political and Economic Analysis of Social Systems Management. A Volume in the Series Advances in Research on Russian Business and Management. Edited by Marina L. Alpidovskaya and Elena G. Popkova. Charlotte: Information Age Publishing, pp. 559–72. Available online: https://www.infoagepub.com/products/Marx-and-Modernity (accessed on 2 August 2021).
  51. UN. 2021. The 17 Goals. Available online: https://sdgs.un.org/ru/goals (accessed on 2 August 2021).
  52. Vuorio, Anna Maija, Kaisu Puumalainen, and Katharina Fellnhofer. 2018. Drivers of entrepreneurial intentions in sustainable entrepreneurship. International Journal of Entrepreneurial Behavior & Research 24: 359–81. [Google Scholar] [CrossRef] [Green Version]
  53. WIPO. 2021. The Global Innovation Index—2020. Available online: https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2020.pdf (accessed on 2 August 2021).
  54. World Bank. 2021. The World by Income: The Current Classification by Income in XLS Format. Available online: https://datatopics.worldbank.org/world-development-indicators/the-world-by-income-and-region.html (accessed on 2 August 2021).
  55. World Economic Forum. 2021. The Global Competitiveness Report 2019. Available online: https://www.weforum.org/reports/how-to-end-a-decade-of-lost-productivity-growth (accessed on 2 August 2021).
  56. Xie, Shengkun. 2021. Improving explainability of major risk factors in artificial neural networks for auto insurance rate regulation. Risks 9: 126. [Google Scholar] [CrossRef]
  57. Yaghmaei, Emad. 2018. Responsible research and innovation key performance indicators in the industry: A case study in the ICT domain. Journal of Information, Communication and Ethics in Society 16: 214–34. [Google Scholar] [CrossRef]
  58. Zacharie, Miburo, L. Yu Lagutkina, A. V. Melnicov, Yu V. Fedorovykh, I. V. Volkova, and A. B. Akhmedzhanova. 2021. Issues related to un SDG (2) on food security in the republic of Burundi. IOP Conference Series: Earth and Environmental Science 723: 022014. [Google Scholar] [CrossRef]
  59. Zhu, Qin, Renan Jia, and Xiaohua Lin. 2019. Building sustainable circular agriculture in China: Economic viability and entrepreneurship. Management Decision 57: 1108–22. [Google Scholar] [CrossRef]
Figure 1. Perspectives of improving the practice of managing the risks of innovative activities focused on the consumer market in countries with high income and upper middle income. Source: Calculated and compiled by the authors.
Figure 1. Perspectives of improving the practice of managing the risks of innovative activities focused on the consumer market in countries with high income and upper middle income. Source: Calculated and compiled by the authors.
Risks 09 00173 g001
Figure 2. Perspectives of improving the practice of managing the risks of innovative activities focused on the consumer market in countries with lower middle income. Source: Calculated and compiled by the authors.
Figure 2. Perspectives of improving the practice of managing the risks of innovative activities focused on the consumer market in countries with lower middle income. Source: Calculated and compiled by the authors.
Risks 09 00173 g002
Table 1. Innovations, orientation at the consumer market: competitiveness and corporate responsibility in countries with high income and upper middle income in 2021, points 0–100.
Table 1. Innovations, orientation at the consumer market: competitiveness and corporate responsibility in countries with high income and upper middle income in 2021, points 0–100.
Income CategoryCountryQuality of Life IndexGlobal Competitiveness IndexSocial Entrepreneurship IndexGlobal Innovation Index
QLHiUMiGCHiUMiSRHiUMiGIIHiUMi
High incomeGermany176.7681.861.14056.55
South Korea130.0279.659.32756.11
Switzerland190.8282.362.69966.08
France150.7378.855.34153.66
USA166.9883.773.23860.56
Upper middle incomeBrazil104.7560.99.02731.94
China103.1573.946.68553.28
Malaysia116.9474.652.95942.42
Russia101.6766.761.14735.63
Table 2. Innovations, orientation at the consumer market: competitiveness and corporate responsibility in countries with lower middle income in 2021, points 0–100.
Table 2. Innovations, orientation at the consumer market: competitiveness and corporate responsibility in countries with lower middle income in 2021, points 0–100.
Income CategoryCountryQuality of Life IndexGlobal Competitiveness IndexSocial Entrepreneurship IndexGlobal Innovation Index
QLLMiGCLMiSRLMiGIILMi
Lower middle incomeIndia104.5261.454.08635.59
Philippines78.3961.946.77335.19
Nigeria52.0048.337.44520.13
Pakistan105.1451.437.23622.31
Vietnam88.3861.543.57437.12
Sri Lanka79.7857.138.28623.78
Egypt88.3154.534.63424.23
Bangladesh65.2752.129.76020.39
Kenya75.7754.136.60526.13
Table 3. Results of the regression analysis.
Table 3. Results of the regression analysis.
Regression StatisticsQuality of Life ModelCompetitiveness ModelSocial Entrepreneurship Model
QLHiUMiGCHiUMiGCLMiGCLMiSRLMi
Multiple R0.830.940.930.930.84
Invariable−184.5844.0637.4237.4215.52
Coefficient at GСHiUMi4.610.630.680.680.89
Coefficient at SRHiUMi−0.510.73---
Source: Authors.
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Share and Cite

MDPI and ACS Style

Ragulina, J.V.; Prokofyev, S.E.; Bratarchuk, T.V. Managing the Risks of Innovative Activities Focused on the Consumer Market: Competitiveness vs. Corporate Responsibility. Risks 2021, 9, 173. https://doi.org/10.3390/risks9100173

AMA Style

Ragulina JV, Prokofyev SE, Bratarchuk TV. Managing the Risks of Innovative Activities Focused on the Consumer Market: Competitiveness vs. Corporate Responsibility. Risks. 2021; 9(10):173. https://doi.org/10.3390/risks9100173

Chicago/Turabian Style

Ragulina, Julia V., Stanislav E. Prokofyev, and Tatyana V. Bratarchuk. 2021. "Managing the Risks of Innovative Activities Focused on the Consumer Market: Competitiveness vs. Corporate Responsibility" Risks 9, no. 10: 173. https://doi.org/10.3390/risks9100173

Note that from the first issue of 2016, this journal uses article numbers instead of page numbers. See further details here.

Article Metrics

Back to TopTop