Innovation is important for business as well as for the society as a whole. Regulations are the gear of government to have a control over things but many a times such regulations can hinder growth. This paper will discuss consequences of regulation on two such innovative industries ‘Outsourcing’ and ‘Pharmaceutical’
Regulations and Innovation
Introduction
Innovation is the ability of a company to create wildly new products and services or even enhance the old one with new values. Innovation provides new direction to the company but many a times going international with new innovation can be problematic for the companies. As there are many non supportive regulations, especially the regulations based on culture could be real problem.
Innovation and Regulations:
One of the greatest business innovation observed recently has been ‘Outsourcing’. Outsourcing was seen as a greatest tool to cut costs and improve business productivity. Outsourcing from developed countries like United States and United Kingdom to developing countries like India and China have not just cut variety of costs for companies but also have provided jobs to many in these developing countries. There have been many regulations that hinder innovations related to outsourcing. The recent regulations by United States Government in tax cuts have hindered the ability of companies to innovate with their manufacturing through outsourcing.
However Innovation in many industries is hindered because of price regulations also. Innovation and research is of utmost importance in pharmaceutical industry. In many countries especially in European countries, strict price regulations related to pharmaceutical products hinders ability of company to innovate. As the innovation process in pharmaceutical in very complex and time consuming and requires a lot of funding and patience. But regulations related to price have jeopardized ability of companies to play with the innovations of drugs. Such regulations reduce value of the project and thus it can reduce or delay the launch of new products. Innovation through pharmaceutical products not just helps companies make wealth but help society as a whole.
References:
1. HG.org Legal Directories (2012). International Law Firms. 29 March 2012. Retrieved from web. http://www.hg.org/international-law.html
