Received: 11. December, 2003. Accepted: 30. March, 2004.

SUMMARY

This paper is a review from a business analyst's perspective of innovation and complexity concept and their impact upon the paths of business systems and organisations as wholes. Its task is also to catalyse a broader discussion on innovation segment that is by itself complex and its importance to business in a growing complex environment. The argument is that innovations should be the main driving force of business and other social systems due to their path-dependent and positive feedback features that provide for faster growth. Innovation is not limited solely to businesses and should also be viewed in respect to other social (public) systems whose segment often lack innovative approach. Innovation may be found to possess emergent properties like other events that appear in social systems that influence their change and adaptation. It determines path-dependency of such systems because it is considered an event arising early in the history of the system that determines its ultimate end state. Thus, understanding, managing and accepting innovations and its importance is crucial for recognition of complex processes of path-creation, dependence and emergence of forces that drive social systems. Viewed from aspect of transitional countries, it is crucial for judging the future stability of their social entities striving for development and recognised change.

KEY WORDS

complexity, innovation, business system, path dependence, feedback

CLASSIFICATION

JEL:

O31, P37