An analysis on the process innovation cost and diffusion effects in the manufacturing industry

Based on classification of the process innovation, cost analysis method is used to demonstrate the operational mechanism of the process innovations that contribute to profits of enterprises and increase output. Through the analysis of profits and output caused by the process innovation, this paper clarifies that the process innovations have the micro-economic foundation to drive forward the development of enterprises. In this paper, some attempts on influential factors for the diffusion effects of process innovations are also tried. Returns from innovated process technique, cost of an enterprise spending in using new process technique and factors of market are the most important factors during the diffusion of process innovations. The government may improve the productivity of manufacturing industry and reinforce the manufacturing enterprises´ international competence by supporting process innovations of key enterprises and making use of diffusion effects of process innovations.