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Profit Maximization Through Innovation Technologies

Agricultural industry is one of the most important industries of Uzbekistan. Agriculture sector employs 28% of Uzbekistan’s labor force and generates 24% of its GDP (Uzreport, 2006). Therefore further development of agricultural industry in Uzbekistan is crucial for Uzbek nation. According to UNDP within the next 20 years, the world will gain another 1. 4 billion people. Representing a 25-percent increase in global population, most of these people will live in the expanding urban centers of developing countries and will add greatly to the world’s demand for food.

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Demand for food products will increase. Meeting these increased food demands will be opportunity for the world’s agricultural producers as well as for Uzbek suppliers. But, there are some barriers for local greenhouse businesses to meet those demands. In a context of land and water scarcity, climate change, and declining crop yields will require significant innovation in agriculture (Eliot, 2010).

Successful technological innovation in greenhouse farming plays a decisive role on the development of countries and agriculture industry, it can contribute to a more efficient and sustainable use of natural resources. (IICA, 2002). The following business project proposal is fully dedicated to analyze feasibility and profitability of implementing innovation technologies in Uzbek greenhouses which locally produce vegetables and export them to foreign company. Literature Review Innovations can be classified into different categories.

Categories in this classification include mechanical innovations (tractors and combines), biological innovations (new seed varieties), chemical innovations (fertilizers and pesticides), agronomic innovations (new management practices), technological innovations (heating, cooling , packaging) biotechnological innovations, and informational innovations that rely mainly on computer technologies. ( D. Sunding and D. Zilberman, 2000). In this study technological innovation will more predominant.

Innovations can also be distinguished by their impacts on economic agents and markets which affect their modeling; these categories include yield-increasing, cost reducing, quality-enhancing, risk-reducing, environmental-protection increasing. (David,2000). Hayami and Ruttan (1985) formalized their theory of induced innovations that closely linked the emergence of innovations with economic conditions. They argued that the search for new innovations is an economic activity that is significantly affected by economic conditions.

New innovations are more likely to emerge in response to scarcity and economic opportunities. For example, high energy costs will induce energy-saving technologies. In the case of Uzbekistan high heating and cooling costs can be dominant factors to develop and implement new cost efficient innovation technoligies into practice. Induced innovations theory can be valid in such cases. However , Olmstead and Rhode (1993) states that demand considerations represented by the induced-innovation hypothesis do not provide the sole explanation for the introduction of new technologies.

They conclude that during the nineteenth century, when farm machinery was introduced in the United States, land prices increased relative to labor prices, which seems to contradict the induced-innovation hypothesis. The operation of a greenhouse involves the extensive use of heat, especially during the winter time. By reducing the cost of heat, it should be possible to further expand the greenhouse industry in Uzbekistan. One way to do this is to capture unused heat that is escaping from a source into the atmosphere and then to distribute this heat for use in a greenhouse operation.

The ability to benefit from waste heat depends to a large extent on the capital costs required to implement the waste heat capture and distribution system CAEEDAC(2002). According to Angel Gurria, broader implementation of existing innovation technologies could increase yields very significantly in many developing countries. This can have a very substantive impact on development. Innovation in agriculture and sub-industries can be a key driver of poverty reduction in poor rural economies (OECD,2010).

The impact on the environment could also be major while using water efficient technologies watering more efficiently and less wastefully. This includes drip irrigation systems, desalination, recycling, or drought-resistant plants. Such technologies already have been applied in USA and EU countries which enable farmers to improve profitability by using less fertilizer and pesticides, with little or no fall in yields, through the adoption of new methods. (Gurria, 2010. ) Another highlighted issue in literature is greenhouse emissions caused by natural gas burning. Natural gas is mostly used energy type in greenhouse industry .

Greenhouse gas emissions included approximately 465,000 metric tons of CO2, 9 metric tons of CH4 and 7 metric tons of N2O in 2006 worldwide (BD, 2010). Negative impact of natural gas to environment also another need to develop new energy saving technologies and secure new renewable energy sources that can substitute for fossil fuels are very urgent. According to Choi (2008) energy recovery from wastes is being internationally recognized as a reliable method to reduce greenhouse gases which have negative influence to climate. Research question and objectives Research question:

What kinds of innovation technologies are practiced in greenhouse production in worldwide and does an implementing innovation technology facilitate profit maximization of greenhouse farming in Uzbekistan. Objectives: oReview and study modern cost efficient production strategies implemented in the world oIdentify current production experiences and techniques of local greenhouse businesses oCompare and contrast current production techniques of local businesses with foreign businesses which operate in the same field oExplore and suggest effective production strategies for Uzbek greenhouse businesses

Methodology In order to meet objectives, the study will have several stages correspondingly with objectives. Both exploratory and descriptive research design are practical. As first and second objectives are to analyze production practices and strategies of developed foreign greenhouse businesses, these stages will be descriptive research since they will illustrate ongoing and already implemented practices of innovative businesses worldwide.

Third and fourth objectives involves exploratory research since they are put to explore relevant new issues such as identifying new effective means of production in greenhouse industry. Main part of the research will be conducted through reliable electronic sources, including online research articles, official company web-sites. The research methodology will be based on both qualitative and quantitative research tools. Due to time and budget limitations sample size limited to several numbers of stakeholders (farmers, supplier, foreign producers).

Thus, random sampling and non-probability convenience sampling will be applied. Semi-structured questionnaires, in-depth interviews will be conducted among twenty local farmer-producers and twenty representatives of foreign producers operating in greenhouse-agriculture industry. Interview respondents will be invited to share their experiences with regard to the nature, implementation, and monitoring of current business practices.

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