In today’s environment, competitiveness at the global level vitally depends on the rate at which new products and services can be introduced to the marketplace and novel cost-saving enhancements created. Likewise, wealth creation and employment gains depend to a very large degree on the speed with which scientific and technological advances are transformed into useful and appealing solutions.
Innovation – the skill to derive the benefits of scientific accomplishment – involves much more than the capacity to transform a new idea into a useable product. Proficient movements of technology are insufficient – available resources of finance and of business skills are also required. There must also exist safeguards for intellectual property and ample inducements for entrepreneurial enterprise.
In essence, what is required is a vibrant, self-sustaining culture of innovation.
Small is robust
Vital to such a culture of novelty are the small and medium-sized businesses that have continually proven themselves to be the mechanisms of economic growth and the primary suppliers of new jobs.
Thus the need for small and medium businesses creative efforts is essential for our region to guarantee that these markets have a viable economic growth model.
Concurrently, this directly points to the requirement for SMBs themselves to introduce more innovation into their processes and procedures to enable their profitability, survival and competitiveness.
Unfortunately, the reality is that many regional SMBs have not made innovation a priority or even a part of their strategy. The general fallacy among most SMBs about innovation primarily concerns the introduction of new technologies or conducting extensive Research and Development projects, which entail large funds and hence, are excluded from their budgets.
But the reality is that they do not need to invest considerable funds in innovation.
The secret ingredient is smart-growth. This doesn’t mean that smart-growth solutions should raise income disparities or harm the environment. The inadequacies of regional SMBs can be ascribed to various factors, and among issues confronting them today is the disjointed market infrastructure, unsuitable marketing and branding practices, as well as insufficient and distributed logistics and IT infrastructure.
In today’s wired world, customer demands of organisations are elevated; they insist on being heard and want rapid results. To accommodate these pressures and make good decisions, organisations must sustain close contact with customers.
These inefficiencies indicate the need for SMB mergers either at an industry or at a core level. Relative to large corporations, SMBs enjoy more litheness and novelty advantages. Their size, ability to exploit new technologies, intimate relationship with customers, rapid adaptability to evolving market environments and robust social networks can be key enablers of innovation. What is most significant though, is cognisance.
An SMB can capitalise on these advantages only when it believes in being a pacesetter. This new orientation requires efficient operations and clarity in communications, in essence a change from business as usual.
For successful SMB integration at business-to-business and business-to-consumer levels, the employment of advanced technologies like cloud computing can play a vital role. Here, the customer pays only for the services used, e.g. a set of shared computing resources accessed via the Internet. Cloud computing is economical as customers can avoid expenditure on hardware and software and can host many applications. Resource allocations can be tailored according to specific customer needs.
Our regional SMBs need a technology infrastructure that is combined with a comprehensive business plan to become a successful sustainable business model.
Marketing is one of the hardest aspects of any business, and particularly for SMBs; this is the area where most are lacking. Resource limitations are repeatedly cited as the principal cause. However, another challenge exists in the blinkered way marketing is conducted by these businesses.
Although SMBs do some type of marketing, their notions are generally too basic and markedly dissimilar from that recommended by academics, consultants and/or embraced by large firms. Thus, most SMBs’ marketing approach is loose and amorphous and this normally leads to arbitrary decision-making.
What SMBs should look to capitalise on is their supposed weaknesses. For example, substantial flexibility could be obtained from their informal organisational structure. This would make their decision-making process more effective.
Moreover, the knee-jerk nature of their marketing style helps them to respond rapidly to existing opportunities and events for example, via the use of social marketing tools like Facebook, Google+, Pinterest, etc. Frequently, these are vital elements for SMBs to galvanise their marketing in a simple, yet economical, way.
Governments also play a key role in facilitating innovation in small and medium-sized businesses. Incentives and support for the creation of new enterprises and offshoots from research institutions and large companies, as well as the elimination of barriers to their rapid growth and backing for the transfer of knowledge, also merit accordance of the highest priority.
In summary, what is required is an energetic, self-supporting culture of innovation fuelled by SMBs, governments and other stakeholders. This will allow SMBs to cope with the unabated rapid globalisation of product and service markets wherein they face mounting rivalry not just for sales, but also for technical expertise and talents.
For more information
Gregg Anderson, MBA, CMC
MD, VisionQuest Management Services Ltd
E: [email protected]