Statistics have shown that, all over the world, multinationals and larger firms have taken over the drive of innovation while SMEs (Small and Medium Enterprises) take the back seat.
This was not the case in recent past and this negative development begs the question, ‘why the change?’.
These statistics also show the reason for the decline in innovations from the SMEs. The GE Global Innovation Barometer, for instance, shows that regulations around privacy and data are stifling the innovation of these firms.
With the many uses of data being discovered daily, it is understandable how restriction to what has been nicknamed ‘the new oil’ would affect innovation, as data is indeed needed to spark and breed innovative ideas.
The multinationals and larger firms, having more means and networking tentacles, may be able to get access to a needed and larger net of data easier than these smaller firms.
Other reasons revealed by the Enterprise Research Centre, include a cut back by these SMEs on their Investment in new strategies, changes to business models and adoption of a short-term perspective, by these small firms, when it comes to innovativeness.
Innolytics also shared that while ideas and innovation managements are needed for innovation to thrive in SMEs, resources are lacking.
One of the challenges SMEs face is that of funding and labour, and this calls for the need to place a priority on everything. If the major idea is yet to get off the planning stage, innovation might be given a low priority scale.
Innovation is a good measure of the growth of a company and it is also a great predictor of how relevant the company would be in the future.
These reasons make it important for entrepreneurs and startups’ Founders and Co-Founders to figure out how to be ahead of the game with the phenomenon.
SMEs, firstly, need to realise that they operate on a different model and hence have a special path to tread when it comes to working innovatively. Where the big firms may have a special department focusing on being innovative, the SMEs need everyone in the firm to be innovative.
Investments, instead of being cut back, should be more laser-focused on areas which produce results which can be used to move the firm forward; areas like Research and Development and Marketing Strategies.
Another way to remain innovative is for the small firms to set it as a goal to discover the best way to do things in line with their business. These discoveries, however, should be customer-centric and marketable. This long term or eternal goal of the firm would make it a tradition as opposed to being a phase which dies at some point in the business.
Also, the business model on which a firm operates is what sets it apart from others. SMEs should use models specific to their values, aims and objectives. This would enable them to stand out and forge their unique path.
True innovation stems from authenticity.
The GE Barometer also revealed that 48% of Nigerian Executives believed that innovation helped boost business, whereas, for the rest of the world, only 40% of the executives thought so. This result comes despite the truth that we have the challenges of regulations, taxing and other setbacks other countries may not have.
Imagine if this percentage is increased for Nigeria.