Member Article

Why small businesses are key to innovation

Innovation is about seeing something new and believing that something will succeed, then making it happen. These components more naturally occur in small and medium sized businesses rather than in multinational corporations. This is why many, big companies cannot execute game changing innovation as well as small companies and this will become more and more apparent over the next few years. In my view the innovation systems that many big companies have created are caught up in process and are now too slow. They don’t admit it publicly because they can’t; it would be an admission of incompetence. Small companies have the edge; they can innovate quickly and efficiently implement and execute ideas. Big companies now, always end up defaulting to small innovative companies for the game changing innovation. This is why I think now is such a great opportunity for small smart and innovative companies.

I could quote a number of senior R&D executives, in different sectors who don’t believe in their own processes because they have too many people, too much information and not enough belief. They depend on smaller dynamic companies and innovative insightful people outside of their own structures. We were recently approached by a large company who were desperate to quickly target and acquire new innovative companies as opposed to rely on their internal research and development processes.

Along side acquisitions, multinationals have for a while now, proclaimed open innovation as a legitimate tool, collaboration for mutual benefit. In my opinion it was designed by big companies to relieve smaller companies of their smart ideas and technology. Granted the potential benefits to smaller companies on offer include the global reach of multinationals but the journey to realise the benefits for a small company can be long, expensive and painful, still the potential relationships are tempting.

Probably the most famous recent example of an individual who resisted the big boys is Mark Zuckerberg at Facebook, Microsoft had to pay $286 in exchange for 1.3% of Facebook valuing the company at $15billion. Facebook, now obviously one of the biggest corporations on the planet is of course the most famous and effective real time consumer data analytics firm, leading a huge revolution in the business intelligence sector as it was known. Such a massive entity from such a small initial social insight in such a short space of time.

Innovation is an imperative today for us all but being smart and agile is the key to discovering the early insights, establishing what problems need to be solved, finding the unmet needs, investigating the solutions and working out how they can they be designed and implemented. The new ecosystem of innovation puts small and medium sized businesses in the driving seat for the future.

My work is about helping companies do that. I work as an innovation scout www.innovationsout.co.uk twitter @theiscout tel 07714294242 and as an associate director for wood holmes, www.woodholmes.co.uk the innovation company.

This was posted in Bdaily's Members' News section by Nick Devitt .