Partner Article

NPD Ideas are hard to find, not funding

We constantly hear politicians and business leaders in Europe and the UK talk about SMEs leading us towards a brighter future. So pressure on manufacturing SMEs not just to survive, but to innovate and create value and jobs, in a very difficult financial climate, is unprecedented. But studies show that only a small percentage of SMEs are actually involved in the R&D necessary for NPD (New Product Development).

The good news is that if you know where to find it, there is plenty of financial help for SMEs who want to develop new products. But my experience suggests that lack of funding isn’t the only thing stopping innovation. NPD becomes high risk if you’re not sure your ideas will work in the market, you don’t have the knowledge to explore opportunities, the commercial relationships to take the product to market or access to relevant technology expertise to effectively create the new products.

Saying that, most SMEs are still keen to innovate and create new and better products. What they need is the right human capital and resources to come up with something worth investing in, a process to develop ideas and concepts and an assurance they will get a reasonable return of their investment if they put time and money into R&D.

So for SMEs going it alone NPD is very risky; first question is do they have a properly identified market need for which a NPD programme is worth investing in? And then how do you realistically plan the process, identify the skills, resources and experience and hence calculate the cost of research?

The next stages are even harder to work out – for example how will any prototype be tested, what does the supply chain look like and how can the product be marketed? Innovation in the manufacturing sector is particularly complex and the complexity of the issues often prevents an SME getting to the stage of even actually examining its capabilities.

Sometimes an SME will approach their local university. They may have heard that universities are becoming more business focused, and they are often keen to secure as much industrial funding as possible with government research grants drying up.

However, most universities specialise in research and not the development of real world innovations and if your local university does not know a lot about the technology you need or the market you operate in, then this won’t be a marriage made in heaven.

Even if you’re lucky and your local university can contribute, then how do you build the network of organisations you need to bring a product to market? It is clear to me that most successful new products result from collaboration and input from a diverse group of organisations, all of whom have something specific to offer.

Certainly universities often form part of a successful collaborative group, but they tend not to be sufficiently commercially focused to deliver much beyond the laboratory so you’ll need other organisations to be involved to get a product that is market ready.

Regardless of generous funding options on offer, right now I do not believe that SMEs have been offered a clear way forward. What is sorely lacking is advice and guidance about where to go to develop ideas and test markets.

So what advice would I give to an SME that wants to innovate their way to a successful and profitable future? There is no easy answer, other than to discuss their plans and ambitions with people and organisations who have done it many, many times before and know their way around the pitfalls.

It is only really experienced NPD specialists who will help you find out where your efforts should be concentrated, extract valuable IP and focus what to build on and more importantly when to stop chasing non-commercial red herrings. In addition they will bring a multitude of contacts and are going to be able to put you in touch with a variety of organisations who can help you move forward.

At Pera Technology we’ve specialised in working with SMEs, particularly in the manufacturing sector, and helping them with all kinds of NPD. I always stress that it’s a rigorous and intensive process. We always start or Conceiving of appropriate ideas with a State of the Art review looking at the IP landscape, existing products and services and the market from all sides. We have our own innovation specialists, experienced intelligence services and in-house scientists.

We also have an extensive contracted network of over 10,000 specialists, experienced in their specific technologies willing and able to work on the Creation of the SME’s NPD in commercial confidence and in full knowledge of the importance of getting it to market. Finally we assist in commercialising the new product through our links into global end users and private finance providers.

So I believe SMEs in manufacturing need to work with organisations like ours to organise collaborative research, something they could never do alone. The advantage of working with NPD professionals is the the entire process is de-risked and no funding opportunities missed, so the SME can concentrate on creating new products and processes.

This was posted in Bdaily's Members' News section by Dr Mark Wareing .