Diversity in STE A M www.diversityinsteam.com
any small- and medium- sized enterprises (SMEs) often view themselves as the competitors of big companies. However, it is not always a case of David versus Goliath - especially when it comes to innovation. Whether disruptive, incremental or transformative, innovation creates value for an enterprise no matter its size, because it turns existing problems into solutions that lead to improvement, growth and progress. What is noteworthy is that SMEs are sometimes head and shoulders above their larger and more seasoned competitors. SMEs have the advantage because most big companies tend to be slow innovators. As the laboratories of cu@ing-edge innovation and job creators, SMEs are the cornerstones of communities and lifeblood of the U.S. economy. They are nimble with faster concept- to-execution processes not encumbered by bureaucratic hurdles, and are not inclined to maintain the status quo. This is where the Goliaths can, but the Davids actually do. This is why an increasing number of big companies now hire or partner with smaller businesses to help develop products or accelerate the innovative process. It's part of the open innovation trend, where big corporations seek information and knowledge not only in-house, but also from external sources. In such cases, large irms acquire inventions or intellectual property or license technology from their smaller counterparts to bolster their existing business model. In turn, this helps SMEs to pivot, scale up and achieve further growth.
Why SMEs Need to Innovate More Than Ever
By Susan Au Allen, USPAACC National President & CEO
In the federal space, NASA, the Department of Defense, the National Institutes of Health and the Department of Energy are among the leading government agencies that have multimillion- dollar programs that continue to seek big ideas from SMEs through strategic partnerships and procurement of innovative products and services. Similarly, in the private sector, large companies obtain technology and expertise from their acquisitions. Case in point: Google. In recent years, the tech giants parent company, Alphabet, has acquired more than 200 smaller and specialized companies - largely to boost Googles key infrastructure and services in machine learning, automation, data collection and other areas where it needs further improvement. This leap-frog approach bypasses thousands of work hours and saves millions of dollars, as large companies would not have to develop new technologies from scratch. This is good news for innovative SMEs. Larger companies now look to small companies through a different lens: Not entirely as competitors, but as prospective partners in the development of new products, services and processes.
A Level Playing Field
Today, the advent of modern technology further evens the playing field, because it allows SMEs to conduct business from anywhere in the world - simply from a laptop and with little capital. Through a bevy of online tools to manage operations and inventory, SMEs can also effectively market their brand and tap a global audience of millions via social media. Indeed, technology should be at the core of every business operation today. For SMEs, technology creates a competitive advantage and has become the driving force behind better product designs, moreicientservice,increased productivity and eventually, profitability. SMEs in the traditional sectors (e.g., retail and low-tech manufacturing) should embark upon a combined approach that focuses on improving managerial skills supported by tech. This can boost innovation in small low-tech enterprises. Further, harnessing cloud computing capabilities save SMEs much-needed capital by eschewing the maintenance of on-site IT staff. Other SMEs tap the power of digital technology to apply data analytics in their accounting, data management, marketing and sales support systems. No doubt that choosing the right innovation can radically transform a companys growth trajectory going forward. The digital revolution has arrived and SMEs must embrace and adapt to new technology.
Collaboration Spurs Value Innovation
The adverse repercussions of the COVID-19 pandemic on SMEs have been felt across all industry sectors in the last couple of years, as the global crisis has disrupted supply chains, paralyzed operations and weakened or obliterated sales. On the upside, many SMEs were able to adapt and pivot to survive. Those that flourished used technology and other innovative processes to improve and add value to their products and service offerings. Meanwhile, governments, various agencies and academic institutions continue to support SMEs through capital infusion, training and other programs to stimulate innovation, build capacity, improve performance, increase competitiveness and assist in business expansion and growth. Larger companies are also doing their part in creating synergy and symbiosis by strengthening collaborations with SMEs in the innovation ecosystem. Without doubt, more opportunities exist today for both small and large businesses to thrive in a changed economy. As long as the business community - especially the SMEs - continues to innovate and stay vigilant, informed and agile, they will flourish for many years to come.