ADVOCATE COLUMN 2nd WEEK MARCH 2014
Many commentators believe that innovation will be the key to New Zealand business success. It is about developing the new idea; the new product, the new approach, the new system, the new technology that allows something to be done that couldn’t be done before, or to be done in a new way which greatly reduces the cost of doing it.
Small and medium enterprises employ 20 people or less but make up 95 per cent of registered businesses and are responsible for about 50 percent of New Zealand jobs. They are often referred to as the engines of economic growth and they make up 95 per cent of registered businesses in New Zealand. Furthermore there are instances where their size and flexibility allows them advantages over larger firms. They provide the channels along which new products and services can be developed. In sectors such as biotechnology and information technology, software development, and innovative light by volume or weight manufacturing, relatively small but innovative businesses can develop and become key suppliers of new products and services.
So if innovation is seen as the key to the success of New Zealand Inc and if 95% of New Zealand businesses are SMEs, then innovation should be front of mind to all New Zealand business and part of a standard behaviour for business. Unfortunately at the small and medium end of the business market while we may agree with the principle, “innovation is the key to success”, there is often little evidence of behaviour that challenges the traditional business as usual approach. This is a concern is we are to lift our overall productivity, compete in a global market or even in some cases compete within the domestic market. In this global environment, competitiveness of any business, but especially an SME depends crucially on the speed with which new products can be brought to the market place and new cost-saving improvements made.
It follows that every business should include innovation as a component of their firm’s business plan. If you do, you have a tool to apply innovation across all facets of the business – to access a ready market, to access capital, to hire skilled staff, to more efficiently use resources, and to locate where infrastructure can best support you. If innovation is an integral part of the business plan and culture, the business owner and their workforce can work together with an expectation that change is part of the environment.