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.  Through innovation many of these businesses can compete with their larger, better resourced competitors and not only in the areas of information technology and software.


If creativity is a good idea then innovation is putting that good idea to use.  Many commentators believe that innovation is 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.


Which brings us back to small businesses.  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.  The competitiveness of any business, but especially an SME depends crucially on the speed with which things can be done more efficiently, with which new products can be brought to the market place and how 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.


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