Innovation and The Small and Medium Enterprise

Innovation is the key! we all would have heard this statement many a times in our lives and must have tried our hands at it.

SME and the Growth: Role of the Government
The SME segment in India is a major contributing factor to the growth of the Indian economy. Creating an ecosystem that incubates and promotes innovation, requires policy intervention and funding by the government. For the growth to continue in a sustained manner, the Government has to create strong policies which support the growth of the SME ecosystem.

Cheaper - Quicker - Better: the Comparative Advantage!
One of the strongest winners for the SME is to deliver “cheaper, quicker, better”. Any SME, with a strong comparative advantage in any of these will sure be on the path to being a sure gainer. There are many examples to this thought: low-cost airlines and the mobile telecom sector have clearly demonstrated the advantages of being cheaper; “fast” food chains have built their businesses around “quicker”; many FMCG companies claim their success by being "better".

But Can SMEs thrive only on these three differentiators?
While there may be single companies building on one of these advantages, it is not really sustainable. There will always be a rapid convergence amongst all players in a marketplace on all three dimensions. It happens as the entire ecosystem evolves of which the small and emerging business is a part of.

What then is required for Sustainable Competitive Advantage?
Innovation!!  Innovating across your services, products, solutions and offerings can create powerful set of differentiating factors for your emerging business. In times today, continuous innovation is, the best way of ensuring on-going, long-term competitive advantage, especially in the knowledge and technology sectors. And as we are seeing almost every sector we know of today knowledge and technology becomes the integral part of the growth of any business, however small it may be.

Driving Innovation is sure an imperative in India
Innovation is an imperative and in a way a must to be accounted for emerging Indian businesses. Today as we are a billion strong, there are massive challenges at present and bound to increase in health, education, and food security. These are not small challenges, they cannot really be solved by conventional approaches; a small change will not really make a huge dent into these challenges; they need innovative and creative solutions that ensure radical change towards the better.

The Indian Advantage
Interestingly, in India, call it whatever you may, but we have the advantage of four key innovation-driving factors:

• democracy
• demography
• diversity
• adversity

But how can Indian SMEs really focus on Innovation with all the challenges?

Agreed, Indian SMEs have their own set of challenges. Our own experience with the SMEs has shown that: 

• Indian SMEs still struggle while raising finance, though it has become more accessible in the recent past
• The human resources created by the academia are not the best fit always
• Government policies are not always best suited

But as they say, if we win through odds, we create history, many SMEs have risen up while facing these challenges while innovating purely.

Eg:

One of the strongest product start-ups from India, Zoho, based out of Chennai is one such example, where the intelligent use of human resources has proven the critiques wrong.

Innovation is not a KRA, its a culture

Innovation is not really a departmental approach to things within an organisation. Its not a KRA. Its not the task of a manager. Its ingrained in the culture. Its what an organisation creates as one of its pillars of strength and not only for the sake of it.

There is no fixed way/ model/ methodology in which you must drive innovation for maximum benefit. Its a cultural proposition which has to be custom built in the organisational value system and driven by passionate stakeholders.

A strong example could be the Google 20 percent time policy, wherein every employee at Google can spend 1 day every week, in doing things, which may not directly be related to his project. Here is one employee sharing his experience!

Innovation and taking India to the next level

Innovating across new business models, newer ways to be more productive, drive business and grow will ensure that more and more businesses from India emerge out to rise from being Small to large scale enterprises which are global in nature.

Be there at The SME Conference 2011 to know how to play in a globalized economy!