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Mountain View, CA - New research shows that innovation will be essential for small businesses over the next decade as they try to thrive and survive by seizing new opportunities, improving their competitive position and providing more value to their customers.
Trends in Small Business- 4/6/2009
The findings appear in the latest Intuit Future of Small Business Report, sponsored by Intuit Inc. and written by Emergent Research. It focuses on the key factors that drive, enable, amplify and shape the outcome of innovation, and the six characteristics of innovative companies. The report is part of the ongoing Intuit Future of Small Business series, conducted by Emergent Research and the Institute for the Future.
Compared to large corporations, small businesses have a number of innovation advantages that enable them to more readily identify opportunities, quickly react to changing conditions and remain competitive. Their smaller size makes it easier and cheaper to try new approaches faster than larger businesses. These six enablers include:
Market-sustaining innovation describes the ongoing refinements, or incremental innovation, in products and processes that most businesses regularly churn out to improve productivity and financial performance, increase customer satisfaction and save time. It includes about 80% of a firm's innovation efforts, driven by an opportunity to make something better, not create something new. This type of fine-tuning may be as simple as offering a customer the chance to lease a product or service, rather than purchasing it outright. While not widely visible, it creates a new playing field that keeps small businesses competitive.
In contrast, market-changing innovation occurs on both large and small scales, and represents fundamental product, technology or business model changes that shift the competitive landscape of an industry. eBay is a classic example of a breakthrough company that changed a market by disrupting traditional retail systems. While rare, these innovations are highly visible and industry changing, essentially rewriting industry rules.
"Innovation is in small business DNA. Yet, many entrepreneurs don't realize that some of the great offerings and processes they create are innovations," says Steve King, partner at Emergent Research. "Small businesses are the foundation of the economy, and they need to continually embrace new ideas and have the courage to pursue them to survive and thrive in any economic climate." To read the full report, click here.