Irish SMEs, it appears, are the most innovative in Europe.
The European Commission has announced the results of its European Innovation Scoreboard for 2016, and Irish SMEs, it appears, are the most innovative in Europe.
Ireland was placed in the “Strong” category for innovation overall (the others being Leader, Moderate and Modest), but it was the Irish SME sector that stood out, coming first out of the EU’s 28 member states.
“Ireland is the leader for innovation in small and medium-sized companies (SMEs) – followed by Germany, Luxembourg, France, and Austria. These countries are characterised by high shares of SMEs involved in innovation activities: they introduce more innovative products and generate more new jobs in fast-growing young companies,” says the EC.
The annual scoreboard is designed to compare the performance of EU countries in the areas of innovation and research, and the 2016 scoreboard included a future-focused section on trends and expected changes for the first time.
Innovation is part of SME life
Mark Fielding, CEO of the Irish Small and Medium Enterprises Association, says innovation is a crucial part of the success of an SME, though this may not always take the form of R&D as it does with larger firms.
“We all know that the SME owner/manager is forever innovating, tinkering around in an incremental way in all areas of their business,” says Fielding. “Unlike large companies, where innovation is usually found in the R&D activity, with an SME innovation usually takes place in activities connected to the production line, such as the adaptation of outside technologies or the implementation of small technical improvements”.
Indeed, while small and medium-sized businesses may not have the R&D budgets of larger firms, that does not mean that they are not creative in their approach to business. “The SME owner is always looking for ways to improve their bottom line and trying out new ideas, whether it be in sales, product design, production processes or better purchasing,” says Fielding. “All these activities involve innovation, in one form or another”.
Going forward, more can be done to support Irish businesses in trying out new ideas and staying on top of the Commission’s scoreboard for next year, suggests Fielding.
“Small businesses can be fragile, so it’s important to have support mechanisms like venture capital programs to favour innovation financing, encourage patents to protect inventions, promoting strategic alliances as a means to empower small businesses regarding marketing and management.
“Finally, there should be governmental mechanisms to encourage innovation”, says Fielding.
Article by Peter Flanagan. Images from ISME and Shutterstock.