Openness to innovation the clearest indicator of success for British SMEs
A new study, commissioned by business bank, Allica Bank, shows that an SME’s attitude and approach to innovation is the clearest indicator of whether that business will be successful.
As such, the Bank is urging all businesses to be open to improving their products and services, as the British economy works to recover post-COVID.
The study analysed data from over 1,000 companies and ranked their success on a scale that evaluated factors including productivity, growth, consistency and outlook. To measure SMEs’ focus on innovation, survey respondents were asked about how often their business considers the ways in which new technologies can improve its products and processes.
A focus on innovation is a common characteristic among the most successful SMEs with more than three quarters (76%) of the UK’s top performing businesses – those in the top tenth percentile – indicating that they continually (39%) or often (37%) consider ways in which technology can be used to improve products or processes. This compares to just 51% of businesses that rank outside of the top bracket.
Meanwhile, only four out of ten (40%) of the SMEs with the lowest overall scores in the SME Performance Index often or continually consider ways in which new technologies can improve their products or processes.
The study also highlighted that there is tremendous room for improvement among all SMEs, with less than three out of ten (27%) continually on the look-out for product and / or process enhancing technologies, while more than one in eight (13%) either rarely (10%) or never (3%) consider ways in which new technologies can improve their products or processes.
Chris Weller, Chief Commercial Officer, Allica Bank, said: “Every business in the UK has the capacity for innovation and the first step for many is to reframe how they understand the concept: innovation is improvement. You don’t need a team of software developers or lab technicians to be innovative. Some of the best innovations come from simply reimagining your existing products or services, or finding new markets to sell them in.
“As damaging and disruptive as it has been, COVID-19 provided a catalyst for a lot of businesses to innovate and re-evaluate their products and services. We’ve already seen many impressive examples of this during the pandemic, such as restaurants creating home delivery services from scratch and manufacturers overhauling their setups to make PPE on a large scale.
“Looking forward, we urge all small businesses to take a step back and carve out some time to deliberately think about how their business can further innovate and improve; whether that’s through using new technology, adapting your products, or changing processes. At the same time, ask yourself when you last innovated and assess what innovation could really look like in your sector.”
Allica Bank's SME Guide to Success identified six 'rules to success' that were more likely to be displayed by top-performing SMEs compared to their counterparts. The full report contains a wealth of additional data and insight into each of these topics.