Innovation: A Necessity for Business Growth
The last 10 years have witnessed a boom in entrepreneurship which entails providing various products and services to improve the quality of life of their target audience. The high level of unemployment in the country (Nigeria) currently pegged at 14.2% also favours this booming sector in the economy. This has given rise to the number of Small and Medium Enterprises (SMEs) Nigeria currently boasts of.
Many schools of thoughts have given credence to entrepreneurship especially because of the pivotal role it plays in the economic growth and development of any society especially developing nations.
It is important to note that the nature of a developing country is by far different from that of a developed country, as the former is still in a transition stage hence immense economic opportunities abound. This is further enhanced by the fact that we live in a consumer society where individuals are constantly in need of various products and services to satisfy their insatiable wants.
With the current rise in entrepreneurship and SMEs, it has become imperative for business owners to possess attributes that can easily differentiate them from other products and services providers and that difference lies in innovation.
While innovation easily points to products and services, the first step towards innovation comes from within, by reviewing the entire business model and processes as this, in turn, affects the output of the business. To position a business for growth, entrepreneurs must ensure they have favourable internal policies and processes which are innovative and up-to-date to help position them for growth. Though innovation and improvement are often used in tandem, not all business improvements are innovative so entrepreneurs must keep this in mind.
The invaluable role creativity plans in innovation in SMEs cannot be overlooked. Arguably the most important critical success factor for entrepreneurs, creativity can help the growth prospect of any business with its aim of doing ordinary things in extraordinary ways. Creativity and innovation are sometimes used interchangeably but they both point to a keyword “imagination”.
A story is told of the Netherland prisons which had a problem of shortage of prison inmates and the high cost of maintenance of these prison facilities. By 2014, the Netherlands had closed down 27 prisons and this was also relating to loss of jobs for over 1,900 prison employees. To creatively solve this rather positive kind of problem, some of its prisons were rented out to Norway and Belgium and some others centres for asylum seekers. Yet there was still a high number of prisons left unused. To further utilize its structures, the authorities rented out some of the vacant spaces to offices, restaurants, homes and entertainment venues for prison escape games. Talk about creativity! Hence businesses should find novel ways of providing products and services that make a visible difference to consumers.
Asides introducing new products and services to ease business processes and strategies, SMEs can approach innovation by cultivating a sense of collaboration through their network. As the adage goes, your network is your net worth is applicable even amongst SMEs. Networking is very crucial for business growth thus keen attention should be paid to it. Networking entails a structured plan to get to know people who will do business with you or introduce you to those who will. And another way innovation can come about is when people come together. Brainstorming, knowledge sharing, pooling resources, broadening network culminating in collaboration, is an exponential growth and success factor for SMEs. This is further buttressed by research which has shown that the most innovative small companies are those who establish and harness external relationships.
While the above-listed factors may be crucial in adding innovation thus growth amongst SMEs it is important for entrepreneurs and businesses to monitor and evaluate the various actions they have taken in bringing about growth in their various businesses. This will help highlight models that have proved active and those that have been inactive, hence the importance of all innovative methods employed by entrepreneurs lies in their ability to measure the effectiveness of their actions and inactions.