Innovation. It’s a lovely word: full of hope, promise, and sparkle.
For the average SME today, I’d argue that it’s also a relatively intangible concept. After all, innovation – genuine innovation – can be tough to achieve. Being different, being one step ahead of the rest can be time consuming, expensive and, in an increasingly global market, hard to benchmark.
But wait – isn’t this blog meant to be about thinking bigger, not smaller? Indeed it is.
That’s why I think it’s so incredibly important that organisations like the Technology Strategy Board (TSB) continue to help UK innovation flourish with the support and financial rewards needed to motivate genuinely new ways of thinking. Just a few days ago, the TSB outlined some of the prize funding available as part of its £250m competition programme aimed at stimulating and funding UK innovators.
If you haven’t seen that announcement, allow me to recap. From now until March 2013, the TSB will be investing a quarter of a billion pounds into UK innovation, broken down into 12 key areas, five of which focus on tackling “global challenges”.
Those five global challenges account for much of the prize funding on offer, with current proposals from the TSB suggesting that as much as £65.7m will be available to innovators in healthcare, £37.5m for those redefining the built environment, £26m in the energy field, and a not inconsiderable £23.5m and £10m respectively for innovators in transport and food.
Why is this so important to small and medium-sized businesses? Principally because at the same time that the TSB is putting such financial clout behind promoting innovation, it is also doubling the funding for Smart – the organisation’s SME focused innovation initiative.
To be clear, we’re not talking loose change here. The TSB is putting a further £20m into Smart, taking the total available funding to £40m for 2012 / 2013. The reason? The scheme, launched in April last year, was so oversubscribed that the TSB immediately saw the opportunity to extend it. That is a fantastic result – that so many SMEs are actively pursuing innovation is testament to the big thinking, entrepreneurial spirit of the UK.
But the good news doesn’t stop there – the TSB also has a target to double the amount of funding for Eurostars (a programme that helps SMEs work with European partners) to £6m per annum too. This will help UK-based businesses get access to partners, distributors and mentors on the continent.
What really brings this home for me is the nature of the businesses that benefit from Smart. 70% of grant recipients are ‘micro companies’, fewer than 10 employees in size. And more than 50% have been going for less than five years. In my previous post, I focused on the importance of finance for fast growth businesses, particularly around alternatives to loans. Smart is one such alternative, and an increasingly well funded possibility when many other doors are closing.
All positive stuff, and perhaps especially so when we consider some statistics around innovation and growth. Our own research – The SME Growth Imperative – highlights the fundamental importance of innovation to small and medium-sized business growth. Amongst SME owners, innovation is seen as the second biggest stimulus for fast growth, with some 56% suggesting so.
With that in mind, the fact that more than half (57%) believe that they’re strong in innovation is vital. That more than two thirds (67%) of ‘accelerator’ companies – those growing faster than their small and medium-sized peers – say they’re hot at innovation is more promising still.
When unveiling the new funding for the TSB, Vince Cable stated his belief that “innovation is a key part of our plan for growth.”
To my eyes, and no matter what your political allegiance, that’s something that every SME should agree with.