MGT 3180- ENTERPRISE AND SMALL BUSINESS
TOPIC: What do you understand by innovation in a small business context? What factors contribute to successful innovation in small firms?
NAME: MOHAMMAD ALI AKHTAR
MISIS: M00338953
TUTOR: MR. DOUG YOUNG
WORD COUNT: 1925
INTRODUCTION
“Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you’re flying high at first, but it won’t take long before you feel the impact”, Barack Obama. These words by Mr. Obama show the importance of innovation. Through this essay we are going to cover the relationship between small business and innovation after which we shall throw light on the importance of innovation in the business sector and the different factors that add up to successful innovation in small firms but before we do that let us individually look at what a small business is and what is innovation.
As pointed out in the Bolton Committee Report (1971), a small business is an independently owned organization that has a low/small market share. It is a ‘single separate entity’ which means that the owner has the freedom in decision making and has no pressure of external control and the style of management is often more personalized. Small businesses employ very limited people and have a turnover of less than or equal to €10m. Innovation is the specific instrument of entrepreneurship, the act that rewards the resources with a new competence to generate wealth.
Innovation is a firms most potent and explicit advantage over their competition (John Palmer, 2011). It is very evident that in an open market environment like that of a small business sector, the competition is extremely intense and hence a company that lacks creativity will eventually be obsolete or outdated by market and changes. In order to survive in the vigorously dynamic market, a small firm should practice innovational activities. When innovation is...