Wilfred Mitchell: Innovation essential for survival of small businesses
The Federation of Small Businesses is the sponsor of the Excellence in Innovation category in the 2015 Belfast Telegraph Business Awards in association with British Airways. Wilfred Mitchell, policy chair of the FSB writes for the Business Telegraph
Innovation is often mistakenly considered to be another term for invention, and accordingly is regarded as only being applicable to companies in the digital or hi-tech industries.
However, the Federation of Small Businesses in Northern Ireland is keen to highlight that innovation is something that is integral to the survival and growth of all local small businesses.
Basically the term innovation refers to doing something new within a business, in a smarter, better or different way, that will make a positive difference. Often positive differences include increased turnover, business growth, competitive edges and more effectiveness.
While SMEs account for nearly 40% of all business research and development expenditure in Northern Ireland, there has been a relatively low level of participation of SMEs in European R&D funding.
According to figures published in October 2014, small businesses in Northern Ireland fall into last place in an international comparison and secure the penultimate, 11th place in a UK national comparison, only ahead of the south west of England.
This has consistently been the case for the last decade and demonstrates the potential for improvement if draw down of European funding can be increased through Horizon 2020.
However, Northern Ireland firms have the lowest level of innovation activity globally and this has consistently been the case for the last decade.
This is a particularly concerning problem as during a challenging global recession, the need for innovation within a region is all the greater in order that businesses are able to survive, stay ahead of their competitors, compete and grow.
Research conducted by the FSB on a UK-wide basis revealed that over half of small businesses (53%) resisted the worst of the hard-hitting recession by innovating and creating new products and services.
The FSB contributed to the recently published innovation strategy produced by the Department of Enterprise, Trade and Investment.
We will continue to monitor how it progresses against the vision of making Northern Ireland one of the UK's leading high growth, knowledge-based regions, which embraces creativity and innovation at all levels of society.
Small businesses in Northern Ireland clearly require increased support to further develop their capacity to innovate.
Innovation funding is a key area for development and a lead issue for the Northern Ireland Executive.
Additionally, there is an evident lack of awareness of the innovation and R&D opportunities and support available, especially small businesses. Many organisations may be aware that opportunities may exist but have no awareness of their own eligibility.
By opening up these opportunities to small businesses who have limited or no experience in the field of innovation, the FSB hopes to see an increase in the total number of local small businesses involved in innovative practices and thereby underline a shift in culture.
Recently, the Enterprise and Trade Minister, Arlene Foster MLA, emphasised that there was a need for a significant cultural change in how Northern Ireland views innovation across all sectors of the economy.
One such development in this recognition was establishing a number of innovation labs, which the FSB represented the voice of small business upon.
These labs provided valuable feedback to both the Enterprise and Finance Ministers on the extent to which red tape and regulation has an excessive impediment on innovation in Northern Ireland, and consequently hinders economic growth, trade and investment.
This year, the Federation of Small Businesses in Northern Ireland are delighted to be sponsoring the Innovation Category at the Belfast Telegraph Business Awards 2015.
As the largest business organisation in Northern Ireland, the FSB contends that small businesses are the primary innovators and job creators in the province.
Therefore we strongly encourage small businesses, especially our members, to apply for the awards and particularly hope that the innovation award this year serves to honour the hard work of the small businesses who innovate daily in their day to day businesses.
To enter the awards, please visit: http://www.belfasttelegraph.co.uk/business/news/business-awards/
Wilfred Mitchell is policy chair of the the Federation of Small Businesses in Northern Ireland