The New Innovation Frontier
In Australia, Small to Medium Enterprises (SME’s) are by far the largest employer. They contribute more than half our national GDP and make up 99.8 per cent of all Australian businesses. However, ABS data indicates that small businesses are less likely to engage in innovative activity than larger businesses.
Small to Medium business enterprises can be everything from an emerging technology-based startup or scaleups with high-growth potential all the way through to time-tested multi-generational businesses needing to modernise and embrace digital skills and solutions in order to stay competitive.
Small businesses already account for approximately 45% of private sector employment in Australia which is a staggeringly large proportion of the workforce. Additionally, it is estimated that SMEs account for approximately 57% of Australia’s GDP. Yet, unlike the big brands we know, little is known about these many unsung heroes, what they do, and the sometimes-vital role they play.
With global supply chain challenges, and the recent experiences of COVID, the importance of having key capabilities and goods produced locally in Australia has become not just a “nice to have” but a “have to have”. Self-reliance across a range of critical technologies ranging from medical equipment, basic food staples to defence technologies are already key to not just defending our interests but to ensuring our basic needs are met.
In addition, as large organisations across the world evolve into digital natives, adopt digital tools and various forms of automation, as a baseline for business resilience and robustness, a large sector of our essential small businesses are falling further behind in their ability to keep pace with emerging tech which can provide more productivity and efficiency for them.
Furthermore, small businesses are an important source of innovation in the economy, Samuel (2004) highlighted the role of small businesses in boosting competition through innovation and efficiency improvements, with small businesses having the capacity to respond to changes in the competitive environment with more agility than larger, more established competitors.
There are two innovation narratives which are at work here; one is innovation such as AI machine learning driving people out of work and one is innovation which is providing new work opportunities and new more agile and responsive business models for small to medium enterprise.
What are their business models?
The generational shift
