Small Business: The Three Stages Of Innovation

Researchers agree that small businesses represent the lifeblood of the economy. They create jobs, launch products and invent business models. However, small businesses have weaknesses, too. They suffer from being fragile, particularly during the early stages of their growth. Consequently, creators of economic policy worldwide are interested in the processes of their formation, establishment and growth in order to improve their survivability. Variations in the innovativeness of these firms may help explain why some succeed, while many fail (Frambach, 1993). For Yap and Souder, crucial question is how small firms to remain innovative while face scarce resources and have little market influence. The answer, while obfuscated by a relative paucity

In his definition, “something new” is introduction of novel product or service, improvement or modification of existing one. Slow moving business environment cannot result in innovation. Innovation is dynamic process performed by organizations successfully involved in management of internal and external, driving or impeding factors (Tiwari and Buse, 2007). The three stages of the innovation process are the concept, the implementation and the marketing. The concept stage encompasses idea generation, idea evaluation and project planning. The implementation entails design, prototyping and testing, while the marketing stage is made of initial production, market roll out and market penetration (Fabian and Schmidli, 2005). Consequently, the research and development department is fundamental actor of the process. However, it is far to be the sole “culprit” for it, since successful innovation requires coordinated efforts of all parts of a company, particularly if it is of small or medium

Internationalization is great opportunity for higher profits. However, the small business cannot adequately capitalize on it. The reason is their lack of innovativeness capacity (Barriers to innovation in SMEs, 2011). In the European Commission Annual Report on SMEs in European Area 2012-2013, the identified barriers to innovativeness are grouped as internal and external. Others locate the major barriers among the financial aspects of the innovation process: limited external financing, high costs of the research and development and the high economic risk related with the market rollout of the innovative products. However, the question of innovativeness is not entirely a domain of the businesses. With the government at all levels and with research institutions in a country, they create the triple helix model, originally defined by Etzkowitz in 1993 (Rangaa and Etzkowitz, 2013). The management of the innovation lifecycle on the level of the economy and the society is set of coordinated and coherent strategic and tactical decisions of all three parties of the triple helix on how to plan, organize, lead and control the innovation process. We still have little understanding of the overall challenges that small firms have in the domain of knowledge resourcing and how they address those challenges, stress researches (Ericsson and al., 2000, Sapienza at