Barriers to Innovation in SME -

1. Weak leadership

2. Less budget

3. Higher cost of development, ToT, hiring more competent people

4. Resistance from own team to change

5. Job Fear among old / aged workmen/staff

6. Lack of infrastructure

7. Low skilled manpower

Dear Dr. Mirna Leko-Šimić,

This article may be useful for this discussion.

Thank you

8 barriers to innovation and how to overcome them

Go to the profile of Be-novative

Be-novative

Apr 10, 2017

Achieve remarkable innovation breakthroughs by tapping into creativity throughout your organization.

We live in the Innovation Age, a time in which breakthroughs should be the new normal. Yet there is often a disconnect between the innovation potential of an organization and its ability to deliver breakthroughs. It’s a problem that can be solved through collective creativity.

We dive deeper into this in our free ebook here.

Organizations often misunderstand the essential role of creativity and collective action in producing breakthroughs. Linda Hill, author of the groundbreaking book Collective Genius, explains that “the unavoidable paradox at the heart of innovation is the need to unleash the talents of individuals and, in the end, to harness those talents in the form of a collective innovation that is useful to the organization.”

To infuse innovation and creativity throughout an organization, leaders must intentionally build the ability and willingness of people and teams to produce breakthrough outcomes. What choices can your organization make to accelerate collective creativity and achieve innovation breakthroughs?

1. Innovation Theatrics vs. Everyday Innovation

“Innovation theater” is business guru Steve Blank’s term for when companies invest resources into innovation without clear strategy. It’s easier to hype trends, spout buzzwords, and hold photo-ops than it is to do the hard work that innovation requires. Even if your organization is fired up about innovation, the first steps can be daunting.

Everyday innovation is the antidote to innovation theater. It happens when everyone feels continuously encouraged to contribute to innovation. Author Soren Kaplan recommends providing time and structure to support experimentation and creativity. Start simply with everyday innovation, such as by dedicating 20 minutes in weekly meetings to innovation sessions. Remember, you’re rewiring your culture. Have patience with your new structure and follow through consistently.

2. Uniformity vs. Creative Stimulation

Employees are often forced to innovate by top-down mandate, leading to reluctant, uninspired participation of questionable value. The tools for managing innovation can also hinder creativity by being either too simplistic or too process oriented. Without the right motivation and tools, the result will be uniform contributions to innovation.

To achieve innovation breakthroughs, organizations must stimulate creativity and manage innovation in equal measure. Make creativity one of the key skills you look for in potential employees. Use an innovation management tool that has features that enhance creativity. Provide a working environment and offer experiences that nurture people’s creative mindset.

3. The Myth of the Lone Genius vs. Collective Genius

The audacious lone genius is usually celebrated as the source of innovation. But, as innovation advisor Greg Satell put it, no one person “ever has all the pieces of the puzzle.” Thanks to our connected, information-rich world, we can unleash collective genius like never before.

The bigger and more diverse your innovation ecosystem is, the better you can achieve creative breakthroughs. No matter how brilliant your employees may be, don’t stop innovation at your doorstep. By using outside sources, Procter & Gamble has increased productivity, lowered costs, and doubled innovation success.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://medium.com/%40benovative/8-barriers-to-innovation-and-how-to-overcome-them-bb76215e2093&ved=2ahUKEwj93ouz-NHfAhVRJFAKHVuzCpgQFjAMegQIBBAB&usg=AOvVaw0p92rjp1QRIMvMZZ6IW6u4

But, that kind of restriction on the top of the innovation funnel impedes innovation success. The most valuable breakthrough ideas often come from the farthest corners of the organization.

To encourage change and engagement, build an inclusive innovation community with shared principles and responsibility. Appoint senior leaders as sponsors of organization-wide innovation efforts. Make it part of your organizational DNA to recognize, incentivize and reward innovation participants through a combination of gamification and perks.

5. Consequences vs. Safe Space

Pity the organization where people fear the consequences of suggesting change. Fear is an innovation killer. Try to produce innovation in a culture of fear and you’ll see the same result: the loudest or highest paid person’s idea will prevail, while others give up after failing to see their contributions valued.

Innovation culture must provide a safe space for new ideas to emerge without fear or consequence. Every contributor should feel secure enough to speak up and to experiment collectively. In this space, fellow contributors, not just supervisors, will share feedback on how to make a new idea more valuable and implementable. Safe and anonymous environments create conditions in which every person will be equally likely to contribute valuable ideas.

6. Incrementalism vs. Innovation Flow

Incrementalism is an organization’s inability to continuously and remarkably reinvent itself through innovation. It manifests in risk aversion, a resistance to change, inadequate feedback mechanisms, and cumbersome decision-making. Incrementalism is what happens when people falsely believe they must choose either efficiency or innovation, but not both.

When these principles are in place, the result is an efficient innovation flow that leads to breakthroughs. Discovered by psychologist Mihaly Csikszentmihalyi, flow is a state of activity in which a person’s efforts become more agile and nimble, and they and their organization operate at peak performance. To cultivate innovation flow, use both digital and in-person activities to inspire the high levels of creativity, experience, and engagement that lead to breakthroughs.

7. Not Invented Here vs. Collective Commitment

“Not Invented Here” is a restrictive mindset rooted in personal ego or group loyalty. This mindset lets people cling to a single individual’s idea as the only possible solution. It also leads people to reject an idea simply because it originated in a different team, department or division. Organizations that hinder the creative confluence of ideas in this way doom innovation to failure.

Collective commitment is a more successful innovation approach. It establishes that the worth of an idea is based only on its merits, not its source. Nor are ideas the end goal. Instead, people work together to strengthen and refine ideas, and collaborate toward successful implementation. Collective commitment values everyone’s contributions, creating a shared sense of purpose and achievement.

8. Inadequate Tools vs. Human-Centric Innovation Engine

Here’s the caveat: Your organization’s creative potential is dependent on the right tools. Your current tools may be familiar and comforting, but they’ll hinder innovation if they’re not designed to spark creativity. Surveys and idea boxes keep contributors from engaging with other people’s ideas. Sticky notes are hard to integrate into ongoing efforts that result in true innovation breakthroughs.

For collective creativity to be continuously engaging, pick technology-enhanced innovation tools that are a fit for the modern digital world. Look for software designed to stimulate people’s natural urge to create and invent.

Thank you Oluwaseun. I appretiate your comment very much.

You're most welcome ma.

(PDF) Barriers to innovation for SMEs: empirical evidence from Greece

https://www.researchgate.net › publication

Thanks Nirmala. This is very useful and comparable to Croatia.

Yes, my language Russian! As a rule, innovations arise in response to the challenges posed by economic development, the lack of demand for innovation due to the lack of financial resources of SMEs can also be a serious obstacle to their development

Sorry, I don't understand your language. Russian?

I agree wit you Larisa that financial resources can be a serious obstacle to 8nn9vativeness

There is no innovation without the desire to take risks.

Dear Friends and Colleagues of RG

In my country, the main barriers to innovation are high labor costs, high taxes and parapositive contributions under the public finance system.

Best wishes

When an individual sticks to old habits and refuses to be flexible and sensitive to alterations affecting human life day in day out, s/he loses innovativeness. This can be seen in a beautiful maxim stated by Voltaire, who states: " Our wretched species is so made that those who walk on the well-trodden path always throw stones at those who are showing a new road".

Barriers to Innovation in SME -

1. Weak leadership

2. Less budget

3. Higher cost of development, ToT, hiring more competent people

4. Resistance from own team to change

5. Job Fear among old / aged workmen/staff

6. Lack of infrastructure

7. Low skilled manpower

Technology adoption and willingness to accept changes....

Thank you Eyal, you are really helpful. Mirna

Dear Mirna

I recommend your attention to:

(1) the article Hennart (2007) that dispels myths about the dependencies between international operations and performance. It is a bit old, but works.

(2) the article Hockerts (2009) that suggests that smaller newcomers compete successfully with usage of sustainable values against incumbents. The examples of MaxPremiumBurgers against McDonald's or Cafe Nero against Starbucks in Europe fulfill the pattern I suppose. When you study-compare the both online and offline storytelling of the mentioned offers you can study innovation opportunities, not constraints only. Apart of it, they compete on meanings, not on technology. The non-technological meanings are more and more successful instrument of competition.

Literature

Hennart JF (2007) The Theoretical Rationale for a Multinationality-

Performance Relationship. Management International Review, vol. 47, 2007/3, pp. 423 – 452

Hockerts K., (2009) Greening Goliaths versus Emerging Davids – Theorizing about the Role of Incumbents and New Entrants in Sustainable Entrepreneurship, WORKING PAPER NO. 01-2009, CBS Center for Corporate Social Responsibility, CBS Working Paper Series, 1-44.

Regards

Richard Kleczek

Thank you Richard. Both sounds interesting. I will read them carefully. Mirna

You can be interested to the attached article.

Best regards,

Marco

Dear Marco Vivarelli , thank you very much.....

Yes, thank you Marco Vivarelli - a very interesting article.

I have modified the initial question: 'what are the barriers to innovation?' to

'what are the barriers to the development of research on innovations?'

My tentative answer: 'using inadequate categories and metaphors in research' is the intuitive barrier to the latter.

I observe in the literature two scientific innovations = suggested changes in both the subject of research and categories to be used as explanations.

1. from 'innovations are things/offers' to 'innovations are changes in the practices of users of the things/offers' (mainstream economics vs Social Practice Theory)

2. from 'the value of innovation is its exchange value' to 'the value of innovation is its value in use' (Nordic School).

3. from 'technology/utility/functional innovations' to 'innovations in meanings' (Verganti, Holt)

Another point is that the academic researchers rather don't cooperate with practitioners in the research on innovations. The former treat the latter as a source of data rather than as a partner in the whole research process.

Inability to try new methods, new approaches to doing things.

The most important barriers to innovation are high fiscal burden, often changing tax law and difficulties in finding financial resources for development purposes for business entities operating in the micro-enterprise formula. In addition, high labor costs and parapositive contributions to the social security system, etc.

Best wishes

Good contributions

Dear Mirna,

I am not too familiar to SMEs, but I worked on barriers to inattentiveness in Russian industrial companies for almost 15 years and I see three problems here:

1) Exports indeed lead to innovations, but only at the early stage of internationalization, when companies are just looking for foreign markets (see the first enclosed paper). As the share of exports increases, especially in exports of commodities, companies are loosing the impetus for innovations beyond incremental innovations aimed at cost reduction and better financial control on the incoming revenues .

2) The second problem is to use the existing potential of innovations for real innovative actions. Without the intensive pressure of stakeholders there is no impetus for innovations. I called this "The Ilya Muromets syndrome" and described it in the second enclosed paper.

3) Third, there is a rare combination of interrelated circumstances that forces industrial companies to innovate regularly -- the perceived rapid changes in dominant technologies, visible market opportunities and some subjective factors (see the third enclosed paper). After that paper I gave up the whole topic as the final solution was found and I moved to study other things.

Cordially,

Igor Gurkov

Thank you for the great contribution Igor Gurkov.

Dear Friends and Colleagues of RG,

In individual countries, the issue of barriers to innovation and entrepreneurship may look different. In some countries, the main barriers to innovation and entrepreneurship in the sector of small and medium-sized business entities include financial barriers, ie high tax and tax-related charges, high labor costs and social security contributions paid by the employer, high loan costs and limited offer of external financial instruments financing of financial institutions on offer, i.e. primarily commercial banks, which, apart from loans and loans, offer a limited range of financial instruments for external financing for enterprises in the SME sector. In addition to financial barriers, there are administrative barriers in some countries, ie complicated business start-up procedures, barriers related to poorly developed communication, media, logistics, etc. Sometimes there may be barriers related to the highly monopolized market structure and lobbying of large corporations its dominant market for the sale of a specific range of products and services limits the development opportunities of small businesses.

Best wishes

Interesting

An almost insurmountable barrier: institutional climate contrary to the entrepreneur, excess of laws that tie him.

Great and very interesting contribution, Igor Gurkov. Thank you.

Dear,

Barriers are varies country to country and even industry to industry. i think credit constraints is main barrier in innovation in globe.

Dear Sana,

Thanks for your answer. Can you give example of different barriers in different industries?

@ Mirna

Please check the link

https://www.researchgate.net/publication/37592000_Barriers_to_Innovation_in_SMEs_Can_the_Internationalization_of_RD_Mitigate_their_Effects

Excellent article. Thank you Nirmala.

Dear Colleagues and Friends from RG, Research shows that the sector of small and medium-sized enterprises, especially micro-enterprises in my country, the biggest barrier to the development of entrepreneurship and innovation are high tax and para-tax (contributions to the social insurance system) burden on running a business. In some countries, contributions to the social security system are voluntary, very good, low and paid taxes only when the company generates income and it is a very good solution. Unfortunately, in some other countries these charges are high, mandatory and paid regardless of whether the company makes a profit or not. Such a solution severely limits the development of entrepreneurship and innovation. Such imperfect tax and para-tax systems should be improved to activate entrepreneurship and innovation. In order to improve economic growth, activating entrepreneurship and innovation is essential. The effects of activating the development of entrepreneurship and innovation are one of the key factors of the effectiveness of socio-economic policy.

Best wishes

Dariusz Prokopowicz

A lot

Characteristics of the entrepreneurial

Social

Education

Economical

Law

Key obstacles to innovation are so many such as lack of a shared vision, purpose and/or strategy, management incentives are not structured to reward innovation, lack of funding and support either financially or socially or even politically.

Thanks for sharing your thoughts Hassan Sarsak.

I enjoyed reading and following the response posted by Ryszard Kleczek . I do agree with such excellent insight presented.

I did too.

Mirna Leko-Šimić

Mangerial bandwidth or slack as Edith Penrose would call it.

Innovation needs to have its motivation constantly renewed, under pain of dying, to become bureaucratic.

Following

Dear Colleagues and Friends from RG, There are already many sources of financing for innovative new business ventures in many developed countries. Currently limited access to capital is no longer the main factor limiting innovation. In my opinion, in many developed countries, the main barriers to innovation are the financial barriers of the fiscal and parafiscal system, i.e. high tax burdens and in some countries also high contributions to the social security system. In addition, institutional barriers, system restrictions, bureaucratic, too extensive legal norms for business operations, too complex patent procedures, underdeveloped business information systems as part of institutional agency of the state in establishing business cooperation between business partners, etc.

Best wishes.

Dariusz Prokopowicz