Innovation and CSR: Two Drivers for SMEs Success
Innovation in a business context can be understood as the process which transforms new ideas into new values for customers. In the past, innovation was not considered a key aspect in companies’ strategy; as they focus all their efforts on providing products and services assuring its quality in order to maintain their position in the market. Nevertheless, enterprises’ activity will not be this way anymore. In the current context of globalisation and internationalisation, organisations need more than good quality products to differentiate from their competitors. Thus, innovation plays a key role to improve efficiency and effectiveness through new processes and management practices. On the other hand, consumers have also changed their consumption patterns, as they are more informed than before and have a wide range of products to choose. Additionally, innovation allows society to enhance their standards of living by offering new opportunities to improve their lives.
Despite what people might think about innovation, it does not all depend on financial resources. SMEs are pioneers on driving innovation for many reasons. First, they have a better knowledge of local resources and supply chain. Then, they are well aware of the needs and problems of the communities. Moreover, as they are smaller than big corporations, they can easily adapt to changes. Therefore, SMEs should leverage on all their advantages over big companies; in order to achieve a competitive advantage and contribute to a better society by driving innovation along the entire value chain [1].
In the World Bank Report (2009) [2], innovation has been viewed as a key factor of economic growth and development. Furthermore, innovation in SMEs has also been supported by the European Commission; through some programs such a Horizon 2020 [3], they help SMEs by direct financial support and indirect support to increase their innovation capacity. Another European program is Project Young SMEs, which promotes entrepreneurship and brand-new companies (see video below)
An opportunity for innovation that many SMEs are incorporating into their strategy is ecological and social sustainability. Moreover, social and ecological improvements are demonstrated to lead to economic sustainability, understood as profitable growth. According to the IMP³rove Assessment [4], when companies use sustainability as a drive for innovation, three aspects are generally considered: economic sustainability, production and manufacturing methods that are fully ecologically and socially sustainable, and application methods that are fully ecologically and socially sustainable. The first one assures the economic growth of the company. While, ecological sustainability refers to the respect to the environment and the maintenance of natural resources.
This way, SMEs which incorporate these three aspects of sustainability into their innovation strategy in a holistic way are proven to be more profitable. On one hand, businesses that improve their energy and material efficiency, could become more effective and reduce their costs. On the other hand, by promoting social sustainability, these organizations could also improve their reputation and its image with consumers.
Comments Off on Innovation and CSR: Two Drivers for SMEs Success /
19 Apr 2014
por
martagomezmanchon
IMSD /
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