Innovation in the SME sector: A planning approach

The globalisation of markets for companies in the SME sector is placing increasing demands on SME manufacturing companies. Part of the response to these pressures lies in a focus on research and development and innovation in processes and products. However, many of the approaches to planned and structured R&D and innovation have eluded owner managers. In many cases, there is a perception that R&D lies in the realms of the large organization with dedicated laboratories and staff, despite the fact that many entrepreneurial SME companies develop new products in response to market opportunities. Likewise, owner managers frequently respond to stimuli from the competitive market environment by developments in process innovation. This paper reports on a project, which involved 20 SME sector companies in Northern Metropolitan Melbourne. Fifteen of these companies proceeded to develop R&D and Innovation Plans to assist their businesses to retain and improve their competitive position. Policy issues surfaced in the course of the project relating to government schemes designed to foster and encourage research and development and innovation and the paper explores these issues