SMEs innovation (Essay Sample)

1 Introduction Like any other innovation, small and medium-sized enterprises (SMEs) have advantages and disadvantages. Any innovation creates more employment opportunities and space to showcase one's skills on a different level; however, it also has its challenges as it's a new space, and a lot of investors tend not to risk in the new investment so much, hence limiting its pace of growth and the competitiveness in the market. This article highlights some of the challenges SMEs encounter in pursuit of flourishing in the market space and creating a difference in the economy of any country in the world. 1.1 Background For any business to remain relevant and attached to the market space, it needs to be creative and innovative to retain and be consistent in the market space. Innovation helps create new products and services, supports the latest products to penetrate the market, and maintains a competitive edge. However, SMEs, just like any innovation, face some challenges: Lack of enough financial resources: Most investors always want to invest in something that's been on the market for a while as it has a record of how it has been doing and serves them the security and guarantee of profit returns once they've invested in a product. Very few believe in the theory of starting from scratch and growing a new product, in this case, the SMEs; hence, this creates a massive challenge as money is a crucial factor to the success of any business. But what if the government and investors just took the risk and invested in the SMEs? The SMEs would take very little time to take off and find their way to the market space. Struggle for market access and reach: SMEs face the challenge of accessing and reaching the market since they need more finances to advertise their products. We all know for any new product to penetrate the market space, it needs a proper marketing strategy and heavy advertisements to create awareness among the public on how it works and its significance to the public and the market space at large. Still, how can all this be achieved if there are not enough funds to make this happen? Hence, we go back to the investors and the government to ask for the finances to make this happen. And last but not least: Lack of experienced personnel: For any business or innovation to succeed, it always requires workforce and skills; SMEs face a massive challenge as not many have the experience on how to go about it and what to do and not do as it's still a fresh product into the market, and requires that the few who are knowledgeable with it to help train and fill in other experts to help in areas such as the R&D, marketing, and business development. To ensure their success, SMEs require a lot of campaigns and sensitization to create awareness among the general public. 1.2 Problem statement Regardless of the importance of innovation, SMEs face different challenges in trying to overcome these barriers and achieve their complete innovative success. This article seeks to address the: 1 Critical challenges faced by SMEs. 2 Lessons learned from the failures of large corporations. 3 Ways to overcome these challenges and ensure the success of SMEs. To start with, the most common challenge faced by SMEs is the Limited access to financing: SMEs often struggle to access financial support from investors, local government, and banks as they are viewed as high risk due to their small size, limited track records, and less collateral in case they serve as security for the financers who may decide to invest or lend them money hence making it difficult for the SMEs to thrive better in the market and stabilize itself well. Also, the fact that SMEs need a better track record or sufficient financial documentation, for example, financial records, audited statements, or reliable financial projections, blocks them from acquiring financial support or loans from banks and investors. Also, limited investor awareness; SMEs also need help attracting investors and convincing an investor why they should invest on a small scale rather than investing in large and well-established ventures. As the challenges faced by the SMEs opt to be also a learning lesson from other large corporations' failures in the field of innovation, SMEs opt to be willing to adjust to new conditions and environments and be willing to take the risks of creating the product and put more effort, time and finances to ensure the success of it. Also, I need to adapt to patience and give time to the product to grow. Embracing change, staying nimble, and pivoting are part of the adaptability that helps entrepreneurs overcome obstacles, learn and innovate.   As a part of the solution to the SME sector to ensure success, these may be strategies that might work in its favour; Good leadership, just like any organization, business, government, or even family, requires a sober and visionary leader willing to take the people they are leading to the next level. SMEs also need to have excellent and innovative leaders who have the firm's best interest in their hearts. Alternative marketing strategy: SMEs opt to adopt and have other marketing strategies to counter the recent one in case it does not work in their favour. Marketing is a massive success for any business as it creates awareness and a positive impact on the product in the market, eliminating any negativity the customers may have towards a product. Partnerships: SMEs must attract partn...