3.1 Introduction

The most pressing problem for this generation of European SMEs is survival.

The most pressing problem for this generation of European SMEs is survival. In today’s hyper-competitive world in which new ideas are quickly adopted by the masses, in which intellectual property is becoming more and more difficult to protect, none of us can be complacent.

Change is continuous. Something that was new ‘then’, whenever ‘then’ was, is not ‘new’ now. To stay ahead entrepreneurs and businesses need to continuously observe, refresh, change – to innovate. Innovation is not a one-off. It has to be an ongoing process – and in today’s world ‘collaboration’ is driving more and more innovation.

Innovation has to become a frame of mind for European SME’s. The reality of competition for the EU’s business community is that over their shoulders are many, many ambitious, energetic people in other parts of the world who are literally and metaphorically hungry and prepared to get up earlier than most of us do. The way for the EU’s SMEs to survive and succeed is to look to new ways of doing things, to do them better and differently. The more open to innovation those who start and subsequently manage businesses the greater will be their chances, not just of surviving but ultimately of growing and creating employment. However, by not fully understanding what innovation means, not enough of our SMEs have been motivated enough to change their structures and practices and to invest in what is needed to retain their competitiveness. When the need to innovate is mentioned to SMEs many assume that this must mean that they have to commit to expensive research and development and that innovation is therefore beyond their capability. But in today’s world of rapid disruptive technological change, the most effective response from any agent in an economy, be it an entrepreneur, a government, or a university, is COLLABORATION; and because innovation doesn’t have to be a new technology or the application of new science and may take instead the form of introducing a new business model, the adoption of a new organisational structure or the use of new marketing tools, the pool of potential collaborators is much larger than many may have assumed.

m3-02Today’s successful innovators are not as they were once portrayed, ruthless lone wolves. Even that analogy was a misconception because wolves in reality act collaboratively, in packs. Prospective entrepreneurs who do not co-operate with others are much more likely to fail. The most common confession business support practitioners hear from entrepreneurs is that they felt isolated, risk-averse and were at their least effective when they acted alone. Their self-confidence was low and they had lost their sense of perspective. When people isolate themselves they are more likely to not see change coming and to struggle to adapt when it happens because for them the pace and extent of change is more likely to have been unexpected.

Lone wolves starve! Loneliness corrodes confidence, ambition and perspective

So lone drivers if they stay alone will become isolated; and repositories of ideas though they may be, in our complex world none of them will have all the skills, all the answers necessary to successfully secure and thereafter hold onto a profitable market.

m3-03Collaboration is the modern entrepreneur’s pragmatic response to competition. “Social media and technologies have put connectivity on steroids and made collaboration more integral to business than ever”. (Prof’s Ibarra and Hansen, INSEAD, Harvard Business Review Spring 2014). Recently this approach has been labelled ‘co-opetition’.

Business school literature is full of talk about collaboration and co-opetition. A recent Harvard Business Review dedicated to the concept of co-opetition opened by making the bold statement that as the world changes, the only constant is that you will never know with whom you will be working next. Your competitor this morning could be your collaborator this afternoon. “Businesses increasingly rely on internal collaboration as well as external partnerships to create and sustain their portfolio of products or services…….” (Harvard Business Review: OnPoint – ‘Collaboration That Works. Selected Articles from HBR’ Spring 2014)

The business world is full of new and exciting collaborations that would have been unthinkable just a few short years ago. The car manufacturing sector is replete with examples of joint ventures of convenience. Also the airline industry, the information technology sector and most notably in the creative industries. Ed Cartmill, President of Pixar and Disney Animation Studios has said that in his view the creative process that leads to innovation is widely misunderstood. Many people think that good ideas are rarer and more valuable than good people. He says that in his experience this is wrong. In filmmaking and other kinds of complex product development creativity isn’t the preserve of individual Michelangelo’s or Van Gogh’s but in practice involves a large number of people from different disciplines working together to solve many unforeseeable problems.

Further reading: Harvard Business Review: OnPoint – ‘Collaboration That Works. Selected Articles from HBR’ (Spring 2014) http://amzn.to/1QkpCTU

Video: Global Business Collaboration: Where Culture, Technology and Innovation Meet Dec 2, 2011 – Uploaded by LEFResearch LEF Research Fellow, Doug Neal, describes some of the main messages from the reporthttp://bit.ly/1MpuOzU [5m04s]

Video: In this deceptively casual talk, Charles Leadbeater weaves a tight argument that innovation isn’t just for professionals anymore. Passionate amateurs, using new tools, are creating products and paradigms that companies can’t. Charles Leadbeater, Innovation consultant: A researcher at the London think tank Demos, Charles Leadbeater was early to notice the rise of “amateur innovation” — great ideas from outside the traditional walls, from people who suddenly have the tools to collaborate, innovate and make their expertise known http://bit.ly/1MYNb4m [19m01s]