Key driver that will help us gain the competitive edge

Innovation doesn’t just mean invention. It’s crucial to all steps of the business journey, from start-up to identifying new routes to rewarding markets

by Barry McDonald

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It’s the key driver to sustained growth and the essential ingredient that feeds the success of businesses small and large. But innovation isn’t confined to inventions or the scientific field, it’s a necessary tool in all forms of business, products and services and it’s the nourishment which feeds the Scottish economy.

Innovation is also key at all steps of the business journey, from initial market research to delivery of a product or service and forward planning. Whether you’re developing a new product or improving an existing one, changing manufacturing methods or finding new routes to market, innovation has an invaluable role to play in helping businesses expand and stay one step ahead of the competition.

Jim Watson, Senior Director of Innovation and Enterprise at Scottish Enterprise says the majority of businesses recognise it as product and service development or creation, business model innovation and design. And, he argues, it’s a vital component to remain competitive. “If you look at the level of growth across the globe, it’s fairly static and you’re still seeing a decline in some markets,” he says. “The way you create a competitive advantage is through ideas but importantly, through bringing them to market. Innovation and creativity is going to be your differentiator. We’re never going to compete on price alone so how you differentiate yourself more than ever in a global market is going to be through your innovation.”

Through research from the European Commission, it’s been demonstrated that two-thirds of sustainable growth comes directly from innovation. “If you can innovate successfully and build it into the culture of your organisation, you’re going to outstrip your competitors and grow your business,” adds Watson. “That’s why innovation is so important.”

In the past 18 months Scottish Enterprise has advised and supported 1500 companies to embrace innovation for the first time and helped them on their journey to growth. From start-ups to established firms they are encouraged to think creatively and look at where they can create a competitive advantage in new and existing markets. Regardless of where a company is on its innovation journey, Scottish Enterprise can help with accessing new markets with products and services, and make business contacts that can further sales channels. “We help businesses from initial market research all the way through to product launch in new or existing markets.” Adds Watson: “Wherever you are on that journey the message from us is ‘come and talk to us’. It boils down to two things – advice and financial assistance.”

For large, more established companies, Scottish Enterprise provides its Open Innovation Programme which promotes the externalising of ideas rather than relying on internal innovation. Parallel to encouraging larger firms to seek innovation from external company sources, the programme encourages Scottish SMEs to bid for these contacts while supporting them to de-risk the projects through financial support and encouraging product and service development.

The need for public sector innovation is also vital. Watson continues: “The purchasing power of the public sector in Scotland is significant and the need for organisations like the NHS, with the challenges it faces, to innovate has never been greater. By driving more innovation from the public sector this opens up the opportunity for Scottish SMEs to bid for these contracts while making the public sector more efficient and effective. Completely new ways of doing things will be the order of the day. We are working closely with NHS Scotland and other public sector organisations to drive greater innovation through their organisations.”

Watson also talks about innovation being both fundamental and solution-based. While long-term scientific innovation is to be encouraged, he argues, some of the results may be years away.

“It is imperative that industry focuses on solution-based innovation. “We talk to businesses about their innovation needs over the next two or three years that solves a problem or creates a market. You’re identifying a revenue stream that’s going to start to hit their bottom line relatively quickly. And that’s what industry wants – it wants solutions.

“Take oil and gas as an example. The oil and gas industry needs to find ways to decommission quicker and cheaper so they need to find ways of radically improving their approach. That will require a change and we can encourage supply chain companies to start thinking about what these large oil and gas companies are going to need in the future.”

 Ultimately, innovation has to cut deep within the roots of a company to thrive. It’s not enough just to switch businesses on to the benefits of innovation, it’s something which needs to be driven right through the entire organisation.

“The way we do that is try to get them to move away from thinking about incremental changes to products and services and thinking about when the next generation of products and services is going to be required and what that’s going to look or feel like,” adds Jim Watson.

“So rather than look at small changes in your product or service, try and think about what it will look like in five years.”

Ideas and growth on Wider scale

Scottish Enterprise’s Wider Innovation team supports businesses that may not have worked with Scottish Enterprise in the past. “Some businesses may not know how to identify the support they need and ask for it, or be new to innovation, or have traditionally self-funded their own development projects,” says Claire Smith, Wider Innovation Specialist. “We’re here to support and guide them through the development process, be it through advice, specialist knowledge, introductions to relevant networks or through a small grant.

“We’re happy to work with businesses that are based on an innovation idea, or established businesses that need some assistance on quantifying their project and taking it to the next level.”

One firm that has benefited from such support is Glasgow-based property factoring business 91BC. Formed by friends Doug MacSween and Scott Ferguson, the company is bringing building management into the 21st century and has worked with Lynne Gorman, Business Gateway adviser.

“In a world of apps the opportunity exists for an industry innovator to initiate a shift towards fully digitised communications,” explains Scott.

“The working title of our application portal is BoxRoom. Once registered, a 91BC customer can use our web portal to report issues or request maintenance, view and approve proposals and costs, and check the schedule and status of jobs as they happen on the ground. Customers can also view their account and make secure payments and our contractors can make real-time progress updates and post updates via a mobile device. You can still phone us but we encourage all of our customers to engage with us digitally.”

Doug adds: “We wanted to create something real-time to allow customers to interact with us at their pace. No one likes waiting for action, especially people in the digital age. A modern factor should engage with their customers effectively and drive efficiency by embracing mobile web technology and applying it to the customer journey.”

Doug and Scott began working with the Scottish Enterprise Wider Innovation team last year when they needed help with the design aspect and the integration of our database, CRM, and payment systems into BoxRoom. They were directed to two separate funds, one of which was granted within two weeks and the other is currently processing. “We spent the first tranche of cash with a digital agency to implement some of the above,” says Doug. “After interviewing suppliers in Glasgow, Edinburgh, Dundee and Aberdeen we opted to go for a local agency called My Web Application, based in Glasgow. Without the direction we received from Scottish Enterprise we certainly could not have reached this stage so quickly.

“Our experience with Scottish Enterprise has been invaluable in our progress so far. I think the best part of this experience is that they continue to share our excitement.