Enabling Small Business Innovation


On Tuesday, I participated in a workshop sponsored by Intuit and Emergent Research, on the latest addition to their “Future of Small Business” series, Defining Small Business Innovation.  The report authors, Steve King and Carolyn Ockels of Emergent Research, define innovation more broadly than many policymakers and academics.  To them, more small businesses are innovators than even the owners might admit to.  When they interviewed small business owners, many of them said that they did not innovate, but then they went on to describe various tweaks and processes that they had come up with to improve their firm or to better compete.  Indeed, they were innovators (even if they did not know or want to admit it).

When you mention innovation, most people think of technology.  For that reason, much of the research in this area focuses on patents, but not all innovation can be quantifiably measured.  Steve King and Carolyn Ockels have set a harder task for themselves by defining innovative capacity more broadly.  From a researcher’s perspective, innovative tweaks, such as a service-level improvement or re-engineering business strategy to focus on a new niche, are harder to quantify than measuring tangible technological changes.  But, that does not diminish their importance.  Another challenge is changing people’s perceptions of what an innovation is.  As a result, policies that might encourage greater technological innovation are different than might be prescribed for a much broader definition. 

I look forward to reading future reports, some of which will stem out of the discussion today, on this topic from Intuit as part of their series.  Good job so far.

Chad Moutray

Chief Economist