Too big to fail or too small to succeed?
Perception has a habit of getting in the way of good things – including the relationship between big and small business, says Cisco’s Phil Smith
If you ask the person in the street whether they feel large business or small firms are more innovative you are bound to evoke a divided, even heated reaction.
There is a belief that by virtue of size smaller businesses are somehow more entrepreneurial, more agile and more forward thinking. This evokes an almost David and Goliath like perception; where big business is the enemy of the small and mid-sized business. But are the two really at loggerheads, or do the they work symbiotically with one another?
Are small businesses more innovative?
It is true that smaller businesses are often far more innovative – the UK tech start up scene is a key example. The re-purposed warehouses that surround London’s Silicon Roundabout are fit to bursting with inventive small companies, and this is echoed across the country in other key sites like Cambridge and the M4 corridor.
Such innovation is often born out of universities, where fresh minds are encouraged to challenge pre-conceived ideas with the help of funding and a fellow support group. Failing isn’t negative to the forward thinking small and growing business; after all if you fail fast you quickly learn what does, and doesn’t work.
Ultimately small businesses are blessed with the agility to respond to problems quickly and implement the solutions effectively and instantaneously. This is a common problem for large organisations since there are often too many bureaucratic blockers in place.
Small businesses often punch well above their weight in their respective fields since they often have very specific business objectives. They may not have the muscle of larger organisations but they’re incredibly quick on their feet.
This is supported by research from the CBI that has shown that 99% of UK economic activity is driven by small and mid-sized businesses. However every new start-up must get initial help from somewhere and such support (be it talent or financial terms) is crucial to innovation and small business success. This begs the question; where does this support come from?
The UK fosters a strong culture of innovation; for example there are procurement rules set by the government to make tendering for business more accessible to the SME segment.
If you compare the UK to France, where most government investment goes primarily to larger companies, it is clear that the UK is keen to encourage entrepreneurialism.
A lot of this support comes from larger organisations themselves, extended through mentoring schemes like the National Virtual Incubator and the recent British Innovation Gateway (BIG) Awards. Such schemes promote discovering and fostering new British talent like 2014 BIG Award winners uMotif; who are forward thinking developers of health self-management software.
Also, by working with big business, smaller companies are able to leapfrog the barriers to entry they may have previously faced allowing them to win new business previously unavailable to them.
Collaboration with big business is crucial not only to the success of the individual smaller business but also to the larger organisation as it encourages an innovative two way flow of ideas. Big business is not the enemy of small business; and it is through partnerships and support that both can succeed and drive forward economic growth.
Phil Smith is the CEO Cisco UK & Ireland and UK Technology Strategy Board chairman. www.cisco.com