Capital Marketing: Innovation In London’s Small Firms

A considerable body of literature has emerged in recent years that has documented the increasing importance of innovative practices in UK small firms. Much of this literature has developed in response to reports of under-performance by UK firms in innovative practices compared with its competitors. This paper asserts an inextricable link between innovation and entrepreneurship and marketing and seeks to generate a clearer picture of characteristics of both innovative owner-managers and businesses. Using a sample of 233 small and medium sized businesses in Greater London, original data is presented and innovation archetypes are developed. The typical innovative business owner is shown to be young to middle aged, risk taking and embracing of new technologies. The typical innovative business is shown to be young, in the start-up stage of business development and using current business and sales and marketing plans. An understanding of these archetypes and concerns regarding the measurement and understanding of innovation and small firms are discussed. LITERATURE REVIEW In recent years there has been an increasing interest in the role played by innovative practices in the small firm, due in no small part to the role of Government in exploring how to improve the country’s ability to innovate. The debate that has sprung up from this exploration has been fuelled by some key initiatives, including the Department of Trade and Industry’s (DTI) Innovation Review (2003). Innovation is of importance for small businesses in particular because it is clear that policy makers see an important link between innovation and business and economic growth (Burke, 2003). Its importance here is as a key element of both entrepreneurship and marketing as a source of product and process development, an outlet for creativity and a means of improving competitiveness and creativity. The term innovation is often used without clarity and it is this blurring of definition that contributes to the relative neglect of SMEs from innovation literature (Burke, 2003). The focus given to innovation by the UK Government, however, has gone some way to addressing this issue. The Innovation Review carried out by the DTI, defined innovation as;