Question:
Discuss about the Concept and Role of SME In Enterprises.
The important role as well as the impact of the small and medium sized enterprises has already been exhibited across the world. The SMEs signify an important part of the economies of both the established and the growing nations (Assink, 2006). They are vital segment and driver for many of the national economies (Christensen, Raynor & McDonald, 2015). When it comes to the emerging economies the SMEs usually account to over ninety percent of the organizations, and 60% of the employees are employed in this organization and they also account to 55% of the GDP in a country. Nonetheless, the growth of the SMEs particularly in emerging countries has slowed down for the last few years. Some of these companies are unable to transcend the barriers of the scale (King & Baatartogtokh, 2015). Improvement in the scalability, performance and the sustainability of the SMEs could help achieve an efficient marketing as well as the sales practices (Assink, 2006). In this research the company which has been chosen is MIUI 9. This company has been making various android programs. This application has a user interface based on the Android which has been loved by the users.
Disruptive innovation/ development
This refers to the term in the vast field of the business administration and it pertains as an innovation that generates new market and value coverage. The innovation could disrupt a market which is pre-existing and the value network. This results in displacing of the market that is definitely already established, products and the alliances (Cortez, 2014). The disruptive innovation tends to be produced by the outsiders as well as the entrepreneurs, rather than the existing market leading organizations. The disruptive innovation has become a powerful means when it comes to broadening as well as growing a whole new market and providing the new functionality, which often might disrupt the existing market linkages.
Entrepreneurial enterprise
This refers to an individual who organizes as well as controls any specific enterprise, especially a company, with a substantial initiative and risk (King & Baatartogtokh, 2015). This individual will have various skills such as self-awareness, passionate and also purposeful.
In this review it will clarify the concept of the SME, innovation and the disruptive innovation in details so as to identify the research gaps that will be addressed in the future.
SME
There has been consensus among the policy makers, economists as well as the enterprise professionals that the small and medium enterprises are the crucial drivers of the economic growth (Cortez, 2014). A healthy SME industry has contributed prominently to the economy via the creation of the employment possibilities, which could generate high volume of production, increase in the exports as well as introduction of innovation as well as entrepreneurship skills (Ruan, Hang & Wang, 2014). The dynamic role of the SME especially in the developing countries has insured them as the engine via which the growth objectives would be achieved (Christensen, Raynor & McDonald, 2015). According to the research done by UNIDO they have estimated that SMEs represent to over ninety percent of the private business which contribute to a lot more than 50% of the employment as well as the GDP in many of the growing countries . SMEs they have experienced a boost in the competition pressure which has been fueled by the globalization, laws, trade barriers, and an increase in the marketplace expansion due to the emerging technologies and the innovation. The SME are able to survive due to their adaptability and agility for instance their close proximity to the customers, openness towards new working ways and risk taking methods.
Innovation
Innovation has been regarded as the use of more desirable alternatives which satisfy the new requirements, unarticulated requirements or maybe the existing needs in the market. It is often achieved via more effective products, services, processes and even alternative technologies that exist to the market, society and the governments (Mahto, Belousova &Ahluwalia, 2017). Innovation can be referred to as something original and more effective as a consequence which can break into the market or perhaps a society (Wan, Williamson & Yin, 2015). When it comes to SME the objective of innovation is in optimizing of the research, development as well as innovation environment for the SMEs, which could include the establishment and the facilitation of the range of the support services (Wan, Williamson & Yin, 2015). The aim of MIUI 9 organization is to strengthen their innovation capability of this SME and be able to create value to the market or the society. Innovation in SME entails all actions which provides intermediated support to the SMEs. The actions will entail tailored services as well as projects.
Disruptive innovation
All the innovation usually entails uncertainty and this is particularly true for the disruptive innovation. The disruptive innovation usually arises only as the advancement of the science and the technology intersect with the evolving markets in order to create previously unimagined opportunities (Liao, Rice & Lu, 2015). Disruptive refers to introduction of completely new approaches in the SME which have the potential to creating a new industry or even transforming the existing one. In MIUI9 organization they have developed a MIUI application that is based on Android which has come to be loved by everybody globally (Wan, Williamson & Yin, 2015). Over the years they have been able to change the level of this technology and developed features and optimizations which are able to enhance the way individuals uses the phone. The MIUI application is intuitive, helpful and at the same time easy to use (Markides, 2006). Innovation could be the key differentiator between the market leaders and the other competitors. It has been found to help in the positive development of a given country, society at large as well as the environment that makes it all possible.
Type of SMEs that could take advantage of disruptive innovation.
There are various types of SMEs which could take advantage of the disruptive innovation. One of the type of SME is hybrid. These SMEs embodies individuals who are the content experts as well as implementation experts (Wan, Williamson & Yin, 2015). These SMEs they are expected to offer the support to both the content of a program and in the best deliver of it. The second group is the sentinel SMEs, this type of SME has been reserved to those in the world who manages and at the same time monitors many projects (Klewitz & Hansen, 2014). These SMEs could take advantage of the disruptive innovation since they are involved in monitoring huge project and when they see a project which will benefit the organization they will take advantage of it. Another kind is functional SMES. These are vital especially to a project (Wan, Williamson & Yin, 2015). They could include the programmers and software designers.
Internal and external factors for successful implementation of disruptive innovation.
Customer needs and expectations: The customers’ needs and the expectations are important in improving on the process more effectively (Klewitz & Hansen, 2014). The orientation to the clients and their satisfaction are well known concept when it comes to the field of the total quality management.
Innovation of the business product: when it comes to the innovation of the product there are approach which are based on the customer needs in order to emphasize that organization in their innovative effort could turn to the needs of the users.
Industry maturity: The main innovation model as well as the development usually help the managers in understanding what kind of innovation and strategies that would be considered in various periods of the development and various competitive surroundings (Markides, 2006).
Financing: This factor could contribute to successful implementation of the disruptive innovation especially when the company set funds aside aimed for the purpose of implementing new application within the organization.
Human resource/ entrepreneurial team: The human resource within an organization could employ a team who will be responsible for the implementation of the disruptive technology.
Strategic alliances: A company could form an alliance within another company that they compete in, within the same business (Schwab, 2017). They will merge on their resources to enable them implement a disruptive innovation within their business operation and this will offer them a competitive edge to the other organizations within the same business operations.
Policies:
The highly regulated industries are not innovative. The government regulation can disable innovation. The government has set policies which are aimed to reduce the barriers to entry for the new technologies and organization. They have provided new critical infrastructure on which the new technologies such as the disruptive innovation could operate and grow. Governments’ in many countries have distributed the social costs for competing alternatives, which has changed on the value proposition to the emergence of these technologies as well as the business models. In additional to the regulatory policies it is possible to embrace the disruptive innovation.
Interventions:
There are various interventions which have been carried by the government to enable the growth of the disruptive innovation. One has been through creation of the partnership between the agencies of the government and the business, government and the NGOs and the government and the citizens (Chu, 2017). This will enable new ways of delivery of the public services, open data analytics and the social integration of the new technologies. The government has also implemented the financial and the fiscal instrument which will encourage innovations within the organizations.
References
Assink, M. (2006). Inhibitors of disruptive innovation capability: a conceptual model. European Journal of Innovation Management, 9(2), 215-233.
Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). Disruptive innovation. Harvard Business Review, 93(12), 44-53.
Chu, D. (2017). 2.0 Academic Management:” Disruptive Innovation” for the 21st Century.
Cortez, N. (2014). Regulating disruptive innovation.
Klewitz, J., & Hansen, E. G. (2014). Sustainability-oriented innovation of SMEs: a systematic review. Journal of Cleaner Production, 65, 57-75.
King, A. A., & Baatartogtokh, B. (2015). How useful is the theory of disruptive innovation?. MIT Sloan Management Review, 57(1), 77.
Liao, T. S., Rice, J., & Lu, J. C. (2015). The vicissitudes of competitive advantage: Empirical evidence from Australian manufacturing SMEs. Journal of Small Business Management, 53(2), 469-481.
Mahto, R. V., Belousova, O., & Ahluwalia, S. (2017). Abundance–A new window on how disruptive innovation occurs. Technological Forecasting and Social Change.
Markides, C. (2006). Disruptive innovation: In need of better theory. Journal of product innovation management, 23(1), 19-25.
Ruan, Y., Hang, C. C., & Wang, Y. M. (2014). Government? s role in disruptive innovation and industry emergence: The case of the electric bike in China. Technovation, 34(12), 785- 796.
Schwab, K. (2017). The fourth industrial revolution. Crown Business.
Wan, F., Williamson, P. J., & Yin, E. (2015). Antecedents and implications of disruptive innovation: Evidence from China. Technovation, 39, 94-104.
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