Small or medium enterprises (SMEs) are the lifeblood of economies and communities worldwide, fuelling economic development and employment on a massive scale. They dominate Australia’s business landscape, employing more than 7.4 million people and making up 99.8 per cent of all businesses.
Innovation serves as a key driver of growth for SMEs. However, the path to growth can be filled with obstacles. Many SMEs lack the internal resources and expertise to undertake research and development (R&D) projects independently. This is where collaboration with research institutions, like CSIRO, can be transformative.
CSIRO’s research on SME enablers and barriers has revealed a significant correlation. SMEs that engage in collaborations with research institutions not only tend to achieve greater success, but also exhibit greater resilience in the face of uncertainty and disruption. Consequently, it is imperative to dismantle the barriers hindering equitable access to R&D opportunities, providing every visionary entrepreneur with an equal chance to transform their ground-breaking ideas into reality – regardless of their gender, age and identity.
- Collaborating with research institutions can help SMEs innovate, but a range of barriers can prevent collaboration.
- The average size of SMEs led by women, young and diverse entrepreneurs is smaller, which can limit access to research and development opportunities.
- There are many ways to reduce barriers to SME collaboration and make research and development opportunities more accessible and inclusive.
Spotlight on women and youth-owned enterprises
In Australia and around the world, women and youth-led SMEs have emerged as a rapidly growing economic force. More than a third of all Australian SMEs are currently owned or managed by women.
Recognising the vital role of women and youth (defined as individuals under 25) entrepreneurship in achieving the objectives of the UN Sustainable Development Goals, the United Nations (UN) emphasises the need to reduce barriers to their success. Supporting women and youth-led businesses was one of the major themes of International Micro, Small and Medium Enterprises Day.
Despite their growing number, SMEs led by women or young people are still smaller on average than SMEs overall. This makes their entrepreneurship especially vulnerable to disruption from external shocks, like the pandemic, supply chain disruptions, economic conditions or geopolitical tensions.
While all businesses encounter challenges, the incidence, magnitude and effects of certain obstacles can be unevenly distributed based on entrepreneur identity. The Organisation for Economic Co-operation and Development (OECD) reports a mix of cultural and economic barriers are responsible for gender and age-based statistical differences in business success. Barriers to entrepreneurship include financial factors, fewer role models, smaller and less effective networks, lower confidence, and competing demands on time.
R&D opportunities are not exempt from these inequities. Identity-based inequalities, including those related to gender or age, can potentially amplify existing barriers to SMEs collaborating with research institutions. The effects of inequities can be further compounded by multiple intersectional factors (including race, migrant status, cultural background, disability, minority sexual or gender-identity, socio-economic status and more).
While each SME-owner’s experience is unique, barriers related to finance, experience, networks, and a lack of role models are among the common challenges faced by diverse entrepreneurs. These can all impact R&D opportunities.
By addressing barriers to SME-research collaboration we can improve the accessibility of R&D for everyone leading to substantial flow-on benefits.
Let’s collaborate to make innovation more accessible
To empower women and youth-led SMEs to innovate and enhance the overall accessibility and equity of collaborative R&D opportunities, we must all join forces.
Research institutions, governments and funding bodies, businesses of all sizes, industry organisations, non-profits, the media, and members of the public all have crucial roles to play.
Based on CSIRO’s research and experience collaborating with SMEs through programs like the CSIRO Kick-Start program, here are some recommendations to help.
Understanding the barriers
To minimise barriers to collaborative innovation, people involved in industry-research programs need to understand these obstacles and their implications. Examining the factors influencing SME collaboration, while also understanding common challenges faced by entrepreneurs of different identities, is a good starting point.
CSIRO’s SME enablers and barriers research provides data-driven recommendations to increase SME-research institution engagement. Resources like the OECD’s The Missing Entrepreneurs 2021 report shed light on diversity and inclusion in entrepreneurship, including issues relevant to women and youth-led SMEs.
Evaluating policies and processes inclusively
Once CSIRO knows the common hurdles to collaboration and how they potentially intersect with gender and other facets of diversity, CSIRO can apply this lens to our own organisations. To align with the goals of gender equity, diversity and inclusion, organisations facilitating industry-research collaborations must review their policies and processes.
Application processes for R&D programs and grants should be streamlined and user-friendly, minimising duplication and offering support throughout the application process. Complex and time-consuming procedures can discourage diverse applicants, especially those with smaller or less established companies without the resources to expend on time and labour-intensive application requirements. Addressing this can help encourage applications from a wider range of SMEs.
Incorporating facilitators into collaborative innovation programs
Institutional funding schemes targeting SME-research collaboration should include facilitation. Facilitators, who act as intermediaries between SMEs and researchers, can improve the success rate of R&D collaboration programs. Their support helps SME owners navigate the collaboration process, define their R&D needs and objectives, and establish beneficial connections.
CSIRO’s Kick-Start program facilitators assist SME owners in navigating the processes involved in collaborative projects. This support helps build confidence and ensures entrepreneurs with less R&D collaboration experience have equal chances for excellent project outcomes.
Embracing flexibility and a long-term perspective
For organisations involved in innovative collaboration, a level of flexibility – particularly when it comes to project sizes, timelines and value – can help make programs more accessible and inclusive.
Starting with smaller, shorter R&D projects can be more feasible for women and youth-led SMEs with limited resources or less experience working with research institutions. Funding schemes and programs can be more inclusive by considering smaller projects and adopting a longer-term perspective on value, impact and investment.
Based on previous experiences at CSIRO, smaller projects can be excellent investments that lead to ongoing SME engagements. More than 40 SMEs have continued to work with CSIRO after completing a Kick-Start project, generating an additional $26.4 million in subsequent research and development outputs.
Providing tools and support to build confidence
Various tools and support can enhance R&D accessibility. Publishing or sharing relevant information and increasing the confidence of SMEs to engage with R&D can be especially helpful to women, younger and diverse entrepreneurs. A visible research organisation presence at relevant events can build familiarity, in turn increasing the confidence of SMEs to collaborate.
Here are a few resources that may be helpful:
- Innovate to Grow, a free training and mentorship program can help introduce SMEs to R&D so they can begin to explore their opportunities.
- CSIRO’s Collaboration Readiness Tool provides a simple way to assess your business’s capacity to collaborate and get recommendations for programs and contacts suited to your circumstances.
- Ready, set, collaborate: Five ways to boost your SME’s research and development potential outlines steps SMEs can take to make the most of R&D collaborations.
Sharing success stories
Anyone can help encourage R&D collaboration by sharing success stories widely. Spreading the word ensures more SMEs understand the benefits of collaborating with research institutions. Positive publicity can also encourage research organisations to consider working with SMEs more frequently.
Sharing success stories featuring SMEs with diverse founders can inspire other entrepreneurs to engage in collaborative R&D. To inspire you, here are three Kick-Start success stories involving companies led or co-founded by women.
Kick-Start company Neurode was co-founded by neuroscientist Nathalie Gouailhardou (with Damian Sofrevski). The company is developing a headband that can image the human brain in a real-world setting to provide precision mental health care and personalised drug-free treatment for attention deficit hyperactivity disorder (ADHD) and other conditions.
Bestie Kitchen founder, Amanda Falconer, participated in Innovate to Grow and Kick-Start to grow her business and develop science-based nutritional pet foods and supplements.
Kick-Start funding is supporting ULUU co-founders Michael Kingsbury and Dr Julia Reisser to work with researchers from CSIRO’s Manufacturing team to test seaweed-derived alternatives to conventional plastics.