Innovation and Sustainability in SMEs

Innovation and Sustainability in SMEs

DOI: 10.4018/978-1-5225-3543-0.ch008
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Small and Medium Enterprises (SMEs) are the engines of economic growth, promote equitable development and create more opportunities for being innovative in providing sustainable solutions. They also play a crucial role in providing employment opportunities, aid industrialization in rural backward areas, reduce regional imbalances and assure equitable distribution of national income and wealth. But survival in the new global market calls not only for improved productivity but sustainability and growth through innovation on incessant basis. Business sustainability involves self-assessment to identify improvement opportunities, strengths and ideas for future organizational development. In India, though SME is an important contributor to economy, yet many face lot of difficulties and end winding up or becoming unsustainable. Several studies have shown that factors related to poor management, less innovative approaches, short short-termism are the causes of failure or closure. Hence, the core objective of this chapter is to explore the approaches which can lead to better understanding of sustainable replicas to enhance innovation and sustainability.
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Understanding Innovation

Innovation is the process where in there is newness either in the way a thing is done or a complete new product or new service. It can be either a new thing or completely a new way of doing the same thing. It can refer to both tangible and non-tangibles. Therefore, it can be an innovative product or service or even process. According to OECD (2005), innovation can mean the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations. Thus, innovation can play a strategic role society by contributing to growth, through creation of new opportunities and jobs, which in turn may help to deal and mitigate social and environmental challenges (Eurostat, 2005).

Key Terms in this Chapter

Ecology: The air, water, minerals, organisms, and all other external factors surrounding and affecting a given organism at any time.

Leader: A person who rules, guides, or inspires others; head of an organization.

Sustainability: Requirement to manage the resource base such that what we ensure ourselves can potentially be shared by future generations; more equitable, economic system.

Environment: The aggregate of surrounding things, conditions, influences; or milieu.

ISO 26000: An international standard that provides guidance on how businesses and organizations can operate in a socially responsible way.

Regulatory: Laws and regulations, both domestic and in foreign jurisdictions, as applicable.

Disaster Planning: Readiness for a variety of unexpected or foreseeable events (extreme weather events, floods, forest fires, ice storms, earthquakes, volcanic eruptions, environmental spills, disease outbreaks).

Director: Top management personnel who plays a leadership role in establishing an appropriate “tone at the top” regarding the company’s dealings and relationships with its stakeholders.

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