Globalization and Innovation

(Web article for Kansas City Small Business Monthly)

The intensification of competition, brought on by globalization and the creation of a more global economy, is driving small businesses to become more innovative. In fact, the rebirth of innovation--the introduction of new products, processes, and services--just might be one of the most significant “unintended consequences” of globalization! Take a look around; innovation reveals itself everywhere and everyday—in both small and large ways. For example, the multinational global organization, Martha Stewart Living Omnimedia, Inc., started out as a small catering business and is now the world’s leading integrated information company devoted to enriching the changing lives of today’s women and their families. Starbucks, a global company that expects to eventually have as many coffee shops in China as it has in the United States, grew out of a small business Seattle coffee shop and the innovative efforts of an entrepreneur named Howard Schultz. And, some innovator, who I am sure must be a “gazillionaire” by now, put those little wheels on suitcases.

The enabling force of the Internet

 Small businesses, when equipped with the enabling power of the Internet, can now—as never before—more fully participate in the innovation (inventiveness) process. The Internet literally makes possible access to the world’s research information, which is needed to generate and evaluate new ideas/concepts and turn them into profit-making products, processes, and services. In addition to research and evaluation, the Internet is also proving to be an excellent tool for seeking out potential global investors and sponsors for innovation projects, as well as potential collaborators in the innovation process. For example, today, globally dispersed individuals can work together on a common research and development project from their homes or businesses via the Internet and World-Wide-Web.

Ideation

 As globalization, outsourcing, and offshoring turn up the heat on small businesses competing in the “flat world economy,” where the use of “cheap labor” from the developing nations seems to rule the day, the process of innovation is taking on an even more important role as the lifeblood of sustainable profitability. Small businesses/entrepreneurs are rising to the task and engaging in a complementary process to innovation called “ideation.”  Simply put, “ideation” means brainstorming ideas and seeking out straightforward unconventional solutions to complex problems. To learn more about the “ideation” process and its use, go to www.planninginnovations.com/ resources/Articles /Ideation %20101.htm.

Innovation Kansas City style

            It may not be well known yet, but Kansas City is becoming a “hotbed” of innovation—especially for biotechnology and related products, services, and processes. In fact, the U.S. Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, Jon Dudas, reported in a late 2006 press release that Kansas City is the #1 place in the Midwest to start a business. And, Kansas City ranks #11, just behind San Antonio, Texas, on the “Hot Cities for Entrepreneurs” list published by “Entrepreneur.Com.” The globally recognized Kansas City Kauffman Foundation of Entrepreneurship and Education and The Institute for Entrepreneurship and Innovation at the University of Missouri-Kansas City are representative of the great organizations in Kansas City spearheading this recognition. These local organizations are also globally focused and have major specialized programs to help small businesses/ entrepreneurs become innovative. There are many other programs and leaders—too numerous to mention here--that have devoted their time and substantial resources to the process of innovation and entrepreneurship. We are thankful!

            Two examples of small businesses that have grown out of this favorable Kansas City innovation and entrepreneurship environment are:

·      Microjek – a nanotechnology business that produces the world’s smallest commercially available microinjection needles. These very tiny needles now allow injections--previously not possible--for life science, agro science and microelectronic research programs such as stem cell investigation, disease control, and gene mapping studies. Dr David Brown and Michael C. Jackson, co-founders of the company, are leading the company to adapt their technology to more applications in the cellular research market;

·      TVAX Biomedical – a Lenexa based business that has just received FDA approval for final human trials of a therapy developed for the treatment of brain cancer. A former researcher at the University of Kansas Medical Center, Gary Wood, who is now leading the company and its efforts to make the treatment available for widespread use, developed this immunotherapy.

Government funding for ideas

The U.S. has long been the world’s leader in innovation. However, for many small businesses, the risk and expense of conducting research and development are often beyond their financial means. Do you have an idea for a new product or service but don’t have the funds to pursue it? Would you like to use your creative, imaginative, and inventiveness skills to develop a new product, process, or service needed by one or more of a dozen governmental agencies? To encourage and insure the continued growth of innovation by small businesses/entrepreneurs, the Small Business Innovation Research (SBIR) program—administered through the U.S. Small Business Administration (SBA)—provides funding for small businesses to propose innovative ideas that meet the specific research and development needs of the Federal Government. An additional Federal program, the Small Business Technology Transfer (STTR) program, also provides funding to qualified small businesses/entrepreneurs who want to participate in developing and commercializing new product and process technologies. Both of these programs target the small business sector of the U.S. economy because—according to the SBIR and STTR programs—“that is where a significant number of innovations and innovators thrive.” An example of the success of these government programs for small businesses can be found at a Tucson, Arizona, based small business startup named Advanced Ceramics Research. Through funding for the development of ceramic materials for NASA, this small business has now become a large global company supplying commercial ceramic products for radiation shielding, bio-implants (bone replacement), and communications products to firms around the world. Together, these two programs have $2.2 billion available for awards in 2007. To find out more about these programs and how to qualify for funding, go to www.SBA.gov/sbir.

Globalization, innovation, and intellectual property

            Globalization continues to open national borders, eliminate barriers to free trade, and drive businesses to become more innovative. However, along with this openness and increase in cross-border transactions has come the pirating (illegal reproduction and use) of intellectual property (patents, ideas, computer hardware/software) inventions. Both small and large businesses may struggle to be innovative, only to find out that duplication and sale of their invention is occurring in Southeast Asia, or other location in the world where the protection of intellectual property is weak, or non-existent. It is often small businesses that are most vulnerable and increasingly at risk to the pirating and counterfeiting of intellectual property. For example, according to a recent Business Software Alliance study, about 35% of all software running on computers worldwide was pirated. And, it is estimated that the U.S. loses in excess of $2.5 billion each year as a result of the piracy of patented and copyrighted materials, just in China. With about 40% of small businesses in the U.S. now doing business globally, protective measures are required as never before. While the pirating/counterfeiting of intellectual property poses a serious threat to innovative U.S. businesses, it has not discouraged small or large businesses from participating in the new global economy. To help small businesses protect their inventions, the U.S. Patent and Trademark Office provides informative websites (www.uspto.gov/smallbusiness and www.stopfakes.gov/smallbusiness) on Intellectual Property protection.      

In the new “flat world” global economy--overwhelmed by complexity and globalization’s intense economic competition--small business innovative thinkers are once again leading the way with their innovative products and services. Whether it be the invention of those “back-saving” little wheels on suitcases—which, by the way, were invented by an ex-Northwest Airlines pilot named Bob Plath who went on to grow his small business into the now luggage giant Travelpro--or the invention of those life saving world’s smallest commercially available injection needles by Kansas City based Microjek, small business innovation continues to enrich our lives and make the world a better place to live.