Recession is a time for battening down the hatches, staying the course and avoiding unnecessary expenses — right?
Not according to Canada’s entrepreneurs, who are in a fighting mood as they await a recovery. In a new survey, 61% of business owners said they are investing in innovation and/or research and development this year, which may surprise business-watchers who think small business owners are innovation laggards.
But business owners are always looking at new product ideas and tweaking their service offerings. Designing a new type of sandal, hiring an SEO consultant to beef up a Web site, or recruiting a student to make cold calls all count as innovation in a small company, where you fall behind whenever you stop moving forward.
The Canadian Small Business Monitor, published last week by American Express, breaks ground by putting a price tag on innovation investment. An impressive 13% of the 500 business owners surveyed said they will spend more than 10% of revenues on innovation or research and development this year; 10% expect to spend between 6% and 10%; and 28% plant to invest 1% to 5%.
Another reassuring finding is only 19% of business owners said they will spend nothing on it “because innovation/ R&D does not apply to my business;” while 13% said they don’t have the budget for it, and 7% were undecided.
(That last group probably includes the dry cleaner that tore your favourite jacket, the e-commerce Web site that lost your order and the ad agency that produced the Stephane Dion video last December.)
Overall, 40% of the businesses surveyed consider innovation a “high priority,” while 8% call it a “top priority.” Generally, the larger the company, the higher priority they place on innovation.