Leadership | Sep 29

Removing barriers to innovation

Leadership | Sep 29

Small businesses need leaders who will keep pushing, adapt quickly, and turn setbacks into momentum

Ian Wylie Journalist, broadcaster, educator

Reading Time 4 minutes

Innovation is often framed as the preserve of large corporations with deep pockets, R&D departments, and international reach. Yet, for small businesses, innovation can be just as vital, if not more so, for survival and growth. ‘The real risk isn’t trying something new, it’s standing still while others move ahead,’ says Kieran Kelly, founder and CEO of ubloquity, a technology company that serves global supply chains through digital asset identification, authentication, and traceability.

But how do you unlock innovation in practical, sustainable ways?

Mindset over money

The daily grind can leave little room for strategic thinking or experimentation. ‘For many small businesses, perhaps the greatest barrier to innovation is mindset,’ argues Professor Tim Vorley, Dean of Oxford Brookes Business School, who has an OBE for his research on enterprise, entrepreneurship, and innovation. ‘We know that many small business leaders are often preoccupied with working in the business and consequently don’t have the bandwidth to work on the business.’

Similarly, fear of failure looms large, Vorley has observed: ‘Fear of failure and perception of risk can prevent small businesses from taking that innovative step.’ But he also reminds leaders that ‘not all innovation is world changing’. Often, the most impactful gains come from adopting existing technologies or processes that improve performance. For small firms, incremental improvements can be transformative.

Space for experimentation

Innovation doesn’t require massive budgets but discipline, according to Kelly. ‘Start by carving out space for experimentation. Even a small budget line or a few hours a week ringfenced for testing new ideas sends the signal that innovation matters.’ Kelly recommends balancing risk by running ‘small, fast experiments instead of big-bang projects. Test ideas on a limited scale, prove value, then double down.’ This approach protects cashflow while keeping innovation alive in the business.

Cultivate openness

Culture is the foundation of innovation. ‘Innovation dies fastest in environments where people are afraid to speak up,’ warns Kelly. A culture where staff can challenge assumptions and share ideas without fear can unlock creativity from within. ‘Creating space for curiosity is important and can enhance organisational learning,’ adds Vorley. Encouraging staff to share information can itself be a catalyst for new ideas. Innovation is less about solitary genius and more about collective engagement.

Leverage networks

No small business innovates in isolation. Kelly points to ubloquity’s growth through collaboration. ‘Our growth has come from working with partners in defence, aerospace, food and logistic,’ he explains, ‘proving that innovation scales faster when you share risk and build trust.’

‘Working in partnership is another way to pursue innovation projects, whether with other businesses or with colleges and universities,’ agrees Vorley, who says peer networks also play a crucial role. ‘Seeing and working with others has been seen as a successful catalyst for firms adopting innovative technologies and pursuing new innovation projects.’ For small businesses, partnerships reduce risk, bring in expertise, and open new markets.

Don’t bet the farm

One of the biggest barriers is finance. Kelly says SMEs are held back by weak access to capital, fragmented support systems, and a culture that rewards safe bets over bold innovation. His advice? Set aside modest sums for innovation: ‘Protect cash flow by ringfencing a modest innovation pot each month rather than waiting for spare budget that never comes,’ he suggests.

Even small grants can make a difference, adds Vorley. ‘A small grant from a council or business support organisation can kickstart things before looking to apply for larger grants from Innovate UK and other national bodies,’ he says. Pump-priming funding, funding for specific sectors typically from the government, allows businesses to test ideas before scaling.

Embrace technology

Kelly and Vorley agree that technology adoption is central to small-business innovation. Kelly urges firms to adopt digital tools early, whether that’s AI, data analytics, or blockchain. In small firms, the right technology can deliver an innovation edge that larger players are too slow to adopt,’ he says.

Vorley is equally optimistic: ‘Big opportunities exist in the AI space, with many firms exploring how AI can augment and enhance what they do.’ But he adds a note of caution. ‘AI, or any technology, is not the solution but is instead there to enable solutions.’

Innovate your business model too

Firms should also rethink their offerings, configurations, or customer experiences to add value, says Vorley, who highlights sustainability as an example. ‘As consumers demand more green and sustainable products and services this represents an opportunity for many smaller businesses who can be agile in developing what they do,’ he says.

Kelly underscores the importance of storytelling, noting that innovation needs to be communicated clearly: ‘Storytelling matters as much as the tech. We’ve had to show people why it matters in plain language before they’ll buy in.’

In all of this, resilience and persistence are essential. ‘Innovation always meets resistance,’ says Kelly, ‘so small businesses need leaders who will keep pushing, adapt quickly, and turn setbacks into momentum.’

Ian Wylie Journalist, broadcaster, educator

Ian Wylie is a journalist, editor, and broadcaster for the Financial Times, Guardian, BBC, Monocle, and others. For 16 years he was a staff writer, feature writer, and section editor at The Guardian newspaper. He also teaches on Newcastle University’s undergraduate and postgraduate journalism programmes.

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