Investing in new technologies is always risky. The general rule is that the closer the new technology to existing competence in a company, the more investment insecurity is reduced. Independent of the risk factor, an ever-present barrier is lack of access to venture capital.
Another common barrier is lack of technical competence in SMEs to understand, accept and implement the technology. Most qualified engineers are employed in the bigger companies and inciting them to work in SMEs will take time. Some small universities have small-scale experiments where newly-qualified engineers have the opportunity to work for 6-12 months in an SME. In many cases they are then taken on by the company, fulfilling the main purpose. This activity has so far been successful and is one of many ways to build up the capacity of SMEs to absorb new technology.
A third general problem is that information about new technologies is often described and presented in a form that suits big companies. SMEs will usually have to wait until the information is presented in terms they can understand. Very little resources are set aside to speed up this kind of transfer.
A fourth barrier is the targeting of SMEs for technology diffusion. In Sweden one of the targets of the recent bill on R&D is to develop methods designed to build bridges between SMEs and R&D. So far, only a few SMEs have experienced contacts and co-operation with R&D resources. The guidelines mean that methods must be developed so that SMEs with no experience of R&D can take part in technology diffusion in a broader sense. As more SMEs are targeted, new barriers will arise. This is a logical effect that will influence policy development for SMEs.
UNITED KINGDOM
OPEN SYSTEMS IN MANUFACTURING
Table of contents
Page 1. Rationale for Department of Trade and Industry assistance for small and
medium-sized firms . . . 143
2. DTI support programmes for SMEs . . . 143
3. One-Stop-Shops . . . 143
4. Open Systems in Manufacturing programme: programme description . . . 144
5. Programme design . . . 144
6. Barriers to IT diffusion . . . 144
7. Evaluation and monitoring . . . 144
8. Other relevant programmes . . . 145
1. Rationale for Department of Trade and Industry assistance for small and medium-sized firms
The UK Department of Trade and Industry is responsible within the UK Government for policy towards small firms. This responsibility was taken over from the Department of Employment after the 1992 General Election.
The UK Government is determined to create an environment in which small businesses can flourish by making it as easy as possible to set up in business. There has been substantial growth in the number of businesses in the United Kingdom over the last decade, and the Government continues to seek new ways to encourage new small firms to grow.
The rise of new high-technology firms from small beginnings adds an extra element of rivalry and flexibility to the market’s response to technology opportunities. The Government encourages the growth of new-technology-based small firms as a way of encouraging and increasing innovation throughout the economy.
2. DTI support programunes for SMEs
This paper describes in detail the DTI’s "Open Systems in Manufacturing" programme, which is aimed specifically at small and medium-sized enterprises (SMEs). This programme has been associated with DTI’s "Open Systems Technology Transfer" programme (OSTT). Also mentioned briefly are other DTI support programmes for SMEs which include an IT element.
The Department runs several programmes which are intended to help firms understand and exploit modern technology and its management. This information is often less easily available to small and medium-sized firms, so DTI makes a particular effort to involve such firms as participants in its programmes.
All these programmes fall under the Department’s "Enterprise Initiative" which aims to enhance the competitiveness of established firms, particularly in manufacturing, by promoting best management practice and by providing practical help and guidance in several areas such as strategic management advice;
exports; and regional development.
3. One-Stop-Shops
In late 1992, the DTI announced a competition to stimulate the development of up to 15 pilot
"One-Stop-Shops" based on about 15 English towns and cities. The aim of the One-Stop-Shops is to enable business people to access the full range of existing business support services through a single local point.
The shops will be run by local partnerships, with initial DTI financial support. If the pilots are successful, it is planned to establish a national network. The One-Stop-Shops are expected to be of particular assistance to small firms.
4. Open Systems in Manufacturing programme: programme description
The aim of the "Open Systems in Manufacturing" programme is to make manufacturing companies more aware of the benefits of integrated manufacturing using standards-based information systems. It is
aimed predominantly at small and medium-sized enterprises, particularly those with 50-500 employees.
Total DTI funding is £2-4 million over three years.
Mechanisms include:
i) live events such as conferences;
ii) workshops in different regions of the United Kingdom;
iii) demonstrator projects, where companies have the opportunity to see existing systems in action;
iv) case studies;
v) publications on technical topics;
vi) market assessment studies;
vii) the establishment of the "Open Systems in Manufacturing Interest Group", which currently has over 1 000 members.
5. Programme design
Before the programme started, market assessment studies were carried out which considered industry’s attitude to Open Systems, and examined the need for a DTI programme. A large number of SMEs were interviewed during the course of this study.
Audience response to the programme continues to be important in planning future activities within the programme.
6. Barriers to IT diffusion
We have found that many SMEs do not have the information necessary to take best advantage of the benefits of Open Systems. The programme has aimed to provide that information in an easily-accessible format and to persuade SMEs that the use of Open Systems is as much a management issue as a technological issue.
7. Evaluation and monitoring
The programme is being continually monitored and lessons learned are applied during the course of the programme. Delegates attending events are asked for their comments on the particular event and the programme in general.
Quantitative results are obtained from the number of companies receiving material, attending events, etc. The membership of the Interest Group is also a useful indicator.
Companies who have received information under the programme are also asked what follow-up action towards the implementation of Open Systems they have taken as a result of the programme. This is a useful indicator of the qualitative success of the programme.
All DTI support programmes receive an evaluation, and the evaluation process is monitored by a DTI Committee (EPIC). Evaluations are sometimes carried out by external contractors and sometimes by DTI’s own Assessment Unit.
8. Other relevant programmes Managing into the 90s
This programme focuses on a number of key areas of management where many businesses can expect to face the problems and opportunities for change in the 1990s. These include:
-- marketing;
-- design and new product development;
-- purchasing and supply;
-- production;
-- quality.
The programmee also focuses on the need to innovate and to manage the resulting need for change.
The programme particularly focuses on the needs of small and medium-sized firms, in all sectors.
The total budget is around £9 million over three years.
The Consultancy Initiative
DTI provides financial support for consultancy projects in order to encourage the use of outside expertise as a regular part of management strategy. Consultancy help is available to most independent firms or groups with fewer than 500 employees. The projects cover the six key management areas of quality;
design; marketing; manufacturing and service systems; financial and management information systems;
and business planning.
Research and development programmes
SMART (Small Firms Merit Award for Research and Technology) is an annual competition for individuals or businesses with fewer than 50 employees. It offers phased financial support towards the development of new technology projects with a good prospect of commercial success.
SPUR (Support for Products Under Research) provides help to smaller independent companies of up to 500 employees for the development of new products or processes which can demonstrate a significant technological advance.
Small firms are also actively encouraged to take part in collaborative research and development projects funded under the two support mechanisms (LINK and Advanced Technology Programmes).
Technical Action Line
This helpline is designed to help small firms solve immediate problems concerned with the application and use of technology. It will enable them to have easy access to experienced "trouble-shooters", who will provide a quick problem-solving service at a subsidised cost.