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Creating the Hi-Tech “Glocal” SME

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HomeInnovationThe Open University Business School

Creating the Hi-Tech “Glocal” SME

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How new technology can help globalisation work for SMEs

Creating the Hi-Tech “Glocal” SME

SMEs face a range of contemporary challenges from an unpredictable economy to the pressures from larger competitors. Looking over horizon, there are two looming potential dangers to smaller and medium sized businesses – the continued impact of globalisation and the coming “fourth industrial revolution”. At stake is how these firms will be able to not only survive but thrive in a more global and hi-tech business environment. What is absolutely crucial, in this respect, is for SMEs to begin seeing these as opportunities for change and growth rather than threats that must be coped with.

Specifically, SMEs can take advantage of new production techniques in order to improve their processes and overall outcomes. Notably, “distributed manufacturing” associated with for instance 3D printing permits for organisations to switch from mass production to more customisable production models. The days of creating standardised products is evolving into a time where customers want their purchases to be specifically personalised to their own specifications and needs. Rather than just buying a standard issue phone or shoe, people now desire to be part of their very design so that they can match their particular needs. Large scale manufacturing is at a profound disadvantage in this changing consumer marketplace in that their processes are tailored to homogenised production techniques that leave little room for consumer input or personalisation. By contrast, SMEs can cultivate a much more direct and collaborative set of customer relationships and used cutting edge manufacturing technology to profit from these smaller purchasing orders.

This speaks to an important but often overlooked element of globalisation – the significance of “glocalisation”. Notably, how to channel global trends and developments to meet local conditions. Within this more personalised consumer marketplace, locally owned shops are in much stronger position to speak to those engaged in distributed manufacturing processes what their local customers want and therefore create products at scale that meet these regionalised desires. Doing so provides them with a distinct competitive advantage over trans-national corporations who while having some ability to “glocalise” their products will lack the specific knowledge and flexibility to do so quickly and responsively. Further, given that they are producing at a mass scale, even if these larger businesses do see an opportunity for localising their goods and services, they may find it not cost effective to do so.

There are also opportunities in the realm of knowledge creation. Traditionally larger firms have had a decided advantage in discovering and adopting new technologies and organisational techniques due to their greater size and resources. However, the potential of open – sourced collaborations has dramatically changed this dynamic. Increasingly, organisations and individuals are using global networks to share information and work to solve problems together. This form of digital sharing economy, can be valuably used by SMEs as it can allow them to use collaboration rather than competition to draw on progressively growing data sources. Moreover, their smaller size gives them the adaptability to channel this collective knowledge into context-specific solutions for their customers and own processes.

These are just two examples of the ways new technology can help globalisation work for SMEs rather than against them. It is imperative that SMEs link their growth strategies to such forward thinking innovation. They should all seek to take advantage of the opportunities of becoming a hi-tech “glocal” SME.

Dr Peter Bloom, Head of the Department for People and Organisations, The Open University Business School – 2017

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