SMEs can lead way on innovation.

Despite the uncertainty facing companies worldwide, business should not stop innovating, according to leading industry figures.

In a lively round table debate to kick off CIMA’s global management week, six business leaders said the new challenges facing business demand inventive solutions often found by small and medium-sized companies.

Bruce Epsley, president of CIMA said aversion to risk at present is understandable but: ‘It would be a mistake to implement management controls that prohibit creativity.

‘We must encourage a thriving and creative business climate to see us through the present situation and to prepare us for the up-turn that lies ahead.’

‘This is where the management accountant plays a vital role, by creating an environment in which the creative process is managed effectively and risks can be taken in a controlled way,’ he added.

But George Cox, director general of the Institute of Directors who chaired the debate, pointed out that although most people back creativity, the practical reality is often rather different, particularly in the aftermath of the dotcom crisis, when companies want to avoid risk. According to Cox, large global companies could learn from SMEs on creativity.

He said: ‘Risk-taking, small teams rely on people’s gut instincts rather than market research. Flexibility and simpler management structures are the virtues of small businesses, which larger corporations could emulate.’

Simon Woodroffe, chief executive officer and founder of Yo! Sushi, said that the economic slowdown gave SMEs opportunities because they are more flexible and can respond faster.

‘Sometimes you need to do outrageous things to get noticed – this is where SMEs excel.’

Epsley pointed out that SMEs suffer during downturns as they cannot always afford to invest in creativity.

But Sarah Anderson, founder and CEO of the Mayday Group, opposed this, saying creativity was their ‘lifeblood’. She said: ‘That is why they exist, to express the creativity of their owners/ founders.

‘They also form an extremely important part of the UK economy, employing more than half of the working population – something which is often forgotten by the policy-makers.’

– Measuring creative value www.accountancyage.com/Practice/1125312.