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Brazil Learns That Innovation Can Double Small Businesses’ Profit

Manioc flour plant in Brazil - Sebrae A study prepared by Sebrae, the Brazilian Micro and Small Business Support Service, in the southeastern Brazilian state of São Paulo showed that change paid off to micro and small-sized companies that underwent innovation processes in their businesses last year.

52% recorded expansion in production volume, 46% increased their revenues, 39% had greater labor force productivity and 24% expanded their personnel. The results are twice as good as those posted by companies that did not innovate.

The survey Innovation and Competitiveness in Micro and Small Companies in São Paulo, elaborated by the Micro and Small Enterprises Observatory, heard 450 companies based in São Paulo, a sample representative of the universe of companies in the states in the industry, trade, and services sectors.

The survey was presented last week during the workshop Innovation and Competitiveness Challenge in Micro and Small Enterprises, at the auditorium of Sebrae/São Paulo.

The aim of the survey was to determine the rate of innovation among micro and small businesses in the state of São Paulo, evaluate the frequency with which businessmen innovate their businesses, and determine what were the main innovative processes implemented.

To the Innovation and Technology manager at Sebrae, Marcelo Dini Oliveira, "innovation can contribute a lot to increasing the competitiveness of micro and small enterprises; for that reason, we put our best efforts into propagating this concept," he asserted.

To the technical director at the institution, Paulo Arruda, attaining success in business does not depend solely on having a quality product and good customer services. "In order to have a differential, a company must always innovate, and this survey proves this to be possible with little money and much creativity," he said.

As to the frequency of innovation, the survey indicated that 53% of the companies interviewed claimed to have made some improvement or introduced a new feature in their business. Of all the companies surveyed, 28% developed new products, 22% implemented new processes and 15% conquered new markets.

With regard to product- and service-related innovation, 11% consisted of greater brand variety, additional services, products that consume less energy, new parts in the auto industry, new medication, and household appliances. The need for business innovation, in 11% of the companies, was identified by means of suggestions from the customers themselves.

With regard to the adoption of new processes and methodologies, 5% of the businessmen cited computerization of the company, along with improvement of quality and security, inventory and quality control, courses and implementation of new production technologies. These processes were initiated, in most of the companies, from inside the company itself.

The survey also determined that half the companies invest up to 2,000 reais (US$ 1,253) in development of new products, the same amount in development of new processes, and up to 6,000 reais (US$ 3,761) in seeking new markets.

Of the 28% of interviewed companies that innovated in their products, 96% are already profiting from sales of the product in the market, and obtained a 84% rate of response to the product as great or good.

Sebrae

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