My last blog in the SMEs: Equipped to Compete series discussed the challenging human factors SMEs are facing in today’s technology-dependent global economy. In this article, we take a closer look at how SMEs are fostering a culture of innovation to help their workforces adopt new technologies – even where skills gaps exist.

Innovation is a key driver to growth and SMEs are primed to be big players, especially when they consider that innovation is more than developing new products and services. A company that thinks of innovation beyond such parameters to include streamlining business processes to reduce costs, and aligning the business leadership, technology and organizational structure to foster innovation – will have the competitive advantage.

SMEs are clearly moving in this direction. The Oxford Economics recent study confronts the myth that SMEs are slow to uptake technology. In the findings, more than one-third of respondents identify themselves as early adopters of technology. However, 40% of SMEs say that to fulfill their plans to transform, innovate, grow, and compete, they must also confront the skills gap.

Yet, when it comes to recruiting people with the right skills, SMEs find themselves struggling – on average, 39% indicate this as a looming challenge.

Zanzini Móveis, a Brazilian furniture maker with $41 million in annual revenue, sometimes struggles to find employees to help drive its growth strategies. “It has not been so easy for us to hire workers with digital skills,” says Paulo Grael, the company’s coordinator of management systems, during an interview with Oxford Economics. “Often we find we have to train existing workers to take on more advanced roles.” Zanzini also turns to consultants and third-party firms to fill gaps in its internal workforce – a recurring trend in the research.

A look at two industries included in the Oxford Economics study – manufacturing and retail – highlight the different technology adoption approaches and the contrasting results. Manufacturing firms are the most likely (42%) to be early adopters of technology, and also most likely to be actively hiring employees to support growth (55%) – a strong indication of their commitment to a culture of innovation. They are also most likely to struggle to recruit people with the skills they need (47%), which is leading them to partner with overseas suppliers and vendors (61%), as well as collaborate online with other firms (59%), more than SMEs in any other industry – another indicator of a commitment to innovation.

The research findings show that retailers are less likely to be early technology adopters (26%) than their peers in other industries. This behavior seems to come at a cost: They are more likely to lack the skills necessary to adopt cloud computing technologies (30%) and struggle with encouraging employees to use social media (49%). The lack of these cutting edge technologies has made it harder for retailers to change their internal cultures.

SMEs with leaders who work to ensure that employees understand the benefits of technology, who take ownership of business transformation, and who foster an open dialog about the potential of new technology and its role in enabling innovation will be best equipped to compete – and win – in the global economy.

To read more about this topic, visit our Community Experts Web site and read the think piece, The Human Factor.