New SME study highlights barriers to innovation

The latest EU report on SMEs highlights the struggles of the sector as a result of Covid-19 as well as looking at the potential for digitisation.

From the EUIPO’s perspective, the analysis of the barriers to innovation is particularly interesting, given the Office’s initiatives, in cooperation with national and regional IP offices and the European Commission, to support this vital group.

The European Commission Annual Report on European SMEs 2020/2021 covers everything from the definition of SMEs to their performance during the pandemic and their prospects.

As regards innovation, it finds that almost six in ten (58%) SMEs have introduced innovation in the past 12 months with the most common changes covering new or significantly improved products or services(25%); introducing an innovation with an environmental benefit (21%); or introducing a new way of selling their goods or services (20%). Almost one in five (17%) have introduced social innovations.

We know that fewer than one in ten EU SMEs have any registered IP right, even though companies that do have IP rights perform better economically

Over 70% of the SMEs reported one or more barriers to innovation including problems predicting the market response (35%), the legal or administrative environment (31%), a lack of financial resources (also 31%), or a lack of skills (22%).

At least one in ten mentioned a lack of technology infrastructure (15%), a lack of collaboration partners (14%), or difficulties with protecting intellectual property (10%).

The results add further detail that will help build strategies to help this important sector, which has been hard hit by Covid-19 with most small businesses reporting large declines in sales. We know that fewer than one in ten EU SMEs have any registered IP right, even though companies that do have IP rights perform better economically, pay higher wages and are generally more resilient.

That’s why we have been financially supporting IP advice as well as applications for trade marks and designs at national, regional or EU level under the Ideas Powered for Business SME Fund. A window for applications is open until the end of this month. There will be further opportunities to take advantage later this year and we are working with the Commission and the IP offices on an expanded multi-annual scheme for future years.