Innovation – the secret of success

"I believe that the opportunities for stronger ties between Canada and Finland are immense," says Perrin Beatty, President and Chief Executive Officer of Canadian Manu-
facturers and Exporters (CME).

"Given the relatively small size of the Finnish market and the fact that our two countries compete in many resource-based sectors, this should not dissuade us from exploring opportunities for greater trade ties through bilateral and multilateral agreements."

The Honourable Perrin Beatty was the keynote speaker at the Canada Luncheon hosted by the Canadian Embassy and the Finland-Canada Business Club on May 15. Vaahteranlehti published some excerpts from his speech, "Canada's Innovation and Entrepreneurial Spirit."

The essence of innovation

Innovation has been a major topic of debate in Canada, particularly over the past two years. In the fall of 2001, Canada announced the launch of a National Innovation Summit focused on identifying key initiatives for governments, businesses, academic institutions, and even associations like mine to improve the environment for innovation and enhance our country's competitiveness.

As a major contribution to this strategy, CME released a research document in the summer of 2001 entitled "The Business Case for Innovation." At the heart of this report were business' innovation priorities, the first of which are entrepreneurial management and world-class management.

But what does that really mean?

First and foremost, it means enhancing value for customers, meeting new customers' expectations and becoming an integral part of customers' success;

• It also means improving information management, operation and production processes;

• It means strengthening competitive intelligence and managing finances in a way that exceeds investment horizons;

• It means creating opportunities for personal, as well as corporate growth;

• It means strengthening processes of change management and enhancing entrepreneurship and risk management skills;

• It means creating a learning culture and strengthening problem-solving capabilities throughout business organisations;

• It means sharing and demonstrating best business practices and management techniques;

• It means increasing awareness within the business community about the importance of innovation and changing market conditions; and

• It means ensuring that companies, as well as governments, make innovation a key part of strategic planning.

Every business begins as a small business

The process of innovation is enormously complex. Innovation is about investment, in both capital and people. But such investments must be made strategically and be focused on improved productivity and customer value.

Most of all, effective innovation is focused on the leadership requirements – the vision, the entrepreneurial drive, and the appetite for risk – that build business success. This is particularly true for smaller and mid-sized enterprises, which are the backbone of most industrialized economies.

Every business, no matter how large, begins as a small business. Every business begins with an entrepreneur who has an idea and a dream. And every entrepreneur, sooner or later, is confronted with the challenge of how to grow successfully.

The principles of more productive growth

CME suggests that there are three primary ways to help entrepreneurs and small businesses grow more productively:

• The first is to provide entrepreneurs with more effective tools to invest their capital more productively in value-added processes and machinery;

• The second is to encourage small businesses to expand their marketplace and eventually become more export-oriented; and

• The third way is to make it easier for SMEs to adopt new technology and invest more in research and development.

Industry cannot take a business-as-usual approach any longer. Companies will succeed or fail based on their ability to innovate, drive up value, and reduce costs through the use of new materials, new processes, and new information systems. Today, it is the bottom line that counts, because cash flow drives investment and higher profit margins lead to faster rates of capital turnover, business expansion, and employment growth.