Today many companies uphold the banner of innovation and dream of having Steve Jobs, the mythical founder of Apple, or Reid Hoffman, the creator of LinkedIn, within its ranks, but the basic conditions are not always right for this to happen.

Latin America will not  make it through the next stage of development without innovation at all levels 

That innovation is only a privilege for a minority of big and transnational companies or alleging that the lack of budget represents and obstacle, are some of the myths that regional small and medium-sized companies (SMEs) must stamp out to address this challenge.

Innovation as a business process consists of identifying market opportunities that lead to the introduction of new products, services, processes or to the modification of current ones. It implies developing capacities and doing away with traditional means of doing business.

To innovate is to gear the business towards opportunities in current markets and in new ones that are opening due to globalization. Competition in the international arena challenges SMEs to innovate because it often requires having to adapt to technologies and make effective investments, which is generally postponed when operating solely in the local market.

In his book "Create or Die", journalist and anchor Andrés Oppenheimer states that Latin America will not make it through the next stage of development without innovation. After almost a decade of economic growth, he believes that it will be very difficult to make it sustainable if competition is not improved by innovating at all levels, both through new technologies and through generating value in traditional processes and industries.

A group of researchers from the School of Engineering of the National University of Lomas de Zamora in Argentina concluded that SMEs that implement innovative activities achieve better competitive performance than those that don’t. Hiring consultancy services, acquiring technology and focusing on external markets are some of the innovative activities that position these companies.

The process of innovation for SMEs is generated through different channels that are not necessarily related with research and development (R&D) costs or budget. Tacit knowledge, informal efforts and incremental improvements acquire a higher relevance compared to bigger companies. The efficiency of these channels depends on the competitive context in which they operate, the capacity to effectively relate to the economic and institutional environment, and access to more formal processes of innovation.

Innovation environment

Oppenheimer talks about creating a culture of innovation, an environment that produces collective enthusiasm for creativity and glorifies productive innovators in the same way as with artists and athletes. There are many ways of achieving this, from human resources policies to communication campaigns to establishing prizes and competitions. The main thing is to reduce the fear of failure.

Molecular biologist specialist Estanislao Bachrach, professor of Leadership and Innovation in the MBA program of Torcuato Di Tella University in Buenos Aires, affirms that creativity can expand in a way that new projects will not have to depend only on talented individuals but on everyone thinking creatively. Setting time aside for training, looking towards the future and thinking about how to differentiate ourselves are some of the conditions.

A new trend in the search for innovation is for companies to promote hiring staff from other disciplines to generate diverse thought and a differential analysis of processes or the business itself. This is how biologists, doctors, anthropologists, actors and athletic trainers are entering the business world.

However, it is not always necessary to search outside and less so when a small company is involved. Eduardo Sánchez, business anthropologist and Google advisor recommends encouraging positive deviation of innovators within a company. "Somewhere within the organization there are groups of individuals that are doing things different and better. Find them and add fuel to their fire”, he adds.