Research in the International Journal of Value Chain Management sheds light on a blind spot in how society is tackling complex problems such as climate change, inequality, and food insecurity. There is, the work found, an underrepresentation of small and medium-sized enterprises (SMEs) in public innovation strategies. The researchers focused on the Uppsala region of Sweden and investigated why SMEs, which are often key sources of innovation and adaptability, struggle to engage with the kind of mission-orientated innovation that could help us address the big challenges we face.
Such challenges are large-scale, interlinked societal issues that cannot be solved by a single actor or sector. So, mission-oriented innovation, a framework being used increasingly by governments and institutions worldwide, breaks up the big challenges into smaller measurable missions. Rather than pursuing incremental technological development or narrowly defined market goals, mission-oriented innovation brings together public authorities, the private sector, and civil society in pursuit of transformative objectives. Such missions might include achieving carbon neutrality in city transport or eliminating food waste in national supply chains.
This research suggests that SMEs have all but been forgotten in defining mission-oriented innovation and yet the participation of SMEs, because of their size and flexibility, could be massively beneficial. Through interviews with the owners of SMEs and public sector representatives, the researchers found that there are three structural barriers to the inclusion of SMEs in mission-oriented innovation.
The first is a lack of awareness among many SMEs. This could be address through more effective communication from government bodies and coordinating agencies. Secondly, SMEs face constraints related to resource allocation. With a smaller workforce and tight budgets, these businesses often cannot afford the time nor the investment to participate in longer-term innovation missions. Public actors could solve this by prioritizing appropriate funding mechanisms or institutional support. Thirdly, there are domain differences. These are cultural and operational mismatches between the public and private sectors. Public institutions and SMEs often approach problems with different timelines, risk tolerances, and definitions of success, making sustained cooperation difficult.
As such, there is an urgent need to put in place mechanisms to bridge the gap between SMEs and public missions so that governments can bring a part of the economy into plans for the systemic change needed to address big issues.
Strömqvist, J., Hilletofth, P., Muhos, M., Saarela, M. and Virkkala, P. (2025) ‘Barriers of SME engagement in mission-oriented innovation’, Int. J. Value Chain Management, Vol. 15, No. 5, pp.1–23.
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