In April the Business Barometer Survey included two questions related to the development of new products and services. They focused on whether respondents actively seek opportunities to develop new products and services, and what the main motive is for developing new products and services. This months questions looks at factors surrounding new or improved products and services introduced over the past two years.
Over 80% of respondents have introduced new or improved products, processes or services over this time period and for 13% of them, over 50% of their changes have been purely design related. 14% also said that between one quarter and a half of their changes have been purely design related.
When asked to focus on the most significant new product, service or process 17% had introduced something that was completely new, i.e. not introduced by any other businesses before. 26% of respondents had brought in something that, although new to their own business, was already available from others in their sector, and 42% had made changes to an existing product, service or process, with 30% providing improvements and 13% making some other sort of change.
During the course of development of changes to existing, or the introduction of completely new products, services or processes, there are numerous factors to be taken into account and a large range of external potential sources of advice. Respondents indicated that many of them have sought external advice, on average on 2.0 issues. The most frequent consultations were about Software, Marketing and Technical each with just over 9%. Design, Protecting patents, copyrights and trademarks and Networking groups all received between 8% and 9% of responses, with Advertising and at just less than 8% .It was rarer to consult externally about costing or business plans or contracts with external experts and staff and customer feedback systems were also rarely used.
The parallel UK Business Advisers Survey (UKBAB) asked advisers what kind of advice their clients most commonly asked for in connection with the introduction of new products, services or processes and the results are included in the chart below. On average, advisers selected 4.1 topics and the most frequent response was Marketing, with 18%, followed by Protecting patents, copyrights and trademarks, and Business plans, both with 16%.
The intellectual property rights that respondents have most sought advice on have been Copyrights and Patents each with 13% of total responses. Trademarks received close to 12% of the response but amongst the 24% of respondents who have sought advice on any of the four aspects of intellectual property many have asked for more than one type of advice so there is strong overlap. Registered designs received the smallest response with only 6%.
Advisers were asked which type of intellectual property rights their clients have sought advice on. On average, advisers have been asked for advice on between 2 and 3 out of the four categories. Again, registered designs were the least frequent response at 19%.
Consultation of external experts is not prevalent among UKBB respondents. 39% either found this question not applicable or responded with none. The remainder, those who have used experts, have consulted between one and two types of expert on average, the most frequent being Marketing experts with 11% of responses, then Graphic designers and Software designers with between 10% and 11%.
The UKBAB survey asked advisers which types of expert they have recommended to businesses seeking external design input in developing new products. Graphic designers (15%) and Marketing experts (16%) received most responses, with University experts and Branding consultants receiving 10% and 9% respectively.
26% of responses indicated that respondents had sought advice about external finance for developing new products, services or processes, while 10% showed that advice was sought about financing within the business for this purpose.
There are many potentially inhibiting factors preventing the introduction of new products, services and processes and respondents were invited to select all that apply to them. Excluding those who responded with 'not applicable', don't know' and 'none', respondents selected an average of 1.9responses. Lack of time accounted for 21% of the responses, while 11% of responses showed that high development costs are also important. Further factors with relatively high responses rates were Risks involved, Access to internal finance and Access to in house skills each with 7.6%.
The UKBAB Survey asked advisers to draw on their knowledge of working with businesses to say which of the listed factors limits businesses' ability to introduce new products services or processes. Lack of time and Risks involved both had 12% of the responses and Too high development costs 13% while Access to external finance (loans or equity) and Lack of new creative ideas received 10%. The average number of responses made per respondent to the UKBAB was 4.7
Constraints on business due to skill shortages increased slightly during the second quarter of 2005. Although constraints on businesses with turnover over £3M p.a. actually decreased over the time, businesses on lower turnover categories increased compared to their previous quarter's levels. By sector, skills constraints on distribution decreased, while those on both production and services were higher.
There was a small upwards change in the level of constraint due to lack of finance over the April - June quarter. Among firms with turnover of £1M - £3M the increase in constraint was the largest, with small increases in constraint in businesses with turnover in the <£1M and >£3M ranges. By sector, small increases in constraints occurred in distribution and also in services, with a decrease in the production and manufacturing sector.
Overall constraint due to low market demand decreased during the June quarter. Production and manufacturing and Services sector businesses experienced decreases in constraint, while those in the Distribution sector found constraint from low market demand had increased.
Average growth in the last quarter picked up a little compared to the previous quarter, with more firms reporting expansion than those reporting decline.
Respondents are more pessimistic on average about the next quarter's growth, although those with turnover between £1M pa and £3M p.a. think there will be a small positive change in rate compared to their expectations three months ago.
Listed below are extracts from feedback received in Survey
Views expressed are those of individual panellists and may not represent those
of the University.
As an intermediary, my comments are based on general client comments for my Cumbrian client base. Innovative products, unlike many other business needs, require funding for development, prototyping, manufacturing etc. Specific innovation 'hard cash' grants for SME's appears is experiencing very low availability in UK at the moment.
Why do you consider that we could no introduce new processes and products at the same time?
Renewal of my Care Home insurance policy has led this year (and last) to a further 'inspection' process by my Insurance Company. They dissected my latest Inspection report and interpreted every comment as a potential increase in risk to them; I then had to complete a long list of questions to satisfy them. I'm already grossly over-inspected, and this is now yet another, if informal, layer of regulation. Also, my premium has had a huge hike in the last three years, I cannot find another insurance company in the marketplace to quote for me, (they're only interested in the big boys with big money)so I'm trapped in a monopoly. Nearly time for me to emigrate to Ireland and live up a mountain somewhere.