Innovate, or take a walk

The IT economy is marginalizing and will permanently shed those who don't bring creativity, curiosity, and invention to their jobs.

Productivity and precision can be outsourced or extracted from the less experienced. Innovation, the ability to conjure genuinely new ideas without the constraints of convention or even practicality, is what will determine whether you climb along with the recovery or slide into the morass of the replaceable.

Mr Smith, you have a lovely MBA and I'm impressed that you managed a 25,000-node migration to Active Directory. But what original thought is in your head right now?

IT is not considered a creative profession, and I don't know if it ever will be. But I can promise you this: if you don't create, dream, and invent, you are a candidate for outsourcing and automation. Great ideas, even if they're just pipe dreams that make other people feel comfortable expressing their own, are now among the most valuable assets on the job market. They can't be transplanted.

If I were interviewing prospective IT staff now, my make-or-break question would be: "Give me one patentable idea that you've dreamed up in the past six months." It wouldn't have to make sense or be related to my business. If we could bat that idea back and forth excitedly and finally have to stop because it was getting late, that candidate's resume would have a spot at the top of the pile.

Conventional wisdom holds that creativity is a genetic trait. If you're not born with it, you can't acquire it. That might be true in some cases, but there is always room for redemption. A career pianist of my acquaintance shows off by transposing songs on the fly or playing them backwards, but she is utterly unable to improvise. When she strains to do it, the result is a stitching together of pieces of the songs she knows. You would probably say that she could never sit down at a piano and just swing.

I say that if I got her stinking drunk on consecutive weekends (under controlled clinical conditions, of course), she'd learn improvisation. Badly at first and perhaps never well enough to perform. But at some future concert, the conductor would do a double-take as she smiled her way through a sonata instead of grimacing, her fingers gently lighting upon unwritten notes that could be heard nowhere but in her head. I'd wager that what the audience heard would have a full-hearted ring to it.

I am certain that substantial good comes from all dreams and innovation, even those that are never realized for profit. If nothing else, there is one consistent side effect of bringing creativity to your job: tt leaks into the rest of your life. When you rise to a place in your career where your productivity is measured in terms of ideas and vision, you'll find an easy continuity between life and work. Driving from a family trip to the zoo to an afternoon at the office won't require a shift of mood or mind-set. When you see something at the zoo that makes you dream up a new line of business or a better approach to a project, you've made it. Go straight to your boss, tell her your idea and that you came up with it while looking at elephants. If she blows you off, set her outsourcing timer to 60 days, and decide what you want from her office.

--------- Just how small is a small business?

It is a well known fact that small to medium businesses are the backbone of the Australian economy. The National Office for the Information Economy (NOIE) estimates that there are almost one million small to medium businesses in Australia, which in turn employ almost five million people. The importance of small businesses as a major source of jobs has not gone unnoticed by government organisations worldwide. As a result, a number of funding schemes and initiatives have been developed to promote small business growth and development. Research about small to medium businesses is also abundant and heavily funded. Yet one fundamental issue still remains unresolved: just how small is a small business?

The diversity of criteria and measures used to define a small business is astonishing. Not only do different countries define small businesses in a variety of ways, but institutions within the same country use inconsistent criteria.

In the Unites States, Section 3 of the Small Business Act specifies that a small business concern is “one that is independently owned and operated and which is not dominant in its field of operation”. However, determining what actually constitutes a small business is reliant on a table of size standards developed by the Small Business Administration (SBA). The table is based on an industry classification system and shows the size standards for various industries. A summary of the table is shown below.

Industry Group Size Standard (Not to exceed)
Manufacturing 500 employees
Wholesale Trade 100 employees
Agriculture $750,000
Retail Trade $6 million
General & Heavy Construction (except Dredging) $28.5 million
Dredging $17 million
Special Trade Contractors $12 million
Travel Agencies $3 million
Business and Personal Services $6 million
Architectural, Engineering, Surveying, and Mapping Services $4 million
Dry Cleaning and Carpet Cleaning Services $4 million

The SBA uses one of three criteria to set size standards for each industry: the number of employees, the annual revenue, or the total value of the assets. For example, a supermarket with annual revenues of US$23 million is considered a small business, while a bank has to hold less than US$150 million in assets to qualify as a small business. In the Air Transportation industry, organisations with less than 1500 employees are classified as small businesses.

However, other agencies in the United States have developed their own criteria and measures to be more closely aligned with their purposes. Congress, for example, has created its own definition of a small business for the purposes of the Clean Air Act. The definition states that “a small business is a stationary source of emissions that: is owned or operated by a person employing 100 or fewer individuals”.

In Australia, the Australian Bureau of Statistics (ABS) has adopted a definition of small businesses based on the number of Full Time Equivalent (FTE) employees. The ABS uses the following size categories for statistical purposes, with the exception of businesses in the agriculture sector:

  • Micro businesses: less than 5 employees
  • Small businesses: less than 20 employees
  • Medium businesses: between 20 and 199 employees

In the agricultural sector, a small business is one that has an estimated Value of Agricultural Operations (EVO) between $22,500 and $400,000.

The Small Business Coalition (SBC) in Australia, concerned about the lack of a standard definition of a small business, commissioned a report from the University of Newcastle to address the problem. The authors of the report, Prof Scott Holmes and Brian Gibson proposed the following definition which was accepted by the SBC: “A small business is a business which is independently owned and operated, with close control over operations and decisions held by the owners. Business equity is not publicly traded and business financing is personally guaranteed by the owners. The business will have less than twenty employees.”

In Europe, the European Commission has defined three categories of small to medium businesses based on the same three criteria used by the SBA in the United States. These are shown in the table below.

Enterprise category Headcount Turnover Balance sheet total
Medium-sized <250
Small < 50
Micro < 10

In Canada, Industry Canada uses a definition that is based on the number of employees. “A goods producing firm is considered ‘small’ if it has fewer than 100 employees, while for service producing firms the cut-off point is seen as 50 employees. Above that size, and up to 500 employees, a firm is considered medium-sized.”

The above examples of small business definitions in different countries demonstrate how much perceptions of small business size vary. But why does size matter so much? The size of a business is an indicator of eligibility for government subsidies and funding schemes. To qualify for programmes available to small businesses, an organisation must satisfy size requirements. Small business criteria also reflect government policies and attitudes towards small businesses. Furthermore, size is important for comparisons. Clearly, a small business in the United States with 1400 employees cannot be compared to a small business in Australia, which has less than 20 employees! This poses a problem for researchers in particular because it makes it more difficult to create a standardised body of knowledge about small businesses that can be used to develop policies and assistance programmes.

Rob MacGregor is Head of the Department of Information Systems at the University of Wollongong. He is the editor of the Australian Journal of Information Systems. Lejla Vrazalic is a lecturer in the Department of Information Systems at the University of Wollongong. She is the co-chair of the OZCHI 2004 conference.

Rob and Lejla have researched and published extensively in the area of small business, information systems and electronic commerce.

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More about ABS AustraliaAustralian Bureau of StatisticsBusiness ACTEuropean CommissionNational Office for the Information EconomyNOIESBATransportationUniversity of NewcastleUniversity of NewcastleUniversity of WollongongUniversity of Wollongong

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