Use of social media in SMEs to derive the innnovation and business growth
Introduction
Small and medium enterprises (SMEs) are globally known as the powerhouse of economic growth and development, as higher proportion of global enterprises are categorized as SMEs. SMEs are regarded as the key of creativity and innovation and their definition varies largely across geographies. The main criteria used for classification of SMEs are linked with number of employees and extent of investment in assets and capital (Dasgupta, 2021). For instance, in European Union (EU) SMEs have lesser than 250 employees and they comprise of 99% of all enterprises in EU (Bartolacci, Caputo & Soverchia, 2020). Based on their larger contribution towards economic development at global level, the innovation of SMEs is of huge concern for both researchers and practitioners. Innovation is no more regarded to be confined to large corporations and SMEs
Innovation in products and services is linked with the implication of new and creative ideas in design, outlook, features or functionality of the products and services with certain degree of uncertainty (Kwon et al., 2021). According to the theorists of diffusion of innovation, innovation is communication based whereby its information is shared across social actors in specific time. The social media provides platforms for communication about innovative ideas which then supports implication of new ideas within SMEs and contributes in better SMEs performance (Franco, Haase & Pereira, 2016).
Papa et al. (2018) mentions that social media is highly interactive platform which offers prospects of continuous interaction, communication, sharing, co-creation, and exploration of user generated opportunities by individuals, collectives and organizations. Some of the most widely used social media platforms are Facebook, Twitter, Instagram, Xing, Google+, YouTube and Picasa (Muninger, Hammedi & Mahr, 2019). Likewise, online forums of companies dedicated for open discussion of customers about products and services are also recognized as social media platforms. These platforms are increasing deployed by businesses for the purpose of collaboration and knowledge sharing with consumers as well as actors within external environment (Fan et al., 2021). The reliance on social media contributes in enhancement of firm’s value, innovation capabilities and overall improvement in products and services. According to Glavas, Mathews & Russell-Bennett (2018) one of the advent of social media is to obtain insight about customers’ views, concerns and preferences, which were not captured well by using either quantitative or qualitative methods of traditional marketing research. The social media, on contrary to traditional communication methods, allows to hear voice of customers (Cheng & Shiu, 2019). Customers generate their voice in the form of product and service reviews, micro blogs, discussions on social media forums, digital videos and podcasting, whereby highlighting their preferences about the specific product and service (Braojos-Gomez, Benitez-Amado & Llorens-Montes, 2015). This content then serves as the way to generate new and creative ideas that drive innovation of product and service through upgrade as well as new product and service development.
SMEs are highly concerned about new product development based on exploitation of innovation opportunities. The product development begins with the idea generation and is followed by development and commercialization of new product (Cui & Wu, 2016). The development of new products might be supported by development of new methods, tools and techniques which allow to improve the quality and features of newly development products. Likewise, the new service development is linked with improvement of quality and features of service which add newness to the service and address concerns of consumers (Rakshit et al., 2021). Development and advancement of products and services, demands the SMEs to become able to solicit feedback of customers (Cui & Wu, 2017). The recent research and trend analysis indicates that consumers prefer to provide feedback through social media, as it is the most interactive and quickest way to coordinate with companies producing products and services (Kraus et al., 2019). However, it is notable that not all SMEs can promote product and service upgrade through social media, as they do not create methodologies which could align social media with their specific innovation targets. The literature further highlights that reliance on social media through inclusion of customer centric focus, customer engagement focus and integrated social media interaction, is important for utilizing social media for product and service development innovation in SMEs (Rakshit et al., 2021).
Research Questions
RQ1: How social media is shaping SME innovation?
RQ2: What factors contribute to social media adoption by SMEs to enhance the performance?
RQ3: How can SMEs use social media for customers’ involvement to foster new product and service development and enable SMEs innovation?
