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Simple Solutions: How Competition and Innovation Power Businesses
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April 13, 2022
Competition and innovation are at the forefront of every business model. But what happens if your business runs up against technology standards?
Need to Know
What are standards?
Technology has taken over small businesses and become essential to daily work—so much so that we utilize industry standards to streamline workflow.
“For most businesses, standards should be treated like any other business decision: with businesses doing research beforehand,” Timothy Simcoe, professor of strategy and innovation at Boston University, recently told me.
But what do innovators who go outside of those norms do when they come up against Big Tech or patent holders? Let's break it down.
Standards, according to Simcoe, are basically a “shared language that technologies use to communicate with one another.” In today’s digital world, we see standards in everything from microprocessors to software.
“The complicating factor is that standards aren’t all equal,” Simcoe said. There are two types of standards: open standards, which encourage innovation and competition, and closed standards, which are private.
Standards are good: they help power a lot of our world, and companies can compete within the standard, “which creates product innovation and competition on price,” Simcoe noted.
Competition and innovation
Standards usually promote competition and innovation, according to Simcoe. But sometimes patents and standards are a dangerous combination. Innovation is cumulative, especially in digital technology, but companies can hold up competitors by holding patents and stymying innovation.
So how does this influence small business? Well, technology like barcode scanners, point-of-sale systems, and accounting software is all backed by patents. And technology firms need to be able to compete and innovate to create better products for your business.
The role of small businesses
Most small businesses won’t ever have an issue with patents or standards. As more businesses turn to technology, standards will continue to become a more prevalent part of our work experience.
“The standards are more valuable the more people adopt them,” Simcoe said.
He explained that it’s important for business owners to “be aware” of current standards and “think of it like any other purchase where you want to know about long-term support, reliability, and ownership and risk.”
Many businesses use standards to keep track of inventory with barcodes:
- What are the different barcode types?
- Barcode scanners allow you to track inventory.
- Barcode scanning software can help you stay organized.
The must read
Ready to see people in person again? We’ve got you covered with a list of the best small-business conferences to attend this year, from Boston to Las Vegas. Conferences can be a great way to network and learn how to grow your business.
But conferences aren’t the only way to network and spread the good word about your business. We also recommend joining local organizations and being active online—following Business.org on LinkedIn and Facebook is a great first step.
Thank you for reading. We’ll see you next week.
- Alex and the Business.org team
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