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In the UK, startups and scaleups are facing a Tsunami of economic change that is denting growth prospects. From the Employee Rights Bill to regular jumps in inflation, a 2025 survey from the Federation of Small Business shows SME confidence at its lowest ebb for a long time.

According to a PWC survey, companies who put innovation front and centre grow 16% faster than those who don’t. And a global CEO survey also by PWC, shows that nearly half of all CEOs claim their business won’t be viable in 5 years’ time – without rapid innovation helping to open new markets.

Rayan Jawad, Co-Founder of Growth Studio and Strategy Lead for AIA, recognises that support for early stage businesses right now is vital.

With over 10 years’ experience supporting startups with growth and innovation, he sees a direct link between the appetite for innovation and worrying SME growth prospects without business innovation.

So what are the key ingredients for innovation? How do SMEs engineer innovation practice without spending a fortune doing so?

Here are Rayan’s top tips for driving smarter, faster innovation in these uncertain times – even with limited resources.

“If you believe a large budget is necessary for innovation, you're mistaken. Through Growth Studio, we’ve assisted hundreds of SMEs globally. The ones that thrive are those that act swiftly. Innovation is not about achieving perfection but about speed, mindset, and execution. 

In today's rapid environment, businesses that act promptly remain at the forefront.

Why speed beats size

Large corporations are hindered by their slow pace. Red tape, complex approval processes, and cautious cultures can slow them down. SMEs, on the other hand, possess agility. They can make swift decisions, test new ideas quickly, and adapt when necessary. The quicker you act, the sooner you can seize market opportunities before your rivals do.

Mindset: the foundation of speedy innovation

Speed is rooted in the right mindset. First, adopt a bias for action. Innovation thrives when you act confidently, even with imperfections. Launch an MVP, gather feedback, and refine it thereafter. Second, foster a culture that encourages experimentation. Employees should feel empowered to take calculated risks, knowing that learning from failure is part of the journey. Lastly, instil urgency across your organisation – speed is critical at every level, from leadership to frontline execution.

Balancing innovation and risk

It's vital to balance innovation with risk. Start small while keeping an eye on long-term goals. Pilot projects help gather data, measure outcomes, and refine strategies without over committing resources. This method enables experimentation while managing risks.

Setting clear parameters is also essential. Define the risks and rewards of each project, establish resource limits, and ensure your team knows what success entails. Clear guidelines help avoid excessive risk while encouraging innovative thinking.

Embracing a culture of learning is key to balancing risk. Mistakes are inevitable, but they should be seen as opportunities to improve. When your team views setbacks as part of the innovation process, they'll be more inclined to experiment, leading to faster progress and better outcomes.

Ten practical tips to innovate faster

1. Empower quick decisions: reduce approval layers so teams can act swiftly
2. Launch MVPs: build simple prototypes, test them with customers, and refine them based on feedback
3. Leverage affordable tech: utilise low-cost tools like no-code platforms and AI for rapid development
4. Outsource non-core activities: focus on your strengths and outsource the rest to save time
5. Monitor competitors closely: watch what competitors are doing and innovate faster to stay ahead
6. Use collaboration tools: tools like Slack, Trello, and Zoom speed up communication and project management
7. Automate routine tasks: free up time by automating processes like data entry, reporting, and customer support
8. Gather real-time customer feedback: use surveys, social media, and analytics to quickly understand customer desires
9. Test new ideas in small batches: launch new products or features to a small group of customers before scaling up.
10. Reward speed and initiative: recognise and reward teams that take quick, effective action

Real-world example: logistics SME

A logistics company I worked with transformed its business by automating route planning using machine learning.

Before adopting this technology, their delivery process was inefficient—routes were manually planned, leading to delays, higher fuel costs, and customer complaints. The company decided to test machine learning on a small scale, using historical delivery data to optimise routes for a single region.

Within weeks, they saw improvements: delivery delays decreased, fuel costs dropped, and customer satisfaction increased. Encouraged by these results, they gradually expanded the system across their entire operation. The automated system allowed them to adapt routes in real-time, reducing delays caused by traffic and weather. As a result, the company not only saved money but also improved its reputation, attracting new customers and outperforming competitors who were using manual processes. This example shows that innovation doesn’t have to be risky – by starting small and scaling up, SMEs can achieve significant gains without overcommitting resources.

Overcoming common barriers to innovation

One of the biggest barriers to innovation is the fear of failure. Many SMEs hesitate to try new things because they worry about the consequences of getting it wrong. Failure is a natural part of the innovation process. I’ve seen businesses achieve breakthroughs only after several unsuccessful attempts. The key is to treat failure as a learning opportunity, using each setback to refine your approach.

Limited resources can also hold SMEs back, but this doesn’t have to be the case. Focus on cost-effective solutions that deliver quick wins. For example, using automation and AI can significantly reduce costs while improving efficiency. Collaborating with external partners, such as startups or universities, can provide access to expertise and technology without large upfront investments.

A PWC survey shows one third of global CEOs say Generative AI has increased revenue and profitability over the past year, and half expect their investments in the technology to increase profits in the year ahead.

Resistance to change can be another common challenge. Employees may be comfortable with existing processes and hesitant to try something new. To overcome this, involve your team in the innovation process from the start. Explain the benefits of new approaches and provide training to help them adapt. Recognise and reward those who embrace change, creating a culture where innovation is valued and encouraged.

Innovation isn’t about how much money you spend – it’s about how quickly you can turn ideas into reality. By leveraging your SME’s agility, using affordable technology, and fostering a culture of action, you can outpace even the largest competitors.

And if you need support accelerating your innovation journey, the Amazon Innovation Accelerator – which we helped develop to support SMEs – is designed to help businesses like yours move faster, innovate smarter, and stay ahead of the competition.

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