With the UK back in recession, a new study by the Institute of Directors shows that more than half of business leaders believe economic pressures are forcing British companies to be more innovative to get ahead of the competition.

It’s not the first time in recent weeks that small companies have faced a call to wise up or lose trade. Recently, entrepreneurs were urged by William Hague to get on planes and sell internationally – after effectively being branded as lazy and unproductive. It’s as if small businesses are expected to move seamlessly from fighting to keep the wolf from the door to becoming innovators and export superstars.

According to the research though, such small operators are the best-positioned to make this transition. Businesses with between ten and 100 employees are most likely to capitalise on innovation and this is something the majority of respondents (54 per cent) put down to the freedom to think creatively and a less rigid structure this size of business benefits from.

Businesses with more than 250 employees, on the other hand, are expected to be the least creative despite their larger talent pools and budgets.

Despite the relative agility of small operators though, it is the larger businesses that are most likely to recognise the link between growth and creativity with 73 per cent of this group making the connection compared to 61 per cent of directors with less than ten employees.

When it comes to competing on the international stage, it is encouraging that most business leaders (67 per cent) consider that UK plc measures up well internationally when it comes to creativity and innovation. But if the smallest operators can’t see the need to innovate and think outside the box, it's hard to imagine such businesses being equipped to succeed in such foreign markets. 

See also: Small businesses urged to innovate now