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5.4 How to overcome barriers

 

To address all these barriers, certain solutions can be suggested. They may consist of actions of governments on national or regional level such as creating national or regional networks of business incubators and scientific parks. When the appropriate infrastructure and business environment is provided, companies find it easier to cooperate.

As for the level of companies, most importantly, is providing the adequate information on the forms and benefits of collaboration. It will help to change the attitudes towards cooperative projects and assure their execution. Moreover commonly mentioned barriers where connected with lack of knowledge on where, how and with whom to collaborate. What can be useful in such cases is the creation of pockets of best practices, relevant for certain industries or companies from certain sectors. Developing the collaboration efforts through already established nets of contacts, regional and industry associations can be another solution to find partners and common points of interests.

In many countries lack of trust among different actors is very visible. Companies do not trust their competitors and are afraid to reveal information about their company, which is very often required when collaborating. To overcome trust problems, all the partners of collaboration efforts should have a clear idea about the potential benefits of the joint project for their company. Although such situations represent a traditional prisoner´s dilemma, emphasize should be put on the repeated character of the interaction between the actors. If the companies adopt a long time horizon and perceive cooperation as a constant way to improve their business, it will be in the best interest of all of them to be loyal to their partners.

Furthermore, the lack of trust among the competitors can be avoided by seeking partners among companies, with whom you don’t compete directly, or even the ones that offer products complementary to yours. Then joining efforts in production or distribution processes is often a natural action enabling both parties to explore the economies of scale.

Coming down to a more specific level of SMEs, the example of collaboration benefits can be:

  • Reduced or diversified financial risk when performing joint investment effort
  • Reduced risk when launching new product or introducing new service to market
  • Possibility to share costs when performing common production, marketing and distribution activities
  • Increasing the speed of introduction of new products or services to market by joining R&D efforts
  • Shortening the delivery time by merging the distribution networks or using the distribution channels of the partner with a further developed network
  • By closer cooperation in the area of the supply chain, the inventory can be decreased – working with more suppliers can help to reduce the amount of stocks and lead times
  • Business cooperation can open up new geographical markets – by forming partnerships with local companies, acting as representatives, new countries can be accessed
  • It can also open up for new market segments – collaboration with companies, typically associated with certain type of clients, can help to reach this new segment
  • Joint marketing of some products can also help to reach higher sales levels for both parties
  • Joint production efforts can help to increase assets utilization – partners can make best use of their resources , receive the highest possible return, by putting them into the most profitable activity
  • The quality of products and services can be increased by joint efforts in R&D activities and also by getting a better qualitative and quantitative response from the market (it will happen through increased distribution and marketing actions)
  • The quality of the process can be improved by adopting the best practices of the partners or by jointly developing new processes
  • Companies working together are characterized by greater flexibility and responsiveness to market signals, since they account for a broader resource base and a greater market potential
  • Business collaboration enables skills and knowledge transfer among the partners in all the business areas, it also makes it possible to develop new skills and knowledge by working together
  • Business collaboration for SMEs is often the only way to achieve the critical mass to enter the new market/new market segment
  • The specific barriers to collaboration of SMEs can be:

  • Too time consuming
  • Lack of collaborative opportunities
  • Uncertainty of outcomes
  • Lack of contacts
  • Lack of visibility on interesting areas to collaborate in
  • Too costly
  • Lack of tools or knowledge on how to collaborate
  • Lack of public support for collaboration
  • Lack of trust
  • Lack of access to sophisticated partners
  • Need for commitment for long period of time
  • Need of allocating substantial resources to collaborative projects
  • Need for control of the process of collaboration
  • Lack of motivation to collaborate
  • Here we offer some suggestions for you to overcome the barriers:

  • Adopting a long-time perspective
  • Perceiving your business partners as potential partners not competitors
  • Looking for companies with shared interests (partners who want to approach the same type of clients by selling them a different or even better complementary product)
  • Building networks and take part in associations – these can be sources for potential partners in future collaborations
  • Building long-term business relationships
  • Looking for positive examples of collaboration in sectors and business areas relevant to yours
  • Organising common initiatives for the companies in the sector – trainings, seminars and conferences can be helpful to gain more knowledge of the possibilities of collaboration and to overcome the trust issues
  • Education and training efforts in the area of collaboration, especially the potential benefits
  • Learning, getting more information about other companies in your business area and other relevant sectors
  • Learning about and using the financial schemes supporting collaboration
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    This is a great program, i would recommend this program to one and all.

    Ian Sayers
    Giant