Small business innovation in the hostile environment of Australia's drought stricken rural communities

Abstract

The study examines innovations implemented by small businesses in rural Australia to overcome the effects of the drought. Focus group meetings with a total sample of 32 owner/managers in six rural communities revealed that the innovations were generally small, incremental and associated with daily operations. They were aimed at protecting or growing markets, accessing resources and operating efficiently. These innovations were necessary to conserve scarce resources in an environment of declining markets and tight profit margins. Despite this general trend, some innovations were significant. These were radical in nature and took the form of organisational restructuring and market development through mergers and acquisitions, and product and market diversifications. They were highly risky but made notable contributions to the communities. Good and careful planning and access to resources can help mitigate some of the risks associated with these high end innovations.