SMEs prove fertile testing ground for technology

IN 1517, Martin Luther had a radical idea and courage.&nbsp;His investigation of the scriptures led him to reject outright that salvation could be purchased.&nbsp;His stand against the Catholic Church initiated the Protestant Reformation.&nbsp;He became an outlaw.<br /><br />But Luther&rsquo;s ideas would have gotten nowhere if Gutenberg decades earlier had not invented the mechanical printing press.&ensp;Gutenberg&rsquo;s Bible and Luther&rsquo;s subversive ideas changed the course of Western civilisation.<br /><br />Behind every new product is an idea &ndash; an insight into consumer behaviour or a need identified - which gets proven or not &ndash; in the market.&ensp;The best product doesn't win however.&ensp;The best product with the best distribution does.&ensp;Again, Luther without Gutenberg would have been a mere footnote.<br /><br />SliceThePie, a financing engine for unsigned artists, received &pound;1m of investment in January 2009.&ensp;CEO David Courtier-Dutton said: &ldquo;We&rsquo;re going to get very big by staying very small.&rdquo; With the &pound;1m, he cut himself a global partnership deal with Bebo giving them profound distribution of their product. He didn&rsquo;t need to raise capital to build distribution; his novel product enabled him to be the partner of choice for Bebo.<br /><br />Carlotta Perez, a Venezuelan economist, argues in her book, Technological Revolutions and Financial Capital:&ensp; The Dynamics of Bubbles and Golden Ages, that each revolution has a double nature: first explosive growth, the second modernisation and rejuvenation of the mature industries.<br /><br />So technology explodes into the market and is somewhat deployed but then a second opportunity &ndash; &ldquo;the golden age&rdquo; &ndash; arrives where the technology is fully exploited throughout the society which surrounds it.&ensp;So cars in 1912 would beget roads, suburban development, and malls.<br /><br />So while technology is the driver of economic growth, how society embraces it determines the benefits which are received.&ensp;Each revolutionary cycle takes 50 to 60 years.<br /><br />The new communications technologies in particular are spawning not just new industries such as mobile banking and voice communications, but levelling the playing field with the SME.&ensp;The rise of the SME is how society is embedding new technologies into our daily life.&ensp;&ensp; Previously, the SME was at a disadvantage vis-a-vis his corporate competitor.&ensp;No longer &ndash; they are becoming sophisticated, and in turn, offering distribution power to new products.<br /><br />Companies like Transglobal Payment Solutions enable the FD of an SME to have international payment and treasury capabilities that only corporates would have had.<br /><br />Watch for a whole host of new services targeting the SME, and companies such as Sage, who have historically serviced SMEs well, will have an unfair advantage.<br /><br />Julie Meyer is the CEO of Ariadne Capital and the founder of Entrepreneur Country.&nbsp;SliceThePie is a portfolio company of Ariadne.