COMMERCIAL PROFILE - INTERTRADEIRELAND:Identifying unmet market needs is central to InterTradeIreland's new pilot programme which aims to increase innovation in small and medium-sized businesses

A NEW pilot programme from InterTradeIreland is aimed at assisting small and medium-sized firms to innovate and meet identified but as yet unmet market needs. The Innovation Connections Programme takes a strong innovative approach in itself and reverses conventional processes. Instead of helping companies to develop existing products or services or develop new ones that it believes there may be a market for, it begins with identifying what the unmet market needs might be and establishes if there is value in companies seeking to meet them.

The pilot programme is focused on the civil security sector and will involve SMEs participating in practical workshops where the innovation process will be explained and where they will be helped to work through how they could develop solutions to meet the identified unmet needs of the sector.

The civil security sector has been chosen because it is a tightly regulated market and not an easy one to supply. "We have taken a difficult regulated market because if the programme works there it will certainly work in other less regulated sectors with fewer barriers to entry," says Sean McNulty of Innovator, the consultancy operating the programme on behalf of InterTradeIreland.

It has also been chosen for the scale of the opportunity it represents. Security is a significant cost to operators, especially at ports and airports, with many regulatory compliance obligations. At European level, costs from the implementation of security regulations, have run into hundreds of millions of euro.

The worldwide security compliance and control market was valued at approximately €5 billion in 2005 and is forecasted to grow to €10.3 billion next year. The European Framework 7 Programme for Security has a budget of €1.4 billion over its five-year period, targeted specifically at research in this area.

"This is a unique initiative targeted at the civil security market in Ireland," says Aidan Gough of InterTradeIreland. "We are trying to encourage open systems of innovation among companies across the island of Ireland. While it is a unique programme it is actually an extremely simple concept, but sometimes the best concepts are the most simple.

"We are speaking to all of the large users of solutions in the civil security sector and getting them to define what their unmet needs are. Then we are bringing these needs to the SMEs who participate in the programme."

Also involved in the programme is the Centre for Irish and European Security (CIES) which is an organisation focused on civil security policy and strategy in Ireland and Europe and is working with ITI on the project.

But there is a lot more to establishing what unmet market needs might be than standard market research. "Understanding user needs is not the same as conducting market research," says Sadhbh McCarthy of the CIES. "While traditional market research involving focus groups and questionnaires and so on is useful, to test product or service concepts with potential customers, user-centred research is better for determining what needs are not being met with current solutions, identifying what real needs customers and consumers will have in the future and identifying their expectations of solutions to meet those needs."

McNulty describes this as ethnographic research. "What we do is find out what the problems are with current solutions," he says.

"Market research tells us what market need is but it also tells your competitors the same thing. Ethnographic research tells us what the market needs are that are not being met or are unknown at the moment. In many cases the end user isn't able to tell you what they need because they don't know it but this form of research is able to identify it."

An example in the security sector is airport baggage checks. One solution might be to check every bag by hand and another might be to use highly advanced electronic scanners.

Both work but one offers distinct advantages over the other in terms of speed and long-term costs. If the operator isn't aware of the existence of a new type of scanner they won't identify that as a need - they might instead complain about the slow process of checking bags. Ethnographic research is aimed at uncovering the problem and translating this into an identified unmet market need.

The aviation security sector has been chosen specifically for the pilot programme because Irish companies haven't really tapped into this market as yet. "We have already carried out much of the research in the market," says McCarthy. "We have spoken to airport operators and we have met with all of the security end users including the Dublin Airport Police Service, the Garda, the PSNI and so on. They are naturally very sensitive when it comes to talking about their needs, they don't want to advertise their vulnerabilities, but we have been able to identify a lot of unmet needs."

The process has thrown up a listing of more than 50 of these unmet needs which the teams on the InterTradeIreland programme have put through a further process known as ideation. This is the process of forming and relating ideas. "We take all of the information we get and we work it back and try to generate six to 10 business opportunities from them," explains McNulty. "We then take these to the workshop with the participating SMEs and work through them further."

This is where the participating companies come into contact with the innovative concepts and business opportunities. "Security is a really untapped market in Ireland," says McCarthy. "In Europe lots of companies specialise in this area but we have no history of it in Ireland. Large companies who use security products and services need SMEs because they are very agile and good at adapting to the needs of their customers. We are bringing the opportunities to the SMEs and showing them how they can avail of them."

The ITI-run programme involves two separate days of workshop sessions with participating companies doing further work on what they have learned between the sessions. The first day involves giving the participants an understanding of the process. "The best way to develop innovation capabilities is to undertake hands-on activities which both demonstrate and trial the innovation process," says McNulty. "SMEs on the programme will be shown how uncovering customer needs can reveal innovative ideas and they will be helped to work through how they could develop solutions to meet those needs."

This meets the criticism that all too often SMEs are presented with supposedly "tried and tested" programmes which have been used by larger enterprises. It is difficult to scale these processes down to suit the capability of the average SME.

"SMEs tend to be very good at commercialisation, they are not that good at identifying unmet needs and innovating to fulfil them," says McNulty.

"On the second day we will look at how the companies can work on their own business models and innovation capacity for the future. Any firms who wish to pursue any of the opportunities identified and take them further will be able to go to InvestNI or Enterprise Ireland for assistance at the end of the programme."

If the pilot is successful, the programme will be rolled out progressively to other sectors throughout Ireland.

To participate in the Innovation Connections Programme companies should have a minimum of eight people in full-time employment. For more, contact Sheila McAneaney on 048-283083 4131 or see InterTradeIreland.com