Small businesses are really excluded from the global economy

Small businesses from many different industries, both traditional and hi-tech, have discovered a new way for them to succeed in the "global economy".

It involves collaboration on large proposals, R&D and fulfilment of orders assisted by relatively low cost, virtual collaboration technology.

Traditionally many small businesses join supply chains centred on larger companies.

Unfortunately the companies at the bottom of such supply chains are often treated as commodity players and replaced with cheaper alternatives when the opportunity arises.

Some brave small businesses have attempted to "go it alone" by creating sophisticated internet e-business architectures which directly link them to their major customers and partners.

However the expense, risk and sheer management effort involved in this approach puts it beyond the reach of most.

Virtual Enterprise Networks (aka VENs) give small businesses scale

The "third way" which companies are discovering is to join "Virtual Enterprise Networks" or VENs with other like-minded but complimentary businesses to market, sell and deliver collective offers to the market beyond what the individual companies could offer by themselves.

In addition these VENs are also undertaking significant collaborative product development work, often in partnership with applied research institutes and universities, which would be beyond the reach of the member companies individually.

For example, a group of UK Engineering companies are using the VEN approach to collectively bid for many-million pounds of work per annum from a large European Customer. Like many corporates this customer has a supply chain rationalisation (aka small supplier reduction) programme which would stop them dealing with any of the companies individually.

Another example is a group of Swiss component manufacturers who used VENs to move up the value chain away from contract-specific components to branded product solutions in the face of stern cost-based competition from Czechoslovakian companies exporting into their home market.

A third example is a group of Mexican manufacturers who used a VEN to support their entry into a new, more sophisticated market (the US).

So what exactly is the "Value Proposition" for a VEN?

A VEN connects businesses into peer networks that are supported by appropriate technology to give them the capabilities and competitive advantages of global enterprises particularly: