Business – 1.3 Size of business – Significance of small businesses | e-Consult

Contribution to Innovation

• Flexibility to adopt new designs, fabrics and production techniques quickly.
• Closer relationships with local designers and niche markets, fostering bespoke products.
• Ability to experiment with sustainable materials and low‑volume, high‑value prototypes.
• Use of digital tools (e‑commerce, CAD) that larger firms may adopt more slowly.

Impact on Competition

• Positive effects: Increases product variety, forces larger firms to improve quality and reduce prices, and stimulates market dynamism.
• Negative effects: May lead to price wars that erode profit margins for both small and large firms; limited resources can restrict scale economies.

Overall, small textile firms act as catalysts for innovation, pushing larger competitors to adapt, while also creating a competitive environment that can be both beneficial and challenging for industry profitability.