Fostering Innovation and Entrepreneurship in Small and Medium Enterprises (SMEs)

Abstract

Most of the SMEs in this decade have dealt with a difficult market environment and the present financial crises around the world. This has weakened the position of SMEs innovations particularly in markets where international producers have been able to provide low-cost products which are a threat to the existence of competitors. This research focuses on Innovation and Entrepreneurship in Small and Medium Enterprises (SMEs). The survey method was adopted. The quantitative research design was employed. The study population refers to the entire number of employees in the six selected SMEs in Lagos state Nigeria. Yamane formula was used to determine the sample size which consists of one hundred and seven (107) employees out of the one hundred and forty seven (147) employee population of the selected SMEs. The simple random sampling technique and the face validity approach were adopted. Towards this end, the test re-test reliability approach was adopted for the convenience of the researcher. Reliability was ensured by test re-test which yielded r = 0.69 and internal consistency was measured by Cronbach Alpha of 0.885. The data was analyzed using manual and electronic based methods through the data preparation grid and statistical package for the social sciences, (SPSS). The study made use of statistical tools such as (ANOVA), correlation efficient and regression analysis in testing hypotheses where applicable. The findings from the two hypotheses revealed that product innovation and process innovation influenced SMEs performance significantly. Enterprises should create their own ideas in the model of innovation and then build, develop, distribute, and sustain these ideas. It has shown in this research that innovation in SMEs is affected by financial resources deficiency, limited prospects for recruiting dedicated workers and innovation portfolios that are small in nature. The study concluded that the innovation model enhances SMEs on becoming strongly autonomous. The research recommended that process innovation should be driven by future environmental requirements and a desire to have a more sustainable pre-treatment process in the SMEs. Conducting workshops will assist SMEs to find new opportunities for innovation.