Factors influencing innovation among small, micro and medium enterprises (SMMEs) in marginalized settings: evidence from South Africa

ABSTRACT

Achieving inclusive outcomes through innovation is such that small, micro and medium enterprises (SMMEs) can no longer be ignored. This study aims to investigate the determinants of innovation activities among SMMEs in a developing country context using evidence from South Africa. Using the binary logistic regression model, this paper analysed a dataset of 643 SMMEs located across eight district municipalities in South Africa. The study findings revealed that there are dynamic innovation activities occurring among SMMEs located in rural and/or informal settings, focusing on making incremental changes to production and delivery processes adopted from elsewhere. The study identified several factors that hinder or enhance innovation activities among SMMEs, revealing that the factors associated with innovation activities vary depending on the nature of the innovation activity. Empirical insights from this study could better inform strategies used by policy makers to promote innovation that strengthen the competitiveness of SMMEs and innovation that is socially inclusive.

KEYWORDS:

• Innovation
• small
• micro and medium enterprises (SMMEs)
• adaptions
• invention
• marginalized settings

Acknowledgements

This paper draws from evidence obtained during various phases of the Local Innovation Advancement Tools (LIAT) project. The authors are also grateful for to the valuable inputs from the LIAT team members. The views expressed in this paper are those of the authors and do not necessarily reflect those of any other party.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The authors acknowledge the financial support of the Department of Science and Innovation (DSI).