Investigating innovation in South African SMMEs.

Abstract

People, environment and events interact to create an economy and business is integral in sustaining the economy. Not only large business but small, medium and micro-enterprises (SMMEs) are interwoven into the very fabric of the South African economy. For any business to move forward innovation is not a luxury but a necessity. The aim of this study is to explore how South African SMMEs innovate. This was a cross-sectional study utilizing a quantitative approach of an online questionnaire to collect data. From a sample size of 300 a total of 104 responses were received. Findings reveal that innovation is not dependent on firm size but innovation strongly impacts and is impacted by firm performance. South African SMMEs are actively engaged in many innovation types with customer centric innovation being most predominant followed by product innovation, business services innovation, channel innovation and business model innovation. These findings demonstrate that businesses engage in innovation activities beyond product, process, organisational and marketing innovation. Results showed that innovation intensity is widespread (breadth) rather than deep (depth). This could imply that SMMEs balance innovative activities with maintaining routine practices. Lack of government support, high taxes and shortage of skilled staff are common obstacles to innovation. Knowing that SMME s are innovatively active, accessible and meaningful support by government and policy makers should be directed towards innovation capabilities rather than focussing on outcomes. Owners and managers need to recognise their innovative activities to leverage the concentrated innovation potential, which the study has revealed, in the direction of sustainable growth.