Innovation management practices as a factor leading to the failure of small and medium-sized enterprises in South Africa.
Loading...
Date
2021
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The purpose of this study was to investigate the factors that lead small and medium enterprises
(SMEs) to failure in South Africa. Even though, small businesses can be major drivers of
economic development, job creation, and innovation in South Africa, the level of failure of
small businesses is extremely high. Based on this background, the aim of this study was to
determine the innovation factors and managerial practices that lead to the failure of small and
medium-sized enterprises and how they can be addressed in order to understand the causes of
the failure of SMEs and to improve their survival rate in South Africa.
In this study secondary data has been gathered from peer-reviewed and grey literature (such as
online sources, and government reports). The data analysis for this research focussed on
relevant literature that addresses the impacts of innovation on small businesses and the factors
that can cause their failure. The PRISMA method was used in the research as a base for the
systematic review of data collected.
The findings revealed that the success and growth of small and medium enterprises in South
Africa largely depends on the human capital of their owner/manager. The cause of small
business failure has been mainly the lack of knowledge, lack of funding, and general lack of
business decision-making skills. In addition, the findings also revealed a lack of financial
literacy, underqualified employees or managers, and high competition.
The study recommends that small business owners should ensure that the managers or the
employees have the required basic skills and knowledge on how to run and manage the
business. Furthermore, with the current development in the technological industry, small
business owners must ensure that they keep up with the fast-evolving industries and
competition. The contribution of this study is that it provides small business owners and
managers with technical recommendations, which if applied, could result in small businesses’
success in their respective industries. Lastly, it provides insight into the impact of innovation
on small businesses sustainability in developing countries and the causes of the failure of
SMEs.
Description
Masters Degree. University of KwaZulu-Natal, Pietermaritzburg.