Effect of Innovation on Small Medium Enterprises (SMEs) Performance and Competitiveness: Evidence from Cote d’Ivoire

Abstract

Researchers, entrepreneurs, and governments all agree that Small and Medium-sized Enterprises (SMEs) play an essential role in the world's economic development. This study sought to examine the effect of innovation on SMEs' performance and competitiveness in Cote d’Ivoire. Data for the study have been obtained from 250 SMEs operating in Cote d’Ivoire through a structured questionnaire. The PLS-SEM was the primary analytical tool used to analyse the research findings via SmartPLS 3 and SPSS 22. Findings from this study revealed that marketing innovation, product innovation, organisational, and process innovations are the innovation dimensions that contribute to SMEs' performance in Cote d’Ivoire. Marketing innovation contributes more significantly to SMEs' performance, followed by product innovation, organisational innovation, and process innovation. Additionally, the study found significant and positive relationship between competitive advantage and SMEs' performance. The study thus concluded that to remain competitive and profitable, SMEs operating in developing countries must embrace innovation and continuously seek ways to be innovative remain relevant in the industry.