Innovation in small and medium auto ancillary enterprises in India

Abstract

This research study investigates the enablers, barriers of innovation, and sources of innovation ideas in the Indian auto ancillary sector SMEs. The data were collected from 67 SMEs of NCR region by means of a questionnaire survey. The results of the data analysis indicated ‘internal environment’ as a major enabler of innovation followed by ‘customer/client’s needs. A major barrier of innovation was ‘perceived uncertainty’ and ‘financial resources’. Significant differences were found between more innovating firms and less innovating firms in terms of ‘lack of employees’ support. Furthermore, the differences were observed for enablers and drivers for a different type of innovation namely product, process and management. For impact of innovation, significant differences are observed between ‘less innovating’ and ‘more innovating’ auto ancillary firms with respect to ‘profitability’, ‘market share’ and ‘reputation’. The findings of the study are expected to help the firms to enhance the innovating activities for better performance.