Abstract
Innovation is considered to be the driving force of competitiveness and growth of firms as well as countries. However, most of MSEs in Ethiopia particularly in Debre Berhan town they were not innovative. Thus, the aim of this article was to identify determinants of innovativeness of MSEs in Debre Berhan town. Data were obtained using questionnaires primarily. The sample consists of 326 MSEs, but the response rate was 90.18%. Both stratified and simple random sampling techniques were employed in the study. Both descriptive statistics and econometric analysis were employed. From descriptive statistics percentage and frequency and chi-square test and from econometric analysis, binary logistics analysis was used. The binary logistics results confirmed that competition in the market (OR=0.035, P<.01) and engagement in research (OR=0.126, P<.001), access to finance (OR=0.190, P<.005) respectively found to be major factors of innovation. However, vocational training and consultancy service did not have statistically significant influence on innovation behaviour. Based on the findings of the study, possible solutions were recommended to the concerned government bodies to enhance innovativeness of MSEs in the study area. DOI: 10.7176/RHSS/11-19-03 Publication date: October 31 st 2021
Highlights
Nowadays sources of competitive advantage and economic development are sought in the sphere of innovation (Zastempowski & Przybylska, 2016)
Study Area Profile Debre Berhan is a town in central part of Ethiopia which is located in the North Shewa Zone in the Amhara Region, about 130 kilometres northeast of Addis Ababa, the capital city of Ethiopia
Where Pi is the probability of having innovative practice for the ith MSE and Zi is a set of factors affecting innovative practice of MSEs (Xi) and the disturbance term (Ui) expressed as: Zi = + ∑ βiXi + Ui, Where β0 is the intercept, βi are the slope parameters in the model and n is the number of explanatory variables
Summary
Nowadays sources of competitive advantage and economic development are sought in the sphere of innovation (Zastempowski & Przybylska, 2016). Innovation is considered to be the driving force of competitiveness and growth of firms as well as countries(Talegeta, 2014). They have been incorporated into governmental and international strategic development programmes(Zastempowski & Przybylska, 2016). With increasing competition and quickly spreading of knowledge, the future of many businesses depend upon their ability to innovation (Talegeta, 2014). Despite these benefits of innovation, not all firms undertake innovation projects (Cisková & Ďurčeková, 2019)
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