Innovation as a strategy for small to medium enterprises’ (SMEs) survival and growth in Mashonaland West Province, Zimbabwe.
Marima, Nelia Eta.
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This study examines how innovation can be used as a strategy by SMEs in Zimbabwe to achieve both survival and growth. A sample of 385 employees and owner managers of the manufacturing SMEs in the Mashonaland West province of Zimbabwe was taken for the study using convenience and purposive sampling. In order to answer the research questions, a questionnaire which had both open-ended and closed-ended questions was designed and administered to the sample with a response rate of 85.7 per cent. The study found that most SMEs did not have innovation policies in their organisations although the majority of the SMEs claimed to be involved in open innovation. An interesting finding from the study was that most SMEs rewarded people who brought in innovative ideas to the company. The study also found that the SMEs were facing a number of challenges which were impairing their ability to be innovative. Consequently, these challenges were threatening their survival and growth. These challenges include capital shortages, lack of ‘manpower’, poor infrastructure, competition, lack of government support, strict and unconducive rules and regulations and technological problems. However, the challenge that seemed to be affecting the SMEs the most was that of capital shortage. The study recommended to the SMEs that they should not rely on only a few sources of funding but that they should have a large portfolio of funding sources. Additionally, the study recommended the government to take steps to increase the capacity of financial institutions to construct profitable SME lending programmes. In addition, to survive and grow SMEs also need to be involved in innovative activities such as product innovation, marketing innovation and organisational innovation. The study also found that there was need for SMEs to open new markets in order for them to achieve sustainable growth. Moreover, the study advised that the SMEs should hold refresher courses or training on innovation in their companies. It is hoped that future studies will help uncover how capital shortages affect the ability to innovate within small to medium enterprises.