The role of subcontracting on innovation: an assessment of small and medium enterprises in Nigeria

Abstract

This paper investigated the influence of subcontracting on innovation and its impact on the performance of small and medium enterprises (SMEs) in Onitsha, Nigeria. The paper adopted a number of methods comprising of field observations, reference to relevant literature, and a questionnaire survey of 113 SMEs. Regression, mean and standard deviation were used to analyse the data. In line with the literature, this paper identified seven (7) dimensions of subcontracting assistance from large scale industries to small business firms.  The paper found that subcontracting relationship between large scale industries and SMEs is inclined to production and product-related cooperation where the contractors are concerned with meeting fluctuation in demand and shortening long delivery times. This paper concluded by suggesting that subcontracting relationship between SMEs and large scale industries should not be restricted to production, purchase, finance and marketing assistance. It should also be extended to human resource development and organisational-know-how.