Incremental Innovations in Ghanaian SMEs: Propensity, Types, Performance and Management Challenges

Abstract

Incremental innovation has been recognised as a key factor to SMEs’ survival and growth in today’s hyper-competitive business world. Notwithstanding this inspired recognition, analytical and empirical studies on SMEs’ incremental innovation practices are still measly in emerging economies. Drawing from the dynamic capabilities theory, the present study sought to examine SMEs’ incremental innovation practices in Accra, Ghana. The study followed a multiple-case qualitative methodology using a semi-structured interview and a simple random sampling method to select 17 SMEs for the study while an inductive approach was used to analyse the transcribed data from the informants. The findings disclosed that the incremental innovation propensity and innovation types in the SMEs differ from small firms to medium firms and from manufacturing firms to service firms. It was further disclosed that the incremental innovation practices have improved the performance of the SMEs in terms of increased customer satisfaction and loyalty, sales growth, competitiveness, and global market reach, while their paramount innovation management challenges were lack of financial resources, infrastructure, specialized personnel, and information on technology. These findings add to SMEs theory and practice and offer novel theoretical insights for researchers and valuable managerial implications for SMEs’ managers in emerging economies.