Firms’ Demographics and Barriers to Innovation in Ghana: Can SMEs in Developing African Economies Swot Something Up?
Authors: Michael Asiedu, Daniel Marboye Quaye, Emmanuel Kwame Yeboah
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In recognition of the relevance of Small and Medium Scale Enterprises [SMEs] and innovation in economic development, efforts are being made to find strategies to overcome the barriers to innovation among SMEs. However, it is not clear from extant literature, as to whether all SMEs, irrespective of their demographic features, face the same barriers to innovation. It is on this premise that this study seeks to investigate the differences in constrains to innovation faced by SMEs as a result of their varied demographic characteristics. The study adopted a quantitative approach and sampled one hundred SME firms in Ghana as respondents for the study. The demographic characteristics considered in the analysis include education of owner-managers; control of activities (family control or non-family control); sector of SME; firm size (number of employees) and years of operation. The barriers to innovation also comprise of human, management, technical, supply, demand, government and culture related barriers. The results reveal that, SMEs with different demographic characteristics face different barriers to innovation. However, in most cases, irrespective of the educational background of SME owners, they face the same barriers with respect to management, lack of technical expertise, supply related barriers, and government related barriers. This study recommends that, developing African economies should quickly learn to reform SMEs on the basis of their demographic characteristics to enhance their innovative capacities.