THE EFFECT OF INNOVATIVE CAPABILITIES ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN THE KUMASI METROPOLIS

Abstract

To become innovative, SMEs needs to develop their innovation capability. Considering the competitive nature of SME environments, developing innovative capability is vital for survival. The study compares the effect of innovative capability on the performance of Small and Medium Scale Enterprises in Ashanti Region of Ghana. The population comprised of SME (registered and unregistered) entrepreneurs within the Ashanti Region. The study was conducted on a sample size of four hundred (400) SMEs in the Kumasi Metropolis. A response rate of 98.75% was achieved. Purposive and convenience sampling technique was used and the data collection method used was questionnaire. The study revealed that innovative capabilities significantly and positively affect performance of SME firms in the Kumasi Metropolis. Product innovation was found to be the best innovative strategy that SMEs can use to increase their organisational performance