Title: The impact of technological innovation on SME's profitability in Nigeria

Authors: Yusuf Opeyemi Akinwale; Adeyemi Oluwaseun Adepoju; Michael Oluwaseun Olomu

Addresses: National Centre for Technology Management, Federal Ministry of Science and Technology, PMB 012, Obafemi Awolowo University, Ile-Ife, Nigeria ' National Centre for Technology Management, Federal Ministry of Science and Technology, PMB 012, Obafemi Awolowo University, Ile-Ife, Nigeria ' National Centre for Technology Management, Federal Ministry of Science and Technology, PMB 012, Obafemi Awolowo University, Ile-Ife, Nigeria

Abstract: There is no doubt that new or improved product or process of production continues to create firm's competitive advantage over others in the market. This study examined the impact of research and development (R&D) expenditure, product and process innovations on small and medium enterprises (SMEs) performance in the manufacturing industry in Nigeria using a survey of 1,000 SMEs with a response rate of 52.1% in year 2009. The results with least squares method showed that R&D spending by the firms as well as product and process innovation has significant impacts on the firm's performance with the probability value of 0.0529, 0.0624 and 0.0086 respectively at 10% level of significant. Also, training of workforce constitutes the major innovation activities in the Nigerian manufacturing SMEs as against in-house and outsourced R&D activities. This study suggests improvement in R&D spending and other technological activities which are expected to increase SMEs' profitability and thus generate more employment in the country.

Keywords: technological innovation; small and medium-sized enterprises; manufacturing SMEs; manufacturing industry; profitability; research and development; R&D expenditure; product innovation; process innovation; Nigeria; least squares; firm performance; workforce training.

DOI: 10.1504/IJRIC.2017.082299

International Journal of Research, Innovation and Commercialisation, 2017 Vol.1 No.1, pp.74 - 92

Received: 08 May 2014
Accepted: 30 Jan 2015

Published online: 14 Feb 2017 *

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