Second International Conference on Advances in Social Science, Economics and Management Study - SEM 2014
Author(s) : EDEM AGBOBLI, PATIENT RAMBE
The sub-optimal performance of small, micro and medium enterprises (SMMEs) has been a grave concern in African developing countries, where the triple challenges of high unemployment, poverty and inequality are rife. More so, while a growing body of entrepreneurship literature attributes the underperformance of SMMEs in developing countries to lack of innovation of these firms, this literature has focused substantially on large scale, urban based enterprises in the manufacturing and retail sectors. Consequently, despite the increasing value of rural based agricultural enterprises to the economies of developing countries, the role of innovation in the performance of rural-based SMMEs remain under-explored and ambiguous in literature. Therefore, this paper examines the role and contribution of innovation to the improvement of SMME performance. The thesis of this paper is that mindful of the agro-based nature of African economies, the ballooning population that domicile in rural areas coupled with the increasing role of food security in national development discourses, the significance of innovation in successful SMME performance cannot be over emphasised. To test the hypothesis that innovation positively impacts performance of small rural agricultural SMMEs, this study employed survey approach to data from 198 small scale agricultural enterprises (SAAEs) in the Vryburg region of South Africa. Our findings suggest that innovation has a positive and moderate influence on the performance of small rural agricultural SMMEs surveyed. The study recommends the design and implementation of innovation-driven approaches to agricultural SMMEs to promote sustained profitability and growth of the SMME sector in developing countries.