CHAPTER 14- INNOVATION AND MICRO SMALL AND MEDIUM ENTERPRISES SURVIVAL                                                                                                                                                                                                          
Adedeji Adeshina AKEEM
Omotola Adeniyi ANDREW
Godson Christian OSITA
Azeez ADEBAYO
                                                                               
Cite this chapter
APA

Akeem, A. A., Andrew, O. A., Osita, G. C., Adebayo, A. (2023). Chapter 14 Innovation and Micro Small and Medium Enterprises Survival. In B. L. Salvador Bizotto (Ed.), Academic Research & Reviews in Social, Human, and Administrative Sciences-III- (pp. 328-343). Ankara, Türkiye: Global Academy Publishing House. https://dx.doi.org/10.59740/academy.52

Introduction

Micro, small and medium enterprises (MSMEs) are vital to economic growth, sustainability and development of any economy. Scholars have not been able to reach a consensus on what constitutes MSMEs, as its determinants vary across nations, and even within the same economy. Eze, Powel and Kolawole (2016) posit that in explaining the domain of MSMEs, researchers usually employ some quantifiable metrics, such as: capital, assets, annual turnover, paid employees and profitability, among others. According to small and medium enterprises development agency of Nigeria (SMEDAN) (2007) micro enterprises are business entities that have less than ten employees with asset (excluding land and building)
below five million naira. Small enterprises are business entities that have between ten to forty-nine employees with asset (excluding land and building) of between five million naira and less than fifty million naira. SMEDAN (2007) perceived medium enterprises as business entities that have between fifty and one hundred and ninety-nine employees with asset (excluding land and building) of between fifty million and less than five hundred million naira.

According to the National Bureau of Statistics (NBS, 2016), Nigeria has 37, 067,416 MSMEs, operating in various sectors of the Nigeria economy and across the thirty-six state of the federation as well as the Federal Capital Territory, Lagos state which is the commercial nerve centers of the Nation, has 3,224,324 micro enterprises, 11,044 small enterprises and 619 medium enterprises, given a total of 3,235,987 MSMEs in Lagos State, Nigeria (NBS, 2016). MSMEs accounts for 48% of the gross domestic product (GDP) of Nigeria and employ about 60 million people in Nigeria (NBS, 2014). Innovation has long been contended as the main source of growth. Business entities have several goals ranging from financial to non-financial which aids the attainment of organizational goals. To attain this, innovation is a key element, because it allows business entities do things outstandingly; thus, having competitive edge in the market. The capability to innovate is progressively viewed as the single most important factor in developing and sustaining competitive advantage (Tidd, 2001). Innovation is one of the most important determinants that enable a business entity to ensure its tomorrow is better than its today. It is perceived as a vital element of a firm’s strategy because it constitutes one of the major means through which it seeks new business opportunities. Innovation is a word coined by Schumpeter (1934) in the 20th century. He defined innovation as the process and product which organization changes that do not emanate from scientific discovery but also come from a mix of already existing technologies and their application in a new way.

It is noteworthy to mention how innovation strategy used by some companies like Uber, O-Ride and Awabike are now taking over the use of commercial transportation system in Nigeria. In the hospitability industry (Hotels) we have the like of Airbnb which has no single bed for itself but is the largest and thriving hospitality and comfort firm. At this point, it is imperative to note that innovation is not the same as invention. Wirtz differentiated innovation from invention using Thomas Edisons statement” the real challenge in innovation was not invention- coming up with good ideas – but in making them work technically and commercially”. Houser et al (2006) stated that for success in innovation, organizations must take the needs of customers very paramount and get them satisfied through innovative products. The implications of innovation on multi-skills development are enormous, as innovativeness tends to propel the development of novel skills set. This is because, the development of innovative ideas requires the proper skills set. This usually propels enterprises to embark on training and development programmes, so as to up the skills of their workforce.