Enabling Innovation and Productivity Growth in Manufacturing Small and Medium Sized Enterprises in Low Income Countries

Abstract

The promotion of innovation in Low Income Countries (LICs) has recently appeared on the agenda of policymakers and international development agencies; it is widely agreed that innovation is crucial in these countries, as it is fundamental for the growth needed to catch up with middle and high income economies. However, research, theory development and policy formulation have mainly focused on innovation in the more advanced economies, with only limited investigation of such issues in LICs. The four-year research project ‘Enabling Productivity and Innovation in Low Income Countries’ aims to fill research gaps on innovation in LICs from an economic perspective.

This report presents the first of a series of case studies in Kenya. It is targeted at the project researchers as well as the broader academic community with similar research interests. In addition, it may help policymakers within governmental agencies, firms and NGOs to gain understanding on innovation from an entrepreneurs’ perspective. It is also targeted at owners of Small and Medium-sized Enterprises (SMEs) and SME branch organisations, who will, it is hoped, see the reality of their business, socio-economic and institutional context accurately reflected in the report. The report begins by discussing the approach and methodology of the qualitative case study, then provides a brief introduction to the manufacturing SME sector in Kenya, followed by the main empirical part of the study, which details eight selected case studies out of the 15 interviewed companies.

In the final section of the report the trends and notable patterns across the cases are analysed and reviewed against current theoretical insights with regard to research and policy issues of innovation and productivity growth in manufacturing SMEs. This constitutes a first analysis of the empirical material, and will be followed up in more depth with a view to developing academic papers (the original transcriptions are stored and available). Some initial policy ideas and implications are suggested. The report concludes with observations regarding the project’s research themes that may offer several additional insights to complement researchers’ efforts in future.

Citation

Voeten, J. Enabling Innovation and Productivity Growth in Manufacturing Small and Medium Sized Enterprises in Low Income Countries. Tilburg University, Tilburg, Netherlands (2015) 35 pp.

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