Infographic

Seminar
The impact of innovation on
the competitive performance of
small and medium enterprises
in Pakistan
MBA(Executive)
BETA
Maqsood Ahmad
20bn
2006-ag-1086
23bn
5bn

40% 60%
FINISH 20yy

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increase existing market share and provide
companies to be competitive.

One way to develop and improve competitive

advantage and improve performance is
through resource utilization and enhancing
innovation for SMEs. Innovative methods
applied can enable SMEs to compete and
survive in a competitive global environment
companies has a significant positive
relationship on performance. On the other
hand, that company innovation has a higher
market share, total sales and exports.

Innovation strategies are a key driver of

importance to corporate performance.
Corporate innovation is the strongest driver
of performance. In addition, with the
company's innovation occurs higher sales and
exports.
innovation and a
positive impact on company performance.
Direct and positive innovations are
influenced by product, organization and
marketing.

Four types of innovation i.e. company

innovation, marketing innovation, process
innovation, and product innovation affect the
company's performance aspect. Innovation
mediates the relationship between market
orientation and company performance.
Performance; innovation refers to the sale of
new products, new product market share,
timely new product launch, new percent of
product sales in total sales

Impact of Innovation Strategy on SMEs

Performance; effective innovation leads to
sustainable competitive advantage and affects
the performance of manufacturing SMEs.
competitive market, SMEs need to bring
innovation in their business practices

The statistically significant results indicate

that innovative firms are larger, older and are
part of a larger group, have exports, have
recently invested in capital expenditures,
serve national market as opposed to the local
market, have a quality certification, use
technology that is licensed from foreign-
owned firm, and provide formal training for
employees.
Innovation outputs differ in their novelty.
Radical innovations tend to be more
influential. Firms introducing highly
innovative products or services (radical
innovations) can gain a significant
competitive advantage over those that
introduce imitative or only-new-to firm
routine types of innovations
about innovation remains unclear to SMEs of
Pakistan because most of the researches were
carried out among large enterprises only.

Pakistani SMEs are not utilizing the updated

technology in their firms (especially in the
manufacturing sector). Only sixty six percent
of the sample firms have access to the
internet and only forty four percent of SMEs
are using human resource information
systems.
most of the researches have been conducted
on just product and process innovation and
ignored marketing and organizational
innovation.

Major gap exists in the body of knowledge.

Therefore, this study is conducted to fill the
research gap by examining the impact of four
types of innovation practices (product,
process, marketing and organizational) on
sustainable performance of goods
manufacturing SMEs in Pakistan
customer, internal business process and
learning and growth) has not been analyzed
before.

All dimensions of innovation have a

significant and positive impact on the
performance of SMEs. Innovation has great
influence on learning and growth perspective
of SMEs that in return improves other three
perspectives of performance. Therefore,
SMEs should focus greatly on innovation to
improve learning and growth in the SMEs.
Other aspects of innovation such as new
organizational arrangements, new ways of
logistical and distribution processes, and new
marketing innovation activities. All these
activities reinforce and help firms in
developing markets to adapt to their peculiar
environmental conditions and ensure survival
and growth.
initial stages of innovation projects. Firms are
also reluctant to disclose full information
about innovation projects

Innovation investments develop specific

intangible asset and knowledge base, created
by investment in human capital through
worker training in new technologies and
processes, and knowledge creation through
design and marketing investments
specific, embedded in human capital, and has
a limited marketability and collateral value,
lenders may lack the required skill set to
evaluate R&D projects, which may typically
be characterized by specific technical or
scientific knowledge. This may further
exacerbate the moral hazard problem given
that lenders lack complete information, and
understanding, of the signals about the nature
of innovation investment value propositions
constraints. Consistent with this, several
studies document the sensitivity of R&D
investments to the firm’s cash flows

Financial constraints are negatively correlated

to the degree of innovation novelty,
suggesting that the impact of financial
constraints is more pronounced for the less
radical innovations than for the more novel
innovations.
innovation through the adoption and diffusion
of new technologies, new means of
production processes, products, and
organizational arrangements.

Innovative products may be accompanied by

an adoption of new methods of production
processes, technologies and new forms of
organizational-managerial arrangements. This
may leave these various forms of innovations
as complementary
export is very minimal, High tech exports
have positive relation with GDP growth This
indicates that there is a lot of potential in the
external sector to be explored.

Effects of high technology through process

innovation on economic development are one
of the significant results is in favor of positive
correlation between process innovation and
SMEs growth
adopt innovative practices in SMEs which
certainly has a major positive effect in
enhancing the performance of SMEs.

The government through SMEDA can

encourage SME owners/managers with
regard to the upgrade of technology. This
could enhance the capability of SMEs to
better draw on international developments
within the business world, particularly in the
SME sector.
impact of different type of innovation on the
performance of different sectors in future.

In developing countries like Pakistan, for

economic development in the country, there
is an immense need to focus on education
improvement. education is a significant
variable which plays an important role for the
growth of share of SMEs in GDP as well as
for economic development.
who can successfully evaluate the benefits
innovation over the existing technology, so
the willingness in SMEs to adopt innovations
will increase and should arrange training and
workshop programs for SMEs employees to
enhance their capabilities, so the perceived
complexity will decrease and organization
can easily adopt new innovations.
Future research may analyze the role of
government policies along with strategic
orientations of the SMEs to gather a more in-
depth information and knowledge on the
SMEs behavior and their competitiveness.