Performance through Innovation: An Analysis of Small and Medium-Sized Enterprises in Developing Country

Abstract

This study examines performance improvement through innovation in SMEs in developing countries. This research is a quantitative study with a total sample of 100 SMEs. The existing data were analyzed by using a 2-way- path of analysis. The results show that the performance of SMEs is influenced by innovation strategy. Innovation sstrategies drawn up by SMEs need managerial support and focus on target markets where strategic leadership will shape the policies that support appropriate innovation strategy planning. In addition to understanding market orientation, SMEs can understand what is needed by consumers and also understand the development of market mechanism that will facilitate SMEs to choose the appropriate innovation strategy.