Modelling the Innovation Value Chain: Evidence from Manufacturing Sector SMMEs in South Africa
Date
2018
Authors
Machaka, Ronald
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Abstract
The development of Small, Medium and Micro-sized Enterprises, or SMME firms, is at the centre of the South African government’s policy and strategic priorities. The attention on SMMEs is not misplaced; they make up the largest share of private businesses in South Africa, employing over 61% of the nation’s workforce and contribute to up to 60% of South Africa’s gross domestic product (GDP). However, despite this attention, innovation research is still largely transfixed on large firms. As a consequence, it is not surprising that the inner-workings of innovation activities in SMMEs are relatively not a well-understood phenomenon globally, and more so, in South Africa in particular.
Two aims were pursued in this report using evidence from a firm level dataset drawn from the 2013 South African Business Innovation Survey. Firstly, it sought to characterise the influence of knowledge sources on the development of innovations in SMMEs through the innovation value chain framework. Secondly, the study investigates and identifies the determinants of innovations in manufacturing sector SMMEs.
The research is quantitative in nature and consists of three empirical investigations making use of several established econometric tools. The findings make practical contributions in the area of inter-organizational learning and management of innovation in SMME. In particular, the influences of knowledge linkages on firm performance were identified and the extent to which some of the determinants of small firm innovation were interrogated. While the findings permit the research to drawn various implications and contributions from this work. It is comforting to note that in as far as the information–innovation–performance nexus goes – it matters greatly for the SMME’s performance if the firm succeeds in introducing significantly improved or new products and processes.
KEYWORDS: South Africa, Small medium and micro enterprises (SMMEs), Dynamics of innovation, Innovation value chain, Manufacturing
Description
A dissertation submitted to the Wits Business School in the University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in the field of Innovation Studies
Johannesburg, 2018