STRATEGIC INNOVATION AS DRIVER FOR SME PERFORMANCE IN YEMEN
DOI:
https://doi.org/10.32890/jtom2018.13.1.4Keywords:
Strategic innovation, SMEs, performanceAbstract
Success lies at the heart of every organization’s ability to innovate, innovation is one of the most important strategies of competition, both for large and small firms, it is widely held in the literature and among practitioners that small and medium enterprises (SME) are instrumental in the economic development of countries worldwide. However, the contribution of SMEs can only be possible through performance. This study is a conceptual discussion of manufacturing SME performance in Yemen and the effect of strategic innovation. The performance is considered to be very low, and the country is ranked by the Global Innovation Index as one the lowest in terms of innovation. The study discusses strategic innovation and presents a framework for understanding the concept in 10 different ways. It concludes by recommending some policies through which the government of Yemen can assist manufacturing SMEs. Specifically, the study recommends that the government should provide training subsidies to manufacturing SMEs because innovation can only take place when human resources are adequately trained.
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References
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Alshebami, A.S. & Khandare, D.M. (2014). Microfinance in Yemen: Challenges and opportunities. International journal in Management and Social Sciences, 2(12), 400 – 454.
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Ates, A., Garengo, P., Cocca, P., & Bititci, U. (2013). The development of SME managerial practice for effective performance management. Journal of Small Business and Enterprise Development, 20(1), 28-54.
Baden-Fuller, C., & Pitt, M. (1996). Strategic innovation: an international casebook on strategic management. Routledge.
Belderbos, R., Carree, M., Lokshin, B., & Sastre, J. F. (2015). Inter-temporal patterns of R&D collaboration and innovative performance. The Journal of Technology Transfer, 40(1), 123-137.
Boachie-Mensah, F., & Acquah, I. S. (2015). The effect of innovation types on the performance of small and medium-sized enterprises in the Sekondi-Takoradi Metropolis. Archives of Business Research, 3(3).
Brorstrom, S. (2015). Implementing innovative ideas in a city: good solutions on paper but not in practice?. International Journal of Public Sector Management, 28(3), 166-180.
Brunswicker, S., & Vanhaverbeke, W. (2015). Open innovation in small and mediumâ€sized enterprises (SMEs): External knowledge sourcing strategies and internal organizational facilitators. Journal of Small Business Management, 53(4), 1241-1263 Business venturing, 8(3), 241 -253.
Derrick, P., & Soren, K. (2007). A Framework for Strategic Innovation. Innovation Point LLC.
Drucker, P. (2014). Innovation and entrepreneurship. Rutledge.
Duval, Y., & Utoktham, C. (2014). Enabling participation of SMEs in international trade and production networks: Trade facilitation, trade finance and communication technology (No. 146). ARTNeT Working Paper Series.
Edinburgh Group (2013). Growing the global economy through SMEs, available at:http://www.edinburghgroup.org/media/2776/edinburgh_group_research_growing_the_gl obal_economy_through_smes.pdf, accessed 30.12.2013. Elo.
European Union (2003). Commission recommendation concerning the definition of micro, small and medium enterprises. Official Journal of the European Union, L124/36.
Fararah, F.S. & Alswidi, A.K. (2013). The role of perceived benefits on the relationship between service quality and customer satisfaction: a study on the Islamic microfinance and SMEs in Yemen using PLS approach. Asia Social Science, 9(10), 18 – 37.
Global innovation index (2015). Stronger Innovation Linkages for Global.
Global innovation index (2016). Stronger Innovation Linkages for Global.
Haraguchi, N., Cheng, C. F. C., & Smeets, E. (2017). The importance of manufacturing in economic development: Has this changed?. World Development, 93, 293-315.
Harvie, C., & Charoenrat, T. (2015). SMEs and the rise of global value chains. Integrating SMEs into Global Value Chains, 1.
Herath, H. M. A., & Mahmood, R. (2013). Strategic orientation based research model of SME performance for developing countries. Review of Integrative Business and Economics Research, 2(1), 430.
Hudson, M., Smart, A., & Bourne, M. (2001). Theory and practice in SME performance measurement systems. International journal of operations & production management, 21(8), 1096-1115.
Iizuka, M., & Gebreeyesus, M. (2017). Using Functions of Innovation Systems to Understand the Successful Emergence of Non-traditional Agricultural Export Industries in Developing Countries: Cases from Ethiopia and Chile. The European Journal of Development Research, 29(2), 384-403.
Isaga, N., Masurel, E., & Van Montfort, K. (2015). Owner-manager motives and the growth of SMEs in developing countries: Evidence from the furniture industry in Tanzania. Journal of Entrepreneurship in Emerging Economies, 7(3), 190-211.
Jabeen, R., Alekam, J. M. E., Aldaoud, K. A. M., Mat, N. K. N., Zureigat, B. N. I., Nahi, A. K., & al Junaidi, A. M. F. (2013). Antecedents of Firm’s Performance. Empirical Evidence from Yemeni Sme’s. American Journal of Economics, 3(1), 18-22.
Kalay, F., & Lynn, G. (2015). The Impact of Strategic Innovation Management Practices on Firm Innovation Performance. Research Journal of Business and Management, 2(3), 412-429.
Kapurubandara, M., & Lawson, R. (2006). Barriers to Adopting ICT and e-commerce with SMEs in developing countries: an exploratory study in Sri Lanka. University of Western Sydney, Australia, 82, 2005-2016.
Keskin, H.; Senturk, C.; Sungur, O. Kiris, H. (2010). The importance of SMEs in developing countries. 2nd International Symposium on sustainable development, June 8 – 9, Sarajevo.
Khalique, M., Bontis, N., Abdul Nassir bin Shaari, J., & Hassan Md. Isa, A. (2015). Intellectual capital in small and medium enterprises in Pakistan. Journal of Intellectual Capital, 16(1), 224-238.
Lilly, L., & Juma, D. (2014). Influence of Strategic Innovation on Performance of Commercial Banks in Kenya: The Case of Kenya Commercial Bank in Nairobi County. European Journal of Business Management, 2(1), 336-341.
Malaysian Department of Statistics (2015). Small and Medium enterprises 2015. Press Release.
Mandhachitara, R., & Allapach, S. (2017). Small business performance in Thailand: key success factors. Journal of Research in Marketing and Entrepreneurship, 19(2), 161-181.
Markides, C. (1997). Strategic innovation. Sloan management review, 38(3).
Mashahadi, F., Ahmad, N. H., & Mohamad, O. (2016). Strategic innovation ambidexterity and the internationalization performance of small and medium enterprises: An insight into herbal-based small and medium enterprises (HbSMEs). World Journal of Entrepreneurship, Management and Sustainable Development, 12(2), 161-175.
Menegotto, M., Pereira, E., & Fernandes, A. (2017, September). Social Innovation in the Brazilian Wine Chain: Co-Creation of Innovative Ideas in Processes, Products and Services in a Multidisciplinary Environment. In 12th European Conference on Innovation and Entrepreneurship ECIE 2017(p. 449).
Ministry of Planning and International Cooperation (MOPIC). (2004). Policies and programs of development for small and medium enterprises in the Republic of Yemen.
Ministry of Yemen (2016). Ministry of Industry and Trade. Retrieved from http://www.moit.gov.ye/moit/frontpage.
Ministry of Yemen (2017). Ministry of Industry and Trade. Retrieved from http://www.moit.gov.ye/moit/frontpage.
Mokhtar, S. S. M., Yusoff, R. Z., & Ahmad, A. (2014). Key elements of market orientation on Malaysian SMEs performance. International Journal of Business and Society, 15(1), 49.
Muhammad Arafat, N. (2014). The relationship between intellectual capital, innovation capability with firm age and firm performance. (Doctoral dissertation, Universiti Utara Malaysia).
Nasr, S., & Rostom, A. (2013). SME contributions to employment, job creation, and growth in the Arab world.
OECD (2017). Enhancing the contributions of SMEs in a global and digitalized economy. Paris: Meeting of the OECD council at ministerial level, 7 – 8 June, 2017.
OECD (2017), Small, Medium, Strong. Trends in SME Performance and Business OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264275683-en.
Oura, M. M., Zilber, S. N., & Lopes, E. L. (2016). Innovation capacity, international experience and export performance of SMEs in Brazil. International Business Review, 25(4), 921-932.
Poulios, I. (2014). Discussing strategy in heritage conservation: living heritage approach as an example of strategic innovation. Journal of Cultural Heritage Management and Sustainable Development, 4(1), 16-34.
Shabbir, M. S. (2015). Innovation and competitiveness lead to industrial trade.
Sky News (2012). Retrieved from https://www.youtube.com/watch?v=mK_q38scRxI /2012.
Szapiro, M., Vargas, M. A., Brito, M. M., & Cassiolato, J. E. (2016). Global value chains and national systems of innovation: Policy implications for developing countries. Rio de Janeiro: UFRJ.
Taticchi, P., Tonelli, F., & Cagnazzo, L. (2010). Performance measurement and management: a literature review and a research agenda. Measuring business excellence, 14(1), 4-18.
USAID (2009). USAID/Yemen economic growth strategy options review. USAID/EGAT/EC.
World Bank (2015). The republic of Yemen: Unlocking the potential for economic growth. World Bank Reports No. 102151-YE.
World Bank (2017). Information from http://www.worldbank.org/en/country/yemen.
World Bank/IFC (2010). Micro, small and medium enterprises around the world: How many are there, and what affect count? .
Yang, X. (2014). Different choice of strategic innovation among companies in China market. Journal of Science and Technology Policy Management, 5(6), 106 – 121.
YMIT 2014. General report of the result of the comprehensive industrial survey 2010.
Yemen Ministry of trade and industry.
Zoo, H., de Vries, H. J., & Lee, H. (2017). Interplay of innovation and standardization: Exploring the relevance in developing countries. Technological Forecasting and Social Change, 118, 334-348.
Abor, J., & Quartey, P. (2010). Issues in SME development in Ghana and South Africa. International research journal of finance and economics, 39(6), 215-228.
Afuah, A. (2009). Strategic innovation: new game strategies for competitive advantage. Rutledge.
Aljazeera (2012). Retrieved from http://www.aljazeera.net(2012)/programs/economy and people/2012.
Alhammadi, A., & Shahadan, F. (2014). The determinants of growth performance of small services enterprises in Yemen. Journal Economic Malaysia, 48(1), 35-48.
Alshebami, A.S. & Khandare, D.M. (2014). Microfinance in Yemen: Challenges and opportunities. International journal in Management and Social Sciences, 2(12), 400 – 454.
Aminu, I. M., & Shariff, M. N. M. (2015). Determinants of smes performance in Nigeria: A pilot study. Mediterranean Journal of Social Sciences, 6(1), 156.
Ates, A., Garengo, P., Cocca, P., & Bititci, U. (2013). The development of SME managerial practice for effective performance management. Journal of Small Business and Enterprise Development, 20(1), 28-54.
Baden-Fuller, C., & Pitt, M. (1996). Strategic innovation: an international casebook on strategic management. Routledge.
Belderbos, R., Carree, M., Lokshin, B., & Sastre, J. F. (2015). Inter-temporal patterns of R&D collaboration and innovative performance. The Journal of Technology Transfer, 40(1), 123-137.
Boachie-Mensah, F., & Acquah, I. S. (2015). The effect of innovation types on the performance of small and medium-sized enterprises in the Sekondi-Takoradi Metropolis. Archives of Business Research, 3(3).
Brorstrom, S. (2015). Implementing innovative ideas in a city: good solutions on paper but not in practice?. International Journal of Public Sector Management, 28(3), 166-180.
Brunswicker, S., & Vanhaverbeke, W. (2015). Open innovation in small and mediumâ€sized enterprises (SMEs): External knowledge sourcing strategies and internal organizational facilitators. Journal of Small Business Management, 53(4), 1241-1263 Business venturing, 8(3), 241 -253.
Derrick, P., & Soren, K. (2007). A Framework for Strategic Innovation. Innovation Point LLC.
Drucker, P. (2014). Innovation and entrepreneurship. Rutledge.
Duval, Y., & Utoktham, C. (2014). Enabling participation of SMEs in international trade and production networks: Trade facilitation, trade finance and communication technology (No. 146). ARTNeT Working Paper Series.
Edinburgh Group (2013). Growing the global economy through SMEs, available at:http://www.edinburghgroup.org/media/2776/edinburgh_group_research_growing_the_gl obal_economy_through_smes.pdf, accessed 30.12.2013. Elo.
European Union (2003). Commission recommendation concerning the definition of micro, small and medium enterprises. Official Journal of the European Union, L124/36.
Fararah, F.S. & Alswidi, A.K. (2013). The role of perceived benefits on the relationship between service quality and customer satisfaction: a study on the Islamic microfinance and SMEs in Yemen using PLS approach. Asia Social Science, 9(10), 18 – 37.
Global innovation index (2015). Stronger Innovation Linkages for Global.
Global innovation index (2016). Stronger Innovation Linkages for Global.
Haraguchi, N., Cheng, C. F. C., & Smeets, E. (2017). The importance of manufacturing in economic development: Has this changed?. World Development, 93, 293-315.
Harvie, C., & Charoenrat, T. (2015). SMEs and the rise of global value chains. Integrating SMEs into Global Value Chains, 1.
Herath, H. M. A., & Mahmood, R. (2013). Strategic orientation based research model of SME performance for developing countries. Review of Integrative Business and Economics Research, 2(1), 430.
Hudson, M., Smart, A., & Bourne, M. (2001). Theory and practice in SME performance measurement systems. International journal of operations & production management, 21(8), 1096-1115.
Iizuka, M., & Gebreeyesus, M. (2017). Using Functions of Innovation Systems to Understand the Successful Emergence of Non-traditional Agricultural Export Industries in Developing Countries: Cases from Ethiopia and Chile. The European Journal of Development Research, 29(2), 384-403.
Isaga, N., Masurel, E., & Van Montfort, K. (2015). Owner-manager motives and the growth of SMEs in developing countries: Evidence from the furniture industry in Tanzania. Journal of Entrepreneurship in Emerging Economies, 7(3), 190-211.
Jabeen, R., Alekam, J. M. E., Aldaoud, K. A. M., Mat, N. K. N., Zureigat, B. N. I., Nahi, A. K., & al Junaidi, A. M. F. (2013). Antecedents of Firm’s Performance. Empirical Evidence from Yemeni Sme’s. American Journal of Economics, 3(1), 18-22.
Kalay, F., & Lynn, G. (2015). The Impact of Strategic Innovation Management Practices on Firm Innovation Performance. Research Journal of Business and Management, 2(3), 412-429.
Kapurubandara, M., & Lawson, R. (2006). Barriers to Adopting ICT and e-commerce with SMEs in developing countries: an exploratory study in Sri Lanka. University of Western Sydney, Australia, 82, 2005-2016.
Keskin, H.; Senturk, C.; Sungur, O. Kiris, H. (2010). The importance of SMEs in developing countries. 2nd International Symposium on sustainable development, June 8 – 9, Sarajevo.
Khalique, M., Bontis, N., Abdul Nassir bin Shaari, J., & Hassan Md. Isa, A. (2015). Intellectual capital in small and medium enterprises in Pakistan. Journal of Intellectual Capital, 16(1), 224-238.
Lilly, L., & Juma, D. (2014). Influence of Strategic Innovation on Performance of Commercial Banks in Kenya: The Case of Kenya Commercial Bank in Nairobi County. European Journal of Business Management, 2(1), 336-341.
Malaysian Department of Statistics (2015). Small and Medium enterprises 2015. Press Release.
Mandhachitara, R., & Allapach, S. (2017). Small business performance in Thailand: key success factors. Journal of Research in Marketing and Entrepreneurship, 19(2), 161-181.
Markides, C. (1997). Strategic innovation. Sloan management review, 38(3).
Mashahadi, F., Ahmad, N. H., & Mohamad, O. (2016). Strategic innovation ambidexterity and the internationalization performance of small and medium enterprises: An insight into herbal-based small and medium enterprises (HbSMEs). World Journal of Entrepreneurship, Management and Sustainable Development, 12(2), 161-175.
Menegotto, M., Pereira, E., & Fernandes, A. (2017, September). Social Innovation in the Brazilian Wine Chain: Co-Creation of Innovative Ideas in Processes, Products and Services in a Multidisciplinary Environment. In 12th European Conference on Innovation and Entrepreneurship ECIE 2017(p. 449).
Ministry of Planning and International Cooperation (MOPIC). (2004). Policies and programs of development for small and medium enterprises in the Republic of Yemen.
Ministry of Yemen (2016). Ministry of Industry and Trade. Retrieved from http://www.moit.gov.ye/moit/frontpage.
Ministry of Yemen (2017). Ministry of Industry and Trade. Retrieved from http://www.moit.gov.ye/moit/frontpage.
Mokhtar, S. S. M., Yusoff, R. Z., & Ahmad, A. (2014). Key elements of market orientation on Malaysian SMEs performance. International Journal of Business and Society, 15(1), 49.
Muhammad Arafat, N. (2014). The relationship between intellectual capital, innovation capability with firm age and firm performance. (Doctoral dissertation, Universiti Utara Malaysia).
Nasr, S., & Rostom, A. (2013). SME contributions to employment, job creation, and growth in the Arab world.
OECD (2017). Enhancing the contributions of SMEs in a global and digitalized economy. Paris: Meeting of the OECD council at ministerial level, 7 – 8 June, 2017.
OECD (2017), Small, Medium, Strong. Trends in SME Performance and Business OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264275683-en.
Oura, M. M., Zilber, S. N., & Lopes, E. L. (2016). Innovation capacity, international experience and export performance of SMEs in Brazil. International Business Review, 25(4), 921-932.
Poulios, I. (2014). Discussing strategy in heritage conservation: living heritage approach as an example of strategic innovation. Journal of Cultural Heritage Management and Sustainable Development, 4(1), 16-34.
Shabbir, M. S. (2015). Innovation and competitiveness lead to industrial trade.
Sky News (2012). Retrieved from https://www.youtube.com/watch?v=mK_q38scRxI /2012.
Szapiro, M., Vargas, M. A., Brito, M. M., & Cassiolato, J. E. (2016). Global value chains and national systems of innovation: Policy implications for developing countries. Rio de Janeiro: UFRJ.
Taticchi, P., Tonelli, F., & Cagnazzo, L. (2010). Performance measurement and management: a literature review and a research agenda. Measuring business excellence, 14(1), 4-18.
USAID (2009). USAID/Yemen economic growth strategy options review. USAID/EGAT/EC.
World Bank (2015). The republic of Yemen: Unlocking the potential for economic growth. World Bank Reports No. 102151-YE.
World Bank (2017). Information from http://www.worldbank.org/en/country/yemen.
World Bank/IFC (2010). Micro, small and medium enterprises around the world: How many are there, and what affect count? .
Yang, X. (2014). Different choice of strategic innovation among companies in China market. Journal of Science and Technology Policy Management, 5(6), 106 – 121.
YMIT 2014. General report of the result of the comprehensive industrial survey 2010.
Yemen Ministry of trade and industry.
Zoo, H., de Vries, H. J., & Lee, H. (2017). Interplay of innovation and standardization: Exploring the relevance in developing countries. Technological Forecasting and Social Change, 118, 334-348.
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Published
27-06-2018
How to Cite
AlQershi, N., Abas, Z., & Mohd Mokhtar, S. S. (2018). STRATEGIC INNOVATION AS DRIVER FOR SME PERFORMANCE IN YEMEN. Journal of Technology and Operations Management, 13(1), 30–41. https://doi.org/10.32890/jtom2018.13.1.4
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