Innovation and Micro and Small Enterprises Growth Performance: Evidence from Kenya

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Date
2018-10Author
Njiraini, Peter
Omolo, Jacob
Gachanja, Paul
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The role that innovation can play towards the growth and survival of an enterprise continues to gain
credence as better indicators of enterprise innovativeness come to the fore. In spite of this growing body of
knowledge, micro and small enterprises in Kenya continue to experience high mortality rate. This paper used
World Bank Enterprise Survey data for Kenya to probe whether innovative micro and small enterprises are
indeed associated with better growth performance. The study used a qualitative analysis using a descriptive
analysis and t-test for mean differences to compare innovative and non-innovative micro and small enterprises.
The results show that there was no statistically significant relationship between a micro and small enterprise’s
growth performance and its innovativeness. Innovative micro and small enterprises were, however, found to
have invested relatively higher resources towards innovation inputs and hiring of advanced human skills. They
also participated in export trade. The results seems to suggest that innovative micro and small enterprises’
investment were either too marginal to make a difference or the investments dissipated along the innovation
chain.