Entrepreneurial Innovation and Performance of Small and Medium Enterprises in Bujumbura, Burundi
Small and Medium Enterprises are major players in the competition and growth of economies. They have been accelerating changes towards achieving Burundi’s vision 2025 by offering job opportunities and generating revenues for the government which reduced poverty and income inequality. However, small and medium enterprises in Burundi are experiencing poor performance since their revenue turnover decreased by 44.6 percent from 2014 to 2018. The focus of this thesis was to investigate how entrepreneurial innovation affects the performance of small and medium enterprises in Bujumbura, Burundi by investigating the effects of product, process, organizational, and market innovation on their performance and by analysing the moderating effect of government regulation on the relationship between entrepreneurial innovation and the performance of small and medium enterprises in Bujumbura, Burundi. The resource-based view theory and dynamic capability theory guided the study. They were supported by Schumpeter’s theory of entrepreneurship and innovation. An explanatory research design was used to investigate how entrepreneurial innovation affects the performance of 164 small and medium enterprises. This sample was selected using a stratified random sampling technique from a study population of 286 small and medium enterprises. A pilot study was carried out on 10 small and medium enterprises in Gitega province, to evaluate the length of the questionnaire, the ease of answering questions, and to get suggestions from the respondents so that they could be included in the questionnaire. Primary data were collected using a semi-structured questionnaire. Descriptive and inferential statistics were used to analyse quantitative data. Content analysis was used to examine qualitative data. The study found that entrepreneurial innovation affects the performance significantly as process, organizational, and market innovation all had a significant effect on the performance of small and medium enterprises in Bujumbura, Burundi, while product innovation had no significant effect. Additionally, the study found that government regulations negatively moderate the relationship between entrepreneurial innovation and the performance of small and medium enterprises in Bujumbura, Burundi. The study recommends small and medium businesses owners/managers that are not innovating, to focus their efforts on establishing entrepreneurial innovation such as process, organizational, and market innovation in their businesses to improve their performance and acquire a long-term competitive edge. The study also recommends responsible offices in the ministry of industries, trade, and tourism in Burundi to lower license fees on small and medium enterprises and to establish more programs that support innovation, which can provide them with the needed skills and resources.