Innovation in Indian SMEs: Differentiating Innovators versus Non-Innovators

Abstract

Small and medium enterprises (SMEs) are an important source of entrepreneurship and innovation. These enterprises contribute to economy by providing employment to large number of people and also significantly to growth and GDP of an economy. Knowledge has become important factor of success and has replaced old factors like labor and capital. In order to survive in the globalized market, small and medium enterprises use knowledge to innovate. But there are some small and medium enterprises in India that remain non-innovative. Non-innovative small and medium enterprises are not able to recognize business environmental factors. As a result of which they fail to survive and eventually perish. The present study focuses on identifying innovative and non-innovative small and medium enterprises in India. To be more specific, following research issues have been examined: How are innovative SMEs differ from non-innovative SMEs in India? What different types of innovation are adopted by SMEs? The study is an attempt to seek answer to these questions. Extensive literature review includes the concept of innovation, innovation process, management of innovation. Different government, private associations are approached for data collection. The study is conducted on four sectors: Automotive Component, Textile (Garment manufacturing), Pharmaceutical and Information Technology. The result shows that innovative small and medium enterprises differ from non-innovative enterprises on many accounts like innovations and resources availability. The innovative small and medium enterprises are involved in the improvements depending on the nature of sector, product, cost and demand of that product in the market. And the non-innovative enterprises ones fail to recognize challenges and thus perish.