In terms of industries or business, one of the very important aspects of any growing economy is SMEs which are responsible for driving innovation and development in different areas. SMEs should possess a strategy which manages decisions effectively. Innovation is the key to making such strategies effective to achieve the ultimate goals. Presently, there are so many studies available in the literature for big industries, but less literature is available which collects drivers of innovation practice in SMEs in one article. Hence this article concentrates on discovering some of the driving forces of innovation practice in SMEs through previous studies. There are some factors which act as drivers for innovation practice in SMEs, these drivers help the SMEs to achieve their desired target. A basic literature review approach is embraced to viably identify those key drivers. This study contributes to the innovation management articles on SMEs. Some future research constraints are also suggested in the article.
TopImportance Of Innovation Practices In Smes
Innovation is the key to progress for SMEs, due to globalization of business sectors with a higher contention condition, fast industrial changes and shorter item and innovation lifecycles, numerous organizations, particularly the SMEs are tending towards making innovation the key driver for competitive behaviour, Small and medium-sized enterprises (SMEs) are progressively perceived as focal supporters of innovation and assumed as a critical part in the economies of several nations, SMEs are a critical power for monetary improvement in India. In Italy, Japan and France, the SMEs consists 99% of the industries. In American subcontinent SMEs consists of 98% of the industries although the USA is famous for its big scale industries (Dadfar et al., 2013; Kapoor, 2016; Liu, Li, and Zhang, 2012).
The term small and medium-sized enterprises are small (1-9 employees), medium (10-199). Small and Medium Enterprises (SMEs) in India have seen exponential growth over the last decade. According to the latest reports by the SME Chamber of Commerce and the Ministry of Micro, Small and Medium Enterprises, India currently has more than 48 million SMEs (SME Chamber of India 2018). These SMEs dedicate beyond45% of Indian industries production, 40% of the India’s total goods sale and give work to 1.3 million people every year (Innovation in India 2014). Still, these SMEs face many problems like finance and credit or unable to survive with the changing environment of the market, after the agricultural sector SMEs are ranked second in providing jobs in India (Madrid-Guijarro, Garcia, and Van Auken, 2009; Firstbiz and Greyhound Knowledge Group Release Survey on Indian SME Challenges and Expectations on Eve of Union Budget, 2014). Micro, Small and Medium Enterprises (MSMEs), the real section of the private segment, can be motors of monetary development, foundations for inventiveness and advancement and seedbeds of business enterprise (Ministry of Micro, Small & Medium Enterprises, 2018).
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 (DC-MSME, 2006), the Micro, Small and Medium Enterprises (MSME) are classified in two Classes.