Innovation Strategy and Performance of Small and Medium Entreprises in Kenya-a Case Study of Kakamega County

Abstract

This Study was conducted to determine the effect of innovation strategy on performance of SMEs Kakamega County, Kenya. The broad objective of the study was to examine the effect of innovation strategy on performance of SMEs in Kakamega County, Kenya. The study employed a descriptive survey research design and targeted 318 respondents who were registered SMEs in Kakamega County and the data from the Kenya business list 2017 was used. Kakamega County was targeted because of the high rate of SMEs decline in the area and because of the variability in the nature of SMEs operating in the area including wholesalers, accommodation and hospitality, agriculture, technical services, manufactures and private education and health service providers. Primary data was collected through the use of questionnaires using stratified sampling technique method. A pilot study was conducted to pre-test the validity and reliability of instruments for data collection. The data was analysed using SPSS version 20. Data collected was analysed and interpreted based on the identified independent and dependent variables. Data was analysed using correlation regression using Pearson Correlation to relate the variables. The study found that process, product, positioning and paradigm types of innovation had a positive and significant relationship with the performance of some business types of the SMEs in Kakamega County. The findings showed a positive and significant relationship between innovation and performance of SMEs where those that embraced innovation survived longer and were profitable. The researcher recommend a harmonized and effective process towards a stable and justifiable socio-economic improvement of the county, while modifying SME support policies to country’s perspectives as applicable. He also recommends further nationwide research on innovation strategy and performance on SMEs with the aim of capturing everyday geographies of businesses to inform future programs and policies that aim to address business activities within the Business sector, taking up an innovation after research on which suits which SME best and research also needs to be done on which kind of innovation that suits a given entity.