Innovation activities by small and mediumsized manufacturing enterprises

The primary aim of this research is to explore innovation activities and ascertain the rela-tionships between these activities and growth performance of SMEs in the Tanzanian manu-facturing sector. The applied model has been derived from international studies of innovation. A survey of SMEs combined with in-depth case studies was made to study innovation prac-tices of SMEs in the Tanzanian manufacturing sector. The results of this survey are used to compare the situation with findings of previous research. An increased level of applied change is associated with innovating SMEs, and a positive relationship between innovativeness in the SMEs with growth performance could be established. Based on the comparison of the results, recommendations are made for stimulating innovation. This research had the objective to explore the issues of innovation in small and medium-scale manufacturing enterprises in the context of a developing economy. Since management in this type of industry is the initiating and driving force, this study investigates the relationship between innovation management practices and (growth) performance of these enterprises. The results in Tanzania are com-pared with previous findings in the innova-tion literature. Innovation Activities of SMEs Empirical studies have demonstrated that in order to manage the innovation process suc-cessfully, enterprises must develop particular practices (Pitt and Clarke, 1999; Tidd, Bessant and Pavitt, 1997). That is, to develop specific ways of performing tasks and organizational behaviour that Tidd, Bessant and Pavitt (1997, p. 32) refer to as ‘the way we do things around here as a result of repetition and reinforce-ment’. Organizational practices differentiate one organization from another, and also determine the success or failure of that organ-ization in the long run. They call innovation management a process of searching for effec-tive practices. Innovation management practices of SMEs are defined as the activities that SMEs undertak