Manufacturing SMEs’ Decisions to Innovate and Transform in the Emerging Economy: Empirical Evidence from Nigeria

Abstract

Presently, manufacturing SMEs are seeking to improve their competitiveness through the integration of innovative technologies to guarantee an additional transformational mechanism for their production. The recognition of manufacturing decision-making as integral to the ability of small and medium-sized enterprises to transform and innovate is established. However, the specific processes that influence manufacturing decision-making among Nigerian SMEs remain not understood. Existing frameworks offers limited explanations to the unique Nigerian situation burdened by scarce resources and limited institutions. The purpose of this research is to investigate how Nigerian manufacturing SMEs decisions are considered and made in their manufacturing related actions for innovation and transformation. Drawing from the qualitative data analysis of 17 SMEs, we identified eight decision domains that play an important role in Nigerian SMEs, which include production control, human resource management, plant size and capacity, machinery, budgeting and financial resource allocation, plant location, technological knowhow and new product development. The findings present empirical evidence in understanding manufacturing SMEs decisions, innovation, and transformation of their manufacturing process and practices. The findings have implications for government policy and will assist professional practitioners in understanding manufacturing SMEs decision, to innovate and transform in the emerging economy in the perspective of Nigeria.