Innovation And Productivity In Small And Medium Sized Enterprises:Empirical Evidence From Ghana.

Innovation in this 21 st century is the blood bone for every Small and Medium sized Enterprise(SMEs)operation regarding to productivity.It is not only in developed nations but also in the developing countries as well.This study investigated the link between Innovation and Productivity in middle-income country-Ghana.A standard data from World Bank website on enterprise survey about four cities(Accra,North-Tamale,Tema and Takoradi)in Ghana was used for this investigation.The results testified that Innovation positively impact productivity in SMEs operations in the Ghanaian setting.It further proved that SMEs that are more innovative have competitive advantage.However,the elements that determine such innovativeness in SMEs in the Ghanaian context could not be easily predicted without this study.The larger the size of the firm,the more extra expenses encountered and with the increasing firm size ceteris paribus,the innovation output is decreasing.It is clear that larger firms invest higher amounts of money into their operations but they do not all have the motivation to innovate but smaller firms that have technical know-how,innovational motivation,and are faced with competition are innovative.The size of the firm therefore has effects on the innovation impact on the firm productivity.This has important implications for competition policy procedures.The impact of innovation boost on productivity in SMEs is positive in Ghana.As indicated by studies in advanced nations on innovation and productivity links to be very strong,in a middle-income country Ghana for this study,is positive but due to difference in innovation determinants specifically knowledge-based capacity,information,communication technology(ICT)and environmental characteristics.Therefore,findings on SMEs innovation and productivity links in advanced countries are not all applicable in middle-income countries.