Exploring Innovativeness Of Small And Medium Enterprises In Sri Lankan

Innovativeness has been recognized as one of primary means by which a firm can achieve sustainable growth, as well as address the key issues facing firms in today's competitive environment, greater cost efficiency and the provision of new products to meet customers demand and national economic development. This study aims to explore the factors that drive innovativeness of small and medium enterprises in Sri Lanka. Drawing upon data from 124 firms, the analysis was carried out using correlation and hierarchical linear regression analysis. The findings reveal the fact that besides firm internal factors such as strategic orientation, market orientation and structural flexibility, the external factors such as association with other firms and government assistance programs have positive impact on the firm innovativeness. In addition, high cost of innovation, lack of appropriate sources for finance and lack of information about technology and market are discovered as the obstacles which discourage the innovativeness in small and medium enterprises.