Research Journal of Economics & Business Studies - RJEBS - The ...

Barriers to Innovation Adoption: A study on SMEs operating in the knitwear
cluster of Tirupur District
Abstract
Dr. (Mrs.) S. Poornima, Associate Professor,
Department of Business Management, PSGR Krishnammal College for Women, Peelamedu,
Coimbatore, India. E mail: sripournima@gmail.com.
Mrs. Savitha Nair, Assistant Professor,
RVS Institute of Management Studies and Research, Sulur, Coimbatore, India.
E mail: savipradhi@yahoo.com
Innovation plays a crucial role in the economic development of nations. With increasing competition
and paced information dissemination, the survival and success of enterprises indisputably depend on
their ability to innovate. Facilitators of innovation have been largely researched in developed
economies, whereas research on SMEs in emerging economies, especially with reference to barriers to
innovation, has been largely neglected. Though it has been empirically proved that innovativeness will
help organizations to enhance upon their performance, not all firms engage in innovative activities.
SMEs are found to have lower propensity to engage in innovation on account of several barriers
related to cost, market, technology, regulation etc. The present study investigates the barriers faced by
the SMEs in the knitwear cluster of Tirupur, in their efforts to adopt different types of innovative
practices in their organizations. The results throw light on the issues faced by the firms in the cluster
and suggest the efforts that can be taken to mitigate the impact of such barriers, thereby promoting
innovative practices essential to face the international business challenges.
Key words: Innovation, Barriers, SMEs, Knitwear Cluster
1. Introduction
Innovations have acquired a key role in the growth and competition strategies of firms today. The
concept has received much attention over the past six decades from the industry as well as the
academia. Innovation plays a crucial role in the economic development of nations. It is regarded as an
essential tool to stimulate growth and enable firms to master the competition brought out by the forces
of globalization and thereby drive organizational success (Tiwari, Buse, & Herstatt, 2007). There are
empirical evidences indicating that implementing innovations improve organizational performance
(Sawang, Unsworth, & Sorbello, 2007). In a business setting, innovation is considered to be central in
creating strategic changes, through which a firm can develop positive outcomes in the form of
improved business performance and competitive advantage. Innovation also means anticipating the
needs of the market, offering additional quality or services, organizing efficiently, mastering details
and keeping costs under control (Zhang, Lim, & Cao, 2004). A firm’s innovation strategy has to be
multidimensional, ensuring the coordinated efforts of all the departments and functions involved. The
dynamics of innovation is however complex as the decision to adopt innovations is surrounded by
several factors that may either facilitate or create constraints for successful innovation adoption. This
can be especially true for the Small and Medium enterprises (SMEs) operating in the Knitwear cluster
of Tirupur competing in the international hosiery market with tough competitors from across the
world. For these SMEs, constant innovative practices and their successful diffusion down their
organizations have become imperative to face the stiffened international competition.
www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 06, April-2013 Page 117