Entrepreneurial innovation and performance of the food, beverage and tobacco industry in Lagos State

Oladimeji, Olusola Olanike (2016)



The study examined the entrepreneurial innovation and performance of Food, Beverage and Tobacco Industry in Lagos State. Specifically, it examined the forms of entrepreneurial innovation adopted by SMEs in food, beverage and tobacco industry in Lagos State; examined the determinants for the adoption of the entrepreneurial innovation by the SMEs in the State; investigated the challenges faced by SMEs faced in the implementation of entrepreneurial innovation and analysed the influence of entrepreneurial innovation on business performance of the SMEs in the State. Primary data was obtained through the administration of structured questionnaire. Purposive sampling technique was used in selecting six Local Government Areas in the State in Lagos State known to have highest concentration of food, beverage and tobacco manufacturing Small and Medium Enterprises. Business owners and managers of the enterprises were purposively selected based on their capability to provide relevant information needed for the study. Proportionate sampling technique was used to select 254 respondents out of 693 enterprises purposively selected population. Two hundred and twenty copiesof questionnaire administered were retrieved, giving a response rate of 87%. Data collected wereanalysed using descriptive and inferential statistics. The results from the study showed that incremental innovation (70.1%) was adopted than radical innovation at (29.3%) by the respondents. The result also revealed that incremental innovation was highly adopted irrespective of age and size of the firm while radical innovation was used most by oldest firm, 31years and above (31.7% and 30.1%) respectively. However, organizational strategy (t=3.371; p<0.05) and leadership (t=3.309; p<0.05) have positive and significant effect on the adoption of radical innovation, while customer and competition has negative and significant effect on the adoption of incremental innovation (t=-4.161; p<0.05). Based on the results of the study inadequate funding, inadequate infrastructure, poor level of management commitment, high cost of innovation and established enterprise ranked highest among the challenges faced by the enterprises. However, in spite of these challenges, radical innovation (β= 0.397, t=3.584; p<0.05) as well as incremental innovation (β= 0.341, t=4.079; p<0.05) has contributed positively to the performance of the Enterprises. Although, Entrepreneurial innovation contributed on the overall bases, greatly to the market Share (β= 0.496, t=3.368; p<0.05) and (β= 0.514, t=4.617; p<0.05) of the Enterprises. The study concluded that entrepreneurial innovation has significantly contributed to the performance of SMEs in Food, Beverage and Tobacco Industry in Lagos State.