Resource Allocation and Innovativeness of Selected SMEs in Lagos State, Nigeria

Abstract

Purpose: Small and medium scale enterprises (SMEs) play an essential role in the maintenance of a stable and viable economy, such as continuous employment creation. Besides, by cooperation, SMEs play a significant role in the production process by providing raw materials for large organisations to aid smooth operations. To support SMEs, efforts have been tailored towards ensuring that SMEs can compete favourably amongst themselves and perform at par if not better than their counterparts in other countries. However, in developing countries such as Nigeria, SMEs are seen to be struggling with poor innovativeness. It is observed that the innovativeness of Nigerian SMEs has been in a huge decline and has been attributed to factors such as poor resource allocation. Therefore, this study examined how resource allocation affects innovativeness of SMEs in Lagos State, Nigeria. Methodology: The study adopted a survey research design. The population of the study was 8,396 owners and managers which is the total number of registered SMEs in Lagos State, Nigeria. A sample size of 481 owner/managers of SMEs sampled using the researcher advisors table of sampling. Data was collected using a valid and reliable questionnaire with a Cronbach alpha value greater than 0.7. Data were analyzed using both descriptive and inferential tools. Linear, Multiple and Hierarchical Regression Analysis were used to determine the effect of the variables using Statistical Package for Social Science (SPSS) version 25.0. Findings: The study revealed that resource allocation had significant effect on innovativeness in selected SMEs in Lagos State, Nigeria (β = .290, t = 7.163, R2 = 0.098, p < 0.05). The study concluded that resource allocation affects innovativeness in selected small and medium scale enterprises in Lagos, State, Nigeria. Recommendation: The study recommended that SMEs should focus on a better approach to managing and allocating their resources. This will help to ensure that innovation is resource-driven and can have the tendency on ensuring productivity improvement.