Determinants of innovation among, micro, small and medium scale enterprises in the Ghanaian apparel industry

Abstract

The ability to innovate technology represents the highest degree of development of an industrial society. However, there has not been much research focused on innovation of a firm, especially in the apparel manufacturing industries in Ghana. The purpose of this study is to investigate the determinants of innovation within the context of the apparel industry, using cross sectional data collected on fifty apparel firms selected from the Accra Metropolis in the Greater Accra region of Ghana. In order to understand the learning of innovation at the firm level, the evolutionary framework was adopted. Also, a logistic model was used in the analysis of the innovation behaviour of the fifty respondent firms. The results revealed that age of a firm positively influences process innovation but negatively influences product innovation. The result revealed that the share of export in sales and the experience of entrepreneur are positively related to product and process innovation but training duration was positively related to innovation. On the other hand, the results indicated that the firm size, extent of local ownership, training duration, and lack of financial resources did not have significant effects on product and process innovation. In order to aid the innovation activity by firms, explicit policy framework should be adopted. The elements of the policy framework are: introduction of national apprenticeship and starting of firm scheme; annual awards or sponsorships; industrial leave for upgrade courses from higher institutions or industrial attachment in other countries; and increase the awareness on AGOA.