Examining the Effects of Business Innovation Among Indigenous Small-Scale Businesses in Chongwe Constituency

Business Innovation plays a critical role in shaping the industrial and firm competitiveness of any nation. Innovation is often discussed in the setting of developed countries, but the rise of emerging economies such as Zambia has generated a new interest in understanding innovation in developing economies. This paper aims to study the effects of business innovation among indigenous small-scale businesses in Chongwe constituency, to analyze the effectiveness of innovation on the profitability of indigenous small-scale businesses, to establish business management and survival strategies used among indigenous small scale businesses constituency and to assess business innovation and creativity practices utilized among indigenous small-scale businesses. The study was exploratory in the sense that it sought to elicit information about management innovations among SMESs in Chongwe district. The study used a mixed research approach of quantitative and qualitative. The study employed probability sampling so that every participant had equal chance of being selected, targeting about hundred (100) SMESs in Chongwe Constituency. The study used face to face distribution of questionnaires for data collection, to yield highest cooperation and lowest refusal rate. The information collected was analyzed using descriptive analysis with pie charts, bar charts, thematic and content analysis. The findings of the study reviewed that Entrepreneurial technological innovation affects significantly SMEs growth 45% strongly agreed, 29% agreed, 13% were not sure, 8 % strongly disagreed whilst only 5% disagreed. The study reviewed that those who are able to determine profit and loss for their business, 73% of the respondents are unable to compute the profit and loss account for their business while only 27% were able to compute a profit and loss account the study established that innovation was key source for achieving competitive advantage for most SMEs. It was found that the majority of the SMEs felt that with innovative and creativity their business would grow and hence make more profits. Further, the results of the study showed that financial performance of firms increased with the increase in innovation level as 75 % of the respondents indicated that they felt that financial performance of firms increased with the increase of in innovation level. Basing on the findings, it was recommended that Ministry of Finance and the Ministry of Commerce and Trade should create an innovation fund under the Ministry, which can help provide financing to SMEs, especially for supporting innovation. To establish a center of excellence for innovation in the Ministry or its attached offices to help promote a culture of innovation. To provide enabling environments for SMEs who may be facing stiff competition with other multi -national companies and change the laws and regulations that cause negative impacts for the overall growth of the SME sector and its innovation, such as specific labor regulations pertaining to factories.