This article presents a comprehensive analysis of innovation in micro, small and medium enterprises (MSMEs) in India, focusing on the barriers and facilitators within their internal and external ecosystems.
A self-administered questionnaire was used to collect data from 1430 MSMEs across India, employing Structural Equation Modeling (SEM) to analyze the relationships between internal and external factors and innovation adaptation.
The findings indicate that factors such as top management and organization structure, communication, technological capability and adaptation and organizational culture have a positive impact on innovation adaptation within the internal environment. Conversely, employee and market orientation, as well as financial factors, have a negative influence. Regarding the external environment, industry and competitive analysis, internationalization and partner alliances were found to positively affect innovation adaptation, whereas the country's infrastructure and policies had a negative impact.
The study emphasizes that MSMEs have the potential to leverage their internal and external environments to foster innovation within their organizations.
