LASU Journal of Employment Relations and Human Resource Management
(LJERHRM)
ISSN: 2705-3482
Volume 5, No. 2, 2025
Pages 1-19
DOI: 10.36108/ljerhrm/5202.50.0210
Innovation Strategies and Competitiveness among Small and Medium Enterprises (SMEs) in Lagos State, Nigeria
Ayodele Anthony AJALA
Lagos State University, Ojo, Lagos, Nigeria
Phone No: +234 803 389 1963
Email: anthony.ajala@lasu.edu.ng
Ibrahim Olanrewaju LAWAL
Kwara State University, Malete, Nigeria
Phone No: +234 802 874 3526
Abstract
This study examines the impact of innovation strategies on the competitiveness of small and medium-sized enterprises (SMEs) in Nigeria, focusing on Lagos State. It explores whether adopting innovative business practices—such as product development, process improvement, and digital transformation—enhances SME performance, market position, and growth. The study also identifies key challenges hindering innovation adoption, assesses the role of financial access in supporting or impeding innovation, evaluates the influence of digital transformation, and examines the effectiveness of government policies in fostering SME innovation. Data for this research were collected from both primary and secondary sources. A structured questionnaire was distributed, with 275 responses retrieved from 284 distributed copies. The analysis, conducted using Pearson Chi-square in SPSS, revealed significant relationships between innovation strategies and SME competitiveness, as well as between financial access and innovation adoption. Digital transformation and technological advancements were found to positively influence SME growth, while government policies were largely ineffective in promoting innovation. Based on these findings, it is recommended that SMEs invest in research and development to drive innovation. Business owners should leverage knowledge-sharing platforms and industry collaborations to stay updated on market trends. Additionally, training programmes on innovation management should be introduced to help SMEs optimise business strategies. Government and financial institutions should create more accessible funding mechanisms to support innovation. Enhancing digital infrastructure and regulatory frameworks will further enable SMEs to embrace technological advancements and strengthen their competitiveness in the market.
Keywords: Access to finance, digital transformation, government policies, innovation within SMEs, support mechanisms, technological advancements..