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Numerous studies are related to, but specifically, the impact of creativity and innovation on performance has not been measured empirically. On the other hand, if there were studies related to the impact and relation to innovation and creativity on performance, they were qualitative studies, and if they were quantitative, they were not related to innovation and creativity.


Therefore, the study has measured the impact of innovation and creativity on the performance of SMEs. The study has also analyzed how entrepreneurs can increase innovation in a company to increase its performance.

 

The article aims to determine the association of firm performance with creativity and innovation. Also, the study has analyzed the impact of creativity and innovation on the performance of the SMEs. The study has also included the following specific aims.

  • The understanding of innovation and creativity
  • Importance of innovation and creativity for SMEs
  • Identification of the practices used to bring creativity and innovation in SMEs.

 

The following are the article’s objectives that have been set according to the problem statement of the study and the whole study was focused on the following research objectives.

  • To observe the impact of innovation and creativity on the performance of the SMEs
  • To see the way entrepreneurship affects the SMEs
  • To observe the factors that can contribute to enhancing the value of the organizations through innovation.
  • The following are the questions that have been answered by the study. In other words, the following are the core research questions that have been addressed by the study.
  • What is the impact of Innovation and Creativity on SME?
  • How can entrepreneurship affect the SME?
  • What is the relation between entrepreneurship, innovation, creativity, and SMEs performance?

 

Definition of Variables

There are three core variables of the study including creativity, innovation, and firm performance. Also, the basic definition of the previously mentioned variables is as follows while the performance of the company has been measured in terms of SMEs’ performance.

 

Creativity

Creativity is the name or idea of adding or putting a certain value in product or service that can enhance the customer experience or can give an exciting look to the product or service. In addition, creativity is the result of imagination and thinking differently. Because creativity is the name of making things different from their traditions. However, creativity can be done by just doing something different for an existing product or service.

 

Innovation

The process of updating products, services or systems is known as innovation. Also, it means that when a company continuously improves its offering and services to delight its customers more professionally by adding value in goods and services, it is known as innovation. Furthermore, innovation could increase the market reputation of the company and can lead it to better results, but it is also risky because innovation may fail sometimes.

 

Performance

Performance refers to the results of a company. Moreover, performance has different dimensions and can be measured in different aspects because the performance of the company can either be measured by strategic or financial prospects. Moreover, financial prospects include growth, profitability and market value of the company; on the other hand, strategic performance includes long term market growth, market reputation, and other strategic aspects. Finally, overall performance can be measured by using financial and strategic aspects by keeping them together and comparing the firm’s performance along with its benchmarks. In this study overall performance of SMEs has to be measured.

 

A literature review of this study consist of two different parts including theoretical review and empirical review. Also, the literature review showed the current knowledge and work of scholars done on innovation, creativity and SMEs’ performance. Moreover, in the literature review, the work that was done regarding the variables above by other scholars have been summarized, and several research papers were reviewed to find the academic significance of the topic. Furthermore, in the theoretical review section, all theories and frameworks regarding innovation, creativity, and firm performance. On the other hand, in the empirical review section, empirical studies have been summarized to conclude the findings of empirical studies related to the topic.


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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Implementing new ideas is also possible for SMEs. Do not stop analyzing the central aspects of innovation before embarking on an improvement project.

Are you looking to innovate in your business? Implementing new ideas in the products, processes, organization or marketing of the SME requires dedication and effort. Account for these aspects of innovation that can impact your project:

 

 

  1. It is not just about implementing new technologies or launching products. A broad concept of innovation refers not only to a change in the product or technology, but also to new forms of organization, marketing or processes. Thus, an innovation may not even be visible to customers, for example, if it is a novel way of managing inventories or managing personnel.

 

  1. To innovate it is necessary to invest. Although it is possible to innovate with scarce resources (the dream of the great idea that revolutionizes the market without effort!), it is usually necessary to dedicate time and money to the search and implementation of new applications. It can be the acquisition of machines, equipment, materials, services such as design or advice, or man-hours dedicated to the project. As the entrepreneur Santiago Siri puts it in his TED conference: “There was no secret formula. (Innovation) It is effort and perseverance.”

 

  1. In all innovation there is a significant share of uncertainty. The results of a research and development process, for example, are not easily predictable. When a company embarks on the search for innovations, it has no certainty about the time it will take to reach an acceptable result, the amount of resources it will need to allocate and even the degree of acceptance that a proposal will have in the market. But with risk there is also the potential reward!

 

  1. An innovative culture is what drives changes. The attitude and behavior of the work group is the true engine of innovation. Thus, it is essential to nurture creativity, encourage teamwork and value the exploration and efforts of your people. “To lead a culture of innovation it is important to recognize that true creative thinking is not solitary,” explains expert Ken Robinson. “And that innovation is more likely to come from the collaboration of people working as a team.”

 

  1. It includes new knowledge or a new combination of existing ones. No idea is totally new, but it is based on knowledge, innovations or previous ideas, which may come from different areas. Observing, exploring, analyzing and implementing ideas generation techniques can help start the process of innovation in your SME.

 

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.