New Product Development Practices and Growth of Small and Medium Enterprises in Greater Kampala Metropolitan Area, Uganda
- May 13, 2020
- Posted by: RSIS
- Categories: Economics, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue IV, April 2020 | ISSN 2454–6186
Benson Tukundane, Muhammad Kibuuka, Arthur Sunday
Kampala International University, College of Economics and Management, P. O. Box 20000, Kampala, Uganda
Abstract: Small and medium enterprises play an important role in the economies of developed and developing countries across the globe. SMEs contribute approximately 20% of GDP in most developing countries. Thus, their growth and survival has become of great concern for most developing countries. Previous studies have indicated that new product development practices have been identified as a successful tool for small and medium enterprises towards satisfying the changing needs of the market and to remain competitive. Apparently, due to a weak link between new product development and Growth of SMEs in Uganda, it appears that there is need for a greater emphasis on studies that link new product development and growth of SMEs. In this study mixed methods approach and cross-sectional research designs were used to establish the effect of new product development on growth of small and medium enterprises in greater Kampala metropolitan area on a sample of 226 top administrators of SMEs. Findings revealed approximately a large correlation between new product development practices and growth of SMEs. Linear regression results revealed that 31.92% of growth of SMEs according to this study was explained by variations in new product development practices.
Keywords: New Product Development, Growth of Small and Medium and Enterprises.
I. INTRODUCTION
The concept of small and medium enterprises (SMEs) dates back 4000 years ago, during the ancient cultures when business flourished among Arabs, Egyptians, romans, Jews, Greeks among many others. During that time, the cottage industries thrived and the workman in craft produced goods at his home and would sell the finished products by himself to the market. As time passed, there was a major resurgence in small scale industries throughout the world(1–3).Globally, countries are facing the challenge of low growth, weak trade and investment, and persistent rise in inequality among small and medium enterprises. Small and medium enterprises are key players in the economies, enabling small and medium enterprises to adapt and thrive in a more open environment is essential in boosting economic growth and development(4).
