Innovation and Business Sustainability Among SMEs in Africa

Abstract

Many SMEs lack business competitiveness and sustainability. Their potential for growth and expansion is limited, and they are constrained by institutional challenges (such as high-interest rates and rigid regulatory requirements) which impede their creativity, innovativeness and sustainability. Despite the numerous contributions of the sector to the Ghanaian economy, SME internationalisation in Ghana is at the nascent stage and is bedevilled with a gamut of institutional challenges. Studies of the formal and informal institutional effects on indigenous SME internationalisation in the Ghanaian economy are limited. Furthermore, a stylised framework which serves as a model to aid academics and researchers in investigating the impact of the formal institutions (legal and political) and informal institutions (socio-culture) on Ghanaian-owned businesses is under-canvassed in the Ghanaian entrepreneurial eco-system. Hence, this paper suggests a model for institutions and SME internationalisation to boost their innovativeness and business sustainability.