ABSTRACT allows companies to behave in an adaptive manner

ABSTRACT

Globalization
has created a world market driven by fierce competition among organizations. Globalization have forced SMEs to develop a variety of
global-level capabilities, and contributed a lot to enhancing innovativeness.
This paper attempts to focus the importance of innovation to achieve
sustainable development of an organization. The key to achieve sustainable
development lies in the customer satisfaction through improved quality, reduced
cost, reduced delivery lead times and proper communication. A number of studies suggest that a variety of methodology
are used on SME’s innovativeness and further investigate how those affect SME’s
business and innovation performance. This paper reviews the different issues
related to innovation practices in SMEs.

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Keywords: Globalization,
Innovation, Industry, SME.

1. Introduction

The desirable goal for all industries and organizations is
that they want to grow quantitatively .But in the current manufacturing
scenario; industries are facing tremendous pressure of diversified nature due
to extensive sophisticated market, changing customer choice and global
competition. Recently, small and medium enterprises (SMEs) have been regarded
as the engine of economic growth and employment. As the growth of industry
giants have been slowing, the role of SMEs becomes more important 1. Due to
importance of supply chain management issues in the global market environment,
big organizations are heavily dependent on SMEs for the provision of high
quality product and services with the lowest possible cost. Overcoming
challenges, finding adequate financing, are not the only setback for SMEs to be
successful 2. Market pressure now necessitates a strategic and tactical
framework that allows companies to behave in an adaptive manner that permits
continuous evolution in the market. To boost national innovation and economic
growth, it is crucial to drive SMEs’ innovation 1.The changing circumstances
and growing demands of customers for excellence in quality requires major
innovative drives by SMEs in all fields.

Flourishing amidst a challenging environment, the small and
medium enterprises are the socio economic developers of the country with a
major advantage of generating employment at low cost.
Despite various suggestions, there is a consensus that inno vation should
depend on a firm’s innovativeness, in other words, the capability to introduce
new processes, products, ideas, etc. 4,5. Technology covers all
techniques, processes, systems and skills, which are used to convert the
sources into products. In any case, development in technology (quitting old and
traditional methods of doing tasks) is called “Innovation” 6, 7.

A number of studies have suggested a variety of
key determinants on SME’s innovativeness, and further investigate how those affect
SME’s business and innovation performance 8, 9,10.