Owner-managers' perceptions of barriers to innovation: empirical evidence from Turkish SMEs

The paper aims to examine the barriers to innovation, as perceived and experienced by owner-managers of Turkish small and medium-sized enterprises (SMEs). The paper is based on an empirical investigation of 224 SMEs operating in Turkey. Emergent results were analysed using a logit regression model to explore barriers to innovation as perceived and experienced by these owner-managers. The results reveal that a lack of government research and development policy represents a formal barrier to SME innovation in Turkey. The existence of a sizeable and thriving underground economy in this country acts as an informal barrier that impacts negatively upon investment in, and increases the cost of innovation in SMEs. In addition, a lack of appropriate sources of finance and skill shortages emerged as significant variables to affect the innovation decisions of SME owner-managers in Turkey. The research sample of 224 businesses, chosen from a population of approximately two million SMEs in Turkey, is relatively small and is not representative of all regions and urban areas in this country. Therefore, this research sample is not a random or statistically significant selection of Turkey's SME sector. The findings of this research have implications for policy makers, practitioners and academics in this and similar countries. The results of this study contribute to a better understanding of the actual and perceived barriers to innovation experienced by owner-managers of Turkish SMEs. Development of effective government policies to support innovative SMEs could significantly enhance the competitiveness of the Turkish economy.