Innovation capabilities of small businesses in the city of Johannesburg within the automotive retail industry

Abstract

The automotive industry is a crucial role player in terms of job creation and economic value. In South Africa, the automotive industry is one of the largest manufacturing industries and contributes significantly to gross domestic product. Small businesses play an instrumental role in most economies and contribute to the economy owing to their innovativeness and by creating value-adding products and services through their innovation capabilities. In an environment where business uncertainty is the norm, developing the innovation capabilities of the small business becomes increasingly important. Innovation is regarded as an important success factor in highly competitive small businesses. Hence, it was necessary to explore the relationship between innovation capabilities and innovation performance. The primary objective of the study was to explore the innovation capabilities (leadership, involvement, strategy, rewards and resources) of small businesses in the City of Johannesburg as they relate to innovation performance in the automotive retail industry. The research followed a quantitative research method using a correlation exploratory research design. The target population comprised small business owners within the automotive retail industry situated in various regions of the City of Johannesburg. Convenience and snowball sampling techniques were used to identify respondents, and ultimately 300 respondents participated in the study. Descriptive statistics were used to describe the biographical and background information of respondents, including their attitudes and opinions relating to innovation capabilities. Tests performed as part of the inferential statistics included correlation analysis, regression analysis, factor analysis, exploratory factor analysis, as well as moderation analysis. The relationship between the innovation capabilities of small business owners and their innovation performance was therefore established. The study recommends that small business owners should consider their management approach to innovation capabilities and develop the necessary dynamic capabilities in their business to implement innovation capabilities. Hence, to foster innovation capabilities, small business owners should have an active management approach based on a long-term managerial orientation and an innovative culture. The government should foster a climate favourable to small businesses and provide development support initiatives that recognise the limited capacity for innovation of small business owners in the automotive retail industry.