Does Innovation Matter For Economic Development? An Empirical Study Of Small And Medium-Sized Enterprises In The City Of Kumba - Cameroon

In recent years, the development priorities of African countries have centred on private sector development to build a strong market economy that gives a more dynamic role to indigenous entrepreneurs and their innovative small and medium-sized enterprises (SMEs). This paper investigates the potential for indigenous SMEs in Cameroon to successfully emerge as agents of economic development through innovation. The analysis includes the personal characteristics that make up an indigenous entrepreneur as well as the contemporary environments in which SMEs operate. Building on Schumpeter’s notion that entrepreneurship contributes to economic development through the interplay of new firm creation, innovation and competition, questionnaires and interviews were conducted with indigenous entrepreneurs of selected SMEs in the city of Kumba, one of the most important concentrations of economic activity in the English-Speaking region of Cameroon. The results reveal that while economic profit is a priority for most entrepreneurs, SMEs exists mainly to alleviate poverty through income generating activities and contribute to economic development by providing employment and income for the poor. The SMEs studied focused on adapting, imitating and modifying existing innovations rather than pursuing genuine Schumpeterian innovation. This suggests that innovation is not a priority for the SME sector and therefore policies aimed at catching up with modern technology should be the central focus in providing assistance for indigenous entrepreneurs and these are suggested in this paper.