Structure-Based Innovation Index (SBII) and Firm Performance in Ecuadorian Manufacturing SMEs: Evidence from Capital Efficiency and Sales per Employee

Manufacturing SMEs in Ecuador operate under macroeconomic volatility and limited financing; improvements in processes and management are key mechanisms for sustaining productivity and competitiveness. In contexts where conventional innovation indicators are unavailable, financial ratios constitute replicable signals that close a measurement gap in emerging economies. This study constructs the Structure-Based Innovation Index (SBII) as the mean of within-sample percentile ranks of capital efficiency (EBIT/Assets) and sales per employee, using financial statements from the SCVS, sectoral indicators from ENESEM, and size classification from REEM. The sample includes 58 formal manufacturing SMEs in Ecuador in 2023, stratified by province and size. Performance is measured through labor productivity and operating profitability (EBIT/Sales). Tercile comparisons reveal clear performance differentiation: the high-SBII group exhibits substantially higher median sales per employee (USD 129,552 vs. USD 40,176 in the low group) and higher operating profitability. Signals are more strongly reflected in productivity than in margins, indicating that operational gains materialize earlier. A robustness check using SBIIalt confirms that gradients are not index artifacts. High-performing SMEs are distinguished by institutionalized operational discipline: asset utilization, throughput stability, and cost control. The SBII is a replicable proxy for structure-based innovation in data-constrained environments. The findings align with SDGs 8, 9, and 12.