JOHN OLUWASEGUN AJIBIKE2022-12-122022-12-122019https://nerd.ethesis.ng/handle/123456789/579The study investigated the product innovation features of small and medium scale enterprises (SMEs) and determined the extent of process innovation among Nigerian SMEs. It also analysed the marketing innovation, assessed organizational innovation among the SMEs and examined the influence of the various types of innovation on SMEs’ performance in Nigeria. These were with a view to examining the effect of innovation on the performance of SMEs in Nigeria. Secondary data were obtained from Nigeria innovation survey database (2011), undertaken among 500 small and medium scale enterprises with about 41% response rate. The instrument used in the survey was guided by Oslo manual, standardised through validation workshops under the New Partnership for Africa’s Development African Science Technology and Innovation Indicators (NEPAD ASTII) initiative. Primary data were used to complement the secondary data on SMEs in selected local government areas in South-West Nigeria. A structured questionnaire was used to elicit information from selected respondents in the three selected States of Lagos, Oyo and Ogun (because of the large presence of SMEs in the selected States and local government areas). Simple random sampling technique was adopted in selecting a sample size of 400. The data obtained were analysed using percentages, binary and ordered logistics regression techniques. The result revealed that improved goods (56%), product innovation developed mainly by enterprise (28%), product innovation developed by enterprise with other enterprise/institutions (85%), product innovation developed by other enterprises/institutions (96%) and product innovation developed mainly by enterprises modifying of others (79%) were product innovation features of SMEs. Finding also showed that improved production methods (49%), improved logistics, delivery and distribution (52%), improved support services (52%), process innovation developed by enterprise/group (29%), process innovation by enterprise with other enterprises (85%), process innovation developed mainly by other enterprises/institution (96%), process innovation developed by enterprise by modifying innovation of others (78%) portrayed the extent of process innovation among Nigerian SMEs. In addition, the result revealed that improved packaging (48%), improved sales and sales method (51%) and new technologies for product promotion (53%) were the marketing innovation adopted by the SMEs. Furthermore, the result showed that improved knowledge management system (43%), major changes to workplace organization (40%), improved relationships and (61%) were peculiar organizational innovation among the SMEs. Finally, the result that revealed organizational innovation (t = 3.194, p < 0.05), marketing innovation (t = 2.359, p < 0.05), product innovation (t = 2.393, p < 0.05) and process innovation (t = 2.359, p < 0.05) had significant influence on firm performance. The study concluded that innovation had significant effect on the performance of SMEs in Nigeria.