IDEAL INTERNATIONAL JOURNAL

Small and Medium Enterprises constitute the backbone of global economies, contributing significantly to employment, GDP growth, and regional development. However, their capacity to innovate remains constrained by unique structural, financial, and operational challenges that distinguishes them from larger corporations. This paper provides a comprehensive analysis of innovation management in SMEs, synthesizing contemporary literature from 2020 to 2025 to identify the key determinants, barriers, and enablers of successful innovation. The study employs a systematic review methodology, examining peer-reviewed articles that explore the multifaceted nature of SME innovation. The findịngs reveal that innovation capability in SMEs is determined by six interconnected factors: knowledge and learning capabilities, organizational structure and culture, innovation management and strategy, external networks and collaborations, market orientation and customer insights, and technology and digitalization. Additionally, the paper examines the emerging challenges posed by Industry 5.0 transitions, the role of government fundịng mechanisms, and the imperative of innovation ambidexterity in resource-constrained environments. The analysis demonstrates that successful innovation management requires a holistic approach that integrates internal capabilities with external partnerships, while also addressing the unique contextual factors that shape SME operations across different regions and sectors. The paper concludes with strategic recommendations for SME managers, policymakers, and researchers, emphasizing the need for targeted support mechanisms, capability-building initiatives, and collaborative innovation ecosystems. Future research directions include longitudinal studies examining innovation trajectories, cross-cultural comparative analyses, and investigations into the integration of sustainability and digitalization imperatives.

Open Full Text (PDF)