Impact of Intellectual Capital on the Small and Medium Enterprises’ Innovation Activities in South-West Nigeria

Abstract

This study examined the Impact of Intellectual Capital on the Innovation activities of Small and Medium Enterprises (SMEs). The specific objective determined the effect of human capital on product innovation and assessed the impact of structural capital on process innovation. It also examined the effect of relational capital on service innovation. The population of the study consisted of twenty-three thousand, two hundred and ninety (23,290) registered SMEs located in South-West Nigeria. The sample consisted of 393 SMEs drawn from the population using a multi-stage sampling technique. Structured questionnaires were employed to collect data from business owners and managers of the selected SMEs in the manufacturing and services sectors. The data were analysed using linear and multiple regression with the aid of SPSS 24. Findings from the study indicate that all three dimensions of intellectual capital – human, structural and relational- have a positive and significant effect on SME products, processes, and service innovation activities. The study concluded that SMES must utilise its intellectual capital to improve its capacities for innovation, thereby enhancing its level of competitiveness.