Abstract:
Small and medium-sized enterprises are a crucial factor for the socio-economic
development of many countries, providing a significant level of employment
generation, poverty alleviation and regional economic growth in emerging regions.
Despite facing numerous socio-cultural and economic barriers, enterprises contribute
to household income, community welfare and national economic output, and
enterprises often remain small-scale and informal, facing challenges that hinder their
growth and sustainability. Small and medium-sized businesses reflect unique local
dynamics and innovative resilience. This research aimed to examine the impact of
innovation on the performance of women-owned enterprises in Sri Lanka’s North
Central Province. The specific objectives of the study were to assess the influence of
product, process, marketing, and organisational innovation on the performance of
women-owned SMEs. The study was grounded mainly in Schumpeter’s theory of
innovation, the Dynamic Capability Theory, the Diffusion of Innovation Theory, and
the Unified Theory of Acceptance and Use of Technology. The target population
consisted of women entrepreneurs operating in various sectors. The sample size of
384 was determined using Cochran’s formula, from which 290 valid responses were
obtained through a structured questionnaire administered via the convenience
sampling method. The data was analysed using SPSS version 26. Descriptive
statistics, correlation and multiple regression analysis were applied to determine the
relationships between variables. The results revealed that all four innovation types
had a significant positive effect on business performance. Process and marketing
innovations showed the strongest influence on performance. The findings underscore
the importance of innovation as a strategic tool for enhancing the competitiveness
and growth of enterprises.
