Exploring the Key Drivers of Radical and Incremental Innovation in Moroccan SMEs: A Principal Component Analysis Approach

Abstract

Innovation is a critical driver of business success, and firms must develop effective innovation practices to stay competitive. This study aimed to identify the key drivers of innovation within Moroccan SMEs companies and explore how they can improve their innovation performance. Using the Principal Component Analysis (PCA) framework, the study identified six groups of questions related to different aspects of innovation, including investment in R&D, embracing new ideas, formal processes, fostering a culture of learning and improvement, having a clear vision and strategy, and collaboration with external partners. The findings suggest that firms that have a strong culture of innovation tend to invest more in R&D, track innovation using specific KPIs, and prioritize long-term growth over short-term gains. Additionally, collaboration with external partners and having a dedicated team for driving innovation efforts are also critical factors for innovation success. The study concludes that firms must strike a balance between radical and incremental innovation, have the necessary resources and capabilities, create an organizational culture that encourages risk-taking and creativity, and have effective innovation management processes in place. Consequently, firms can gain a competitive advantage and thrive in today's dynamic business environment.