Chapter 3

RESULTS AND DISCUSSIONS

In this chapter, the results of data analyses were presented and interpreted

to address the problem cited in Chapter 1. The information gathered from the

interpretation is used to derive the conclusions. Tables support data presentation

to facilitate the interpretation and the corresponding analysis.

Problem 1. To what extent are the following factors manifested among

SMEs in Butuan City, such as appreciation of innovation, Technological

adaptation, availing of government support, network and collaboration, and

Visionary leadership?

Table 5 shows the extent of appreciation of innovation among the four

sectors of SMEs.

Table 5 displays an overall mean of 2.73 which describes the average

extent of manifestation of appreciation for innovation among SMEs. This is

coherence to the overall mean scores of every sector considered. For example, it

can be observed that health and wellness, transport, events place, and travel and

tours posited the respective mean scores of 2.35, 2.85, 2.83, and 2.73 with

corresponding extent as average.

 49

Table 5

Extent innovation factors as manifested among SMEs in terms of

Appreciation of Innovation

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. Innovation is needed to
2.20 3.00 3.02 2.90 2.78 Average
increase productivity.

2. Innovation is already an
integral part of
1.73 2.27 2.15 2.17 2.08 Low
technological adoption in
our business.

3. Innovation considers
changes in products and 2.47 2.70 2.86 3.00 2.76 Average
processes.

4. Innovation is an investment
2.57 2.97 2.92 3.07 2.88 Average
that is part of our business.

5. Innovation increases
2.40 3.17 3.05 2.77 2.85 Average
business profit.

6. Innovation is an inevitable
input towards higher 2.37 2.83 2.90 3.23 2.83 Average
productivity.

7. Innovation is indeed a
lifeblood of business in 2.70 3.00 2.93 3.07 2.93 Average
recent trends.

Overall 2.35 2.85 2.83 2.89 2.73 Average

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00:
Very High

The health and Wellness sector displays an overall mean of 2.35 which

implies a low level of appreciation for innovation, with the lowest mean standard of

1.73 on the item "Innovation is already an integral part of technological adoption in

our business." This empirically implies that innovation is not yet mainstreamed in
 50

business procedures or operations. One of the reasons is the business owner's

knowledge and understanding of innovation.

The transport sector unfolds an overall mean of 2.85, which indicates an

average extent of appreciation for innovation. However, respondents from the

same sector posited a least mean rating of 2.27 on the item “Innovation is already

an integral part of technological adoption in our business." This further implies that,

like health and wellness, SMEs from the transport sector did not fully innovate in

their business yet because of their relatively low appreciation or knowledge

regarding business innovation.

It can be observed that the events place sector displays an overall mean

score of 2.83 which indicates the average extent of appreciation of innovation.

However, like the previous two sectors, events place also posited the lowest mean

response of 2.15 to the item “Innovation is already an integral part of technological

adoption in our business." It further implies that the events place sector needs

more effort to innovate in business.

Like the other three sectors, table 5 also exposes an average extent of

appreciation to innovation as supported by the overall mean rating of 2.89.

However, the lowest mean of 2.17 also reveals the low extent of the item

“Innovation is already an integral part of technological adoption in our business." It

further implies that SMEs in the travel and tours sector also needed improvements

in terms of business innovation.

Regarding the row mean scores, "Innovation is already an integral part of

technological adoption in our business” posits the lowest mean rating of 2.08 with
 51

an equivalent verbal description of Low. It empirically implies that innovation is

poorly evident in their business, although some SMEs have manifested signs of

being innovative. In addition, the rest of the items are rated with mean scores that

have verbal descriptions of average. According to Albert et al. (2018), most of the

SMEs in the Philippines needed more understanding to increase appreciation of

the important role of innovation in business. The findings presented above only

manifest the need to support SMEs in innovating their operations, especially in the

current trends where innovation is essential.

Table 6 presents the extent of the manifestation of technological adaptation

among SMEs.

It can be observed that all items are highly manifested in all sectors, as evidenced

by the mean scores that all within 3.51-4.50. The largest mean of 4.12 lands on

the indicator “Our business subscribes to cashless transactions," while the lowest

mean rating of 3.92 falls to the items "Our business uses technologies that make

our services efficient" and "Our business keeps updated on the changes in

technological products that are useful in our business." Noticeably, the lowest and

the largest mean scores suggest the high extent of manifestation of technological

adaptation among SMEs.

Looking at the column means, all sectors display overall means with an

equivalent extent as high. In particular, health and wellness, transport, events

place, and travel and tours are coupled with the respective mean ratings of 3.79,

4.07, 4.04, and 4.06. Consequently, the grand mean of 3.99 statistically

substantiates the high extent of technological adaptation among SMEs.

 52

Table 6

Extent innovation factors as manifested among SMEs in terms of

Technological Adaptation

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours
1. Our business uses
technologies that make our 3.80 3.77 4.03 4.10 3.92 High
services efficient.
2. Our business uses
technologies that make our 3.77 4.10 3.95 4.07 3.97 High
services effective.
3. Our business uses the latest
technological products from 3.80 4.13 4.13 4.27 4.08 High
the market.
4. Our services are powered by
the latest technology 3.70 4.00 4.02 4.13 3.96 High
available in the market.

5. Our business subscribes to

the changes in technology
3.73 4.10 4.10 3.87 3.95 High
depending on customer
trends.

6. Our business subscribes to

3.93 4.23 4.13 4.17 4.12 High
cashless transactions.

7. Our business keeps updated

on the changes in
3.77 4.13 3.94 3.83 3.92 High
technological products that
are useful in our business.

Overall 3.79 4.07 4.04 4.06 3.99 High

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very
High

SMEs' remarkable subscription to technology indicates innovative practice

(Martinez-Roman & Romero, 2017). For example, based on the data above, SMEs

used cashless transactions to achieve efficiency. Another study by Llanto & del

Prado (2016) emphasized that businesses in the Philippines use social media for
 53

promotion. Many SME owners and managers have even used Facebook and other

online Apps to sell products and attract the market.

Table 7 displays the extent of manifestation of Availment to Government

Support as one of the factors to innovation among SMEs.

Table 7

Extent innovation factors as manifested among SMEs in terms of Availment

of Government Support

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. Our business can avail

technological support from 1.93 2.10 1.94 2.03 2.00 Low
the government.
2. Our business avails of
innovation assistance from 2.00 2.13 2.02 1.93 2.02 Low
the government.
3. I was able to attend
government-sponsored
2.20 2.07 2.12 2.03 2.10 Low
training regarding
innovations for business.
4. I subscribed to government
programs promoting
business innovation, like the
2.13 1.93 1.95 2.00 2.00 Low
one the Department of
Science and Technology
sponsors.

5. The support availed by the

government regarding 2.20 1.93 1.93 2.30 2.09 Low
innovation is adequate.

6. The support availed by the

government regarding 1.87 1.80 1.95 1.73 1.84 Low
innovation is useful.

7. The support availed from the

government regarding 2.07 2.10 2.02 2.13 2.08 Low
innovation is timely.

Overall 2.06 2.03 2.03 1.94 2.01 Low

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High
 54

It can be observed that all items are coupled with relatively small mean

scores. The lowest mean of 1.84 indicates that most SME owners disagreed with

the item “The supports availed from the government regarding innovation are

useful." This entails that many of the respondents did not experience any

innovation support from the government. In addition, the highest mean of 2.10

similarly supports the low extent of government support. It further implies that many

respondents disagree with the item "I was able to attend government-sponsored

training regarding innovations for business ."In effect, the grand mean of 2.01

exposes the low extent of Availment to Government Support among SMEs.

Regarding the column means, most respondents from different sectors

disagree with all items presented in Table 7. In a more detailed sense, health and

wellness, transport, events place, and travel and tours are coupled with the

respective mean ratings of 2.06, 2.03, 2.03, and 1.94. Meaning all sectors do not

experience innovation support from the government. These statistical results show

an evident gap in the mandates and aspirations of R.A. 11337, which aims to

strengthen, promote, and develop an innovative and entrepreneurial ecosystem

and culture in the Philippines. In addition, R.A. 11293 recognized innovation as a

vital component of the country's development policies to drive inclusive

development and promote the growth and national competitiveness of micro,

small, and medium enterprises. Results further indicate that SMEs do not

experience existing policies related to business innovation support. This further

 55

calls for an abrupt review and action considering the demands of the fourth

industrial revolution, where innovation is vital in all business operations.

The findings presented in Table 7 unveil the reality of the gap between

governance and innovation support to SMEs in achieving economic development.

In the paper of Albert et al. (2018), it was found that innovation support from the

government is essential yet not well established in the local setting. The road for

business innovation in Caraga is yet to be developed. Coherence to the

quantitative evidence shown in Table 7, the government must consider innovation

support for SMEs toward economic productivity and growth.

Networks and Collaborations are essential to business; surprisingly, all

sectors have many networks and collaborations. It can be gleaned from the given

table that all items are rated with mean scores that have equivalent description of

high. Specifically, the largest row mean of 4.06 indicates that the item “I attend

conventions related to business innovations” is highly manifested among SMEs.

Conversely, the lowest row mean of 3.84 empirically implies that the item "I am an

active member of associations or group that promotes business innovations” is

also highly manifested. The largest and lowest mean ratings suggest remarkable

networks and collaborations among SMEs.

In addition, the column means of 3.79, 4.06, 3.98, and 4.08 underscore the

high extent of manifestation of networks and collaborations of health and wellness,

transport, events place, and travel and tours, respectively. However, these

statistical figures only indicate SMEs' remarkable networks and collaboration

 56

efforts. Consequently, the grand mean of 3.98 empirically implies the great extent

of manifestation of networks and collaborations among the four sectors of SMEs.

Table 8

Extent innovation factors as manifested among SMEs in terms of network

and collaboration.

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. I adopted innovations in
my business through the 3.93 3.80 3.90 4.23 3.97 High
help of family connections.

2. I adopted innovations in
my business through the
4.10 3.87 3.90 3.80 3.92 High
help of friends and business
partners.
3. I adopted innovations in
my business through the
4.07 3.87 3.92 3.77 3.90 High
help of government
programs.

4. I attend trainings and

technologies for my 4.13 3.93 3.90 3.90 3.97 High
business from my suppliers.

5. I connect new supply

sources through my 4.10 3.73 4.00 4.10 3.98 High
connections in the business.

6. I am an active member of
associations or group that
3.63 3.80 3.67 4.27 3.84 High
promotes business
innovations.
7. I attend conventions
related to business 4.03 3.97 3.93 4.30 4.06 High
innovations.

Overall 3.79 4.06 3.98 4.08 3.98 High

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High
 57

In the study of Eftekhari & Bogers (2015), networks and collaborations

among SMEs are significant contributors to better business positions and

performance. Hence, SMEs' impressive networks and collaborations can be

considered relevant assets in sustaining growth. In relation to innovation,

networks, and collaborations are also essential, particularly in the exchange of

knowledge, products, and even processes. Further, networks and collaborations

among SMEs might have been influenced by government support programs, such

as those sponsored by the Department of Trade and Industry (DTI).

Table 9

Extent innovation factors as manifested among SMEs in terms of

Visionary Leadership
Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. Our business is operating

4.20 4.03 4.03 4.33 4.15 High
under a well-defined vision.
2. Our business is established
to flourish in the decades to 4.20 3.77 3.85 4.30 4.03 High
come.
3. Our business is positive
towards expansion to other 4.20 4.30 4.17 4.00 4.17 High
areas.
4. The vision of our business
includes the growth and welfare 3.97 4.23 4.07 4.37 4.16 High
of all employees.

5. The envisioned success of

our business is inclusive of the 3.87 4.13 4.12 4.23 4.09 High
success of all the constituents.
6. Our business will take a
calculated risk to achieve its 4.07 4.27 4.04 4.20 4.14 High
vision.

Overall 4.08 4.12 4.05 4.24 4.12 High

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High
 58

Another critical aspect of business is visionary leadership. Table 9

showcases the manifestation of visionary leadership as one of the innovation

factors among SMEs. It can be shown that all items are coupled with mean scores

that fall within 3.51-4.50 and have an equivalent extent of high. The largest row

mean rating of 4.17 lands on the item “Our business is positive towards expansion

to other areas," which indicates the plan to widen the business coverage, attracting

a larger market, and eventually subscribe to innovation while catering to the

complex needs of the clients (Serafica, 2016). On the other hand, the lowest row

mean rating of 4.03 indicates that most respondents agree on the item "Our

business is established to flourish in the decades to come." Thus, both the lowest

and the highest row mean scores substantiate the evident visionary leadership

skills of the SME owners, which is an asset towards growth and development.

Dealing with the column means all sectors posited relatively larger mean

ratings, implying the high manifestation of visionary leadership and the business.

In particular, health and wellness, transport, events place, and travel and tours are

coupled with the respective mean ratings of 4.08, 4.12, 4.05, and 4.24. In effect,

the grand mean of 4.12 statistically substantiates the great extent of visionary

leadership among SMEs in Butuan City.

The remarkably high manifestation of visionary leadership among SMEs is

somehow attributed to trainings and seminars sponsored by the government.

However, according to Albert et al. (2013), successful and productive business

firms are managed by leaders with long-term visions of the company, its
 59

constituents, and its community. Therefore, innovation will likely increase with

noticeable visionary leadership among SMEs (Llanto & del Prado, 2016).

Table 10

Summary of the extent of factors to innovation among SMEs

Health Travel
Events
Indicators and Transport and Mean Extent
Place
Wellness Tours

1. Appreciation of
2.35 2.85 2.83 2.89 2.73 Average
Innovation

2. Technological
3.79 4.07 4.04 4.06 3.99 High
Adaptation

3. Availment of
2.06 2.03 2.03 1.94 2.01 Low
Government Support

4. Network and
3.79 4.06 3.98 4.08 3.98 High
Collaboration

5. Visionary
4.08 4.12 4.05 4.24 4.12 High
Leadership

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High

In a nutshell, table 10 presents the extent of manifestations of the factors to

innovation among SMEs. The availing of government support posits the lowest

mean of 2.01, attributed to the lowest mean scores from the different sectors.

Regarding government support, Health and Wellness scored lowest at 2.06,

transport at 2.03, Events Place at 2.03, and Travel and Tours at 1.94. These

statistics implore the need to strengthen government support for SMEs in terms of

business innovation. Accordingly, business innovation support from the local

 60

government is yet to be developed and launched, which further explains the

scenario.

Next in rank is the extent of appreciation of innovation as evidenced by the

grand mean of 2.73 and having a verbal description of average. This is another

area of improvement that might be intervened with government support.

Appreciation of innovation involves the depth of knowledge of the SMEs towards

innovations. However, the series of discussions with the respondents reveals that

most of them do not know what innovation is though few of them have manifested

some relevant innovation practices. In the study of Albert et al. (2018), appreciation

and knowledge of business innovation go together as key elements that engine

the entrepreneur's attitude toward innovating strategies, products, and even

processes.

Moreover, the remaining indicators, namely; technological adaptation,

network and collaboration, and visionary leadership, are highly manifested among

SMEs as supported by the respect grand means of 3.99, 3.98, and 4.12. These

remarkable statistics unfold strengths and opportunities that SMEs may optimally

use in sustaining business growth and development. Further, the highly evident

network and leadership skills can be attributed to the government trainings and

seminars that strengthened entrepreneurs in the country.

Problem 2. What is the extent of innovation of SMEs in terms of

Marketing, Product, Organization, and ICT?

 61

Table 11 presents the extent of innovation of SMEs in terms of marketing.

Innovation in marketing is much needed in the latest trends of business. Table 11

depicts the average level of marketing innovation among SMEs, as evidenced by

the grand mean of 3.00.

Table 11

The extent of innovation of SMEs in terms of marketing

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. Our business has

modifications in the design of 2.73 3.30 3.20 3.03 3.07 Average
the products.
2. Our business has
modifications in the packaging
process which have helped the 2.67 2.90 3.05 3.10 2.93 Average
establishment market its
products.
3. Our business has introduced
new techniques or channels for
promoting the product through
3.03 3.03 3.15 3.43 3.16 Average
the use for first time of social
media, television, and other
forms of advertisement.
4. Our business has introduced
new methods for positioning the
product in the market or sales
channel, which has helped the
2.77 2.83 3.00 3.40 3.00 Average
establishment in marketing its
products. (For instance, direct
selling, online selling, etc. for
the first time).
5. Our business has introduced
new methods for establishing 2.73 2.63 2.81 3.33 2.88 Average
the prices of goods or services.
6. Our business has changed its
marketing strategy depending 2.50 3.07 3.08 3.17 2.96 Average
on the latest trends.
Overall 2.74 2.96 3.05 3.24 3.00 Average
Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High
 62

All items measuring the indicator posited row mean scores with

corresponding verbal descriptions of average. In particular, the lowest (2.88) and

most significant (3.16) row mean scores respectively fall on the items “Our

business has introduced new methods for establishing the prices of goods or

service” and "Our business has introduced new techniques or channels for the

promotion of the product through the use for the first time of social media,

television, and other forms of advertisement."

As to the column mean ratings, all sectors posited overall mean scores that

fall within the range of 3.51-4.50, which substantially explained the average extent

of marketing innovation. It can be gleaned from the similar table that health and

wellness, transport, events place, and travel and tours are coupled with the

respective mean ratings of 2.74, 2.96, 3.05, and 3.24. Overall, the grand mean of

3.00 statistically substantiates the average extent of marketing innovation among

SMEs.

Considering the market demands, the average extent of marketing indicates

the need for these SMEs to improve and be more innovative in their marketing

strategies. Therefore, part of the recommendations of this study is to encourage

the government to strengthen SMEs' innovation in marketing.

 63

Table 12

The extent of innovation of SMEs in terms of product

Health Travel
Trans Events
Items and and Mean Extent
port Place
Wellness Tours
1. Our business has introduced
new or significantly improved
products to its market and its
competitors (it may have been
2.67 2.53 2.76 3.13 2.77 Average
available in other markets)
utilizing new knowledge or a
combination of existing
knowledge or technologies.
2. Our business has introduced
new products already available
from its competitors in its
2.70 3.03 3.03 3.33 3.03 Average
market utilizing new knowledge
or a combination of existing
knowledge or technologies.
3. Our business has introduced
improved products with
2.90 2.83 2.95 3.20 2.97 Average
enhancement to the product's
performance or quality.
4. Our business has introduced
new products with significant
2.73 2.60 2.73 3.20 2.82 Average
enhancement to the product's
performance or quality.
5. Our business has introduced
new, significantly improved, 2.73 3.10 3.13 3.33 3.07 Average
more affordable products.
6. Our business has introduced
the latest products available in
2.90 2.93 2.83 3.37 3.01 Average
the market to improve our
services better.
Overall 2.77 2.84 2.91 3.26 2.94 Average
Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High

Product innovation in the latest business trends is essential to better profit

and productivity. Moreover, more innovative products attract a wider scope of the

market (Quimba & Rosellon, 2019). Table 12 shows the average extent of product

innovation among SMEs, as evidenced by the grand mean of 2.94. All items

measuring the indicator posited row mean scores with corresponding verbal

descriptions of average. In particular, the lowest (2.82) and most significant (3.07)
 64

row mean scores respectively fall on the items “Our business has introduced new

products with significant enhancement to product’s performance or quality” and

“Our business has introduced new or significantly improved products that are more

affordable to the market."

As to the column mean ratings, all sectors posited overall mean scores that

fall within the range of 3.51-4.50, which substantially explained the average extent

of product innovation. It can be observed from a similar table that health and

wellness, transport, events place, and travel and tours are coupled with the

respective mean ratings of 2.77, 2.84, 2.91, and 3.26. Overall, the grand mean

2.94 empirically supports the average extent of product innovation among SMEs.

The average extent of product innovation indicates the need of these SMEs

to improve and be more innovative in their products as one of the effective

strategies in addressing market demands. Therefore, part of the recommendations

of this study is to encourage the government to strengthen SMEs' innovation in

product development and even promotion.

The whole business organization has an expedient role to play in

innovation. Within the organization lies the leadership, initiatives, and common

bond of interests of the people around. A better, more flexible organization will

open many possibilities and techniques (Damanpour, 2017). Table 13 shows the

average extent of innovation among SMEs in terms of organization, as evidenced

by the grand mean of 3.09.

 65

Table 13

The extent of innovation of SMEs in terms of organization

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours
1. Our establishment has a
responsive organizational 3.10 2.83 2.98 3.27 3.05 Average
structure.

2. Our establishment has

adequate staff in conformance 2.87 3.13 3.08 3.17 3.06 Average
with the organizational structure.

3. Our establishment has a well-

developed and detailed business
strategy to remain competitive 3.07 3.30 3.09 3.43 3.22 Average
and maintain or improve its
market standing.
4. Our establishment has
planning sessions to allocate and 3.13 3.33 3.17 3.37 3.25 Average
manage business resources.

5. Our establishment executes

timely responses to changes in
2.87 2.80 3.03 3.33 3.01 Average
the business environment that
affect the establishment.
6. Our establishment has a
culture of willingness to adapt to
changes when the existing
2.87 2.90 2.95 3.47 3.05 Average
strategies and policies do not
apply to current situations.

7. Our establishment has various

tools and techniques for
continuously improving business 2.60 2.90 2.92 3.47 2.97 Average
strategies to exploit other market
opportunities.
Overall 2.93 3.03 3.03 3.36 3.09 Average
Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High

All items measuring the indicator posited row mean scores with

corresponding verbal descriptions of average. In particular, the lowest (2.97) and

most significant (3.25) row mean scores, respectively, fall on the items “Our

establishment has various tools and techniques for continuous improvement of

business strategies to take advantage of other market opportunities" and

 66

"establishment has planning sessions in the allocation and management of

business resources."

Regarding the column means ratings, all sectors posited overall mean

scores that fall within the range of 3.51-4.50, which substantially explained the

average extent of innovation in terms of organization. It can be observed from a

similar table that health and wellness, transport, events place, and travel and tours

are coupled with the respective mean ratings of 2.93, 3.03, 3.03, and 3.36. Overall,

the grand mean of 3.09 empirically supports the average extent of innovation

among SMEs regarding the organization.

The average extent of innovation in the organization indicates the need for

these SMEs to improve and be more innovative through their organization

processes, mission, and vision. Improving the whole organization towards

innovation will be one of the effective strategies in addressing the market

demands. Along with the recommendations of this study is to encourage the

government to strengthen the innovation of SMEs in the aspects of the

organization as the main drivers of innovation to every business regardless of size

and structure.

Similar to marketing, product, and organization, Table 14 exposes that

innovation in terms of ICT is at the average extent as supported by the grand mean

of 3.07. Accordingly, Information and Communication Technology (ICT) is one of

the backbones of innovation, particularly in business (Audretsch & Belitski, 2021).

All items measuring the indicator posited row mean scores with corresponding

verbal descriptions of average. In particular, the lowest (2.98) and largest (3.17)
 67

row mean scores respectively fall on the items “Our workers are knowledgeable of

the internet" and "Our workers are provided with informal and formal ICT-related

training to upgrade their skills on new ICT learnings."

Table 14

The extent of innovation of SMEs in terms of ICT

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. Our workers are computer

2.70 3.03 3.07 3.47 3.07 Average
literate.
2. Our workers use
computers in their day-to- 2.87 3.03 3.13 3.50 3.13 Average
day work.
3. Our workers are
knowledgeable about the 2.67 2.87 3.06 3.33 2.98 Average
Internet.
4. Our workers have used
this medium to conduct
business activities and 2.63 2.97 3.15 3.53 3.07 Average
access market information
and business opportunities.
5. Our workers are equipped
with technical know-how in 2.47 3.20 3.09 3.30 3.01 Average
ICT and software programs.

6. Our workers are employed

because of their knowledge
2.73 2.90 3.03 3.47 3.03 Average
and previous work
experiences in ICT.
7. Our workers receive
informal and formal ICT-
related training to upgrade 2.60 3.33 3.32 3.42 3.17 Average
their skills in new ICT
learnings.
Overall 2.67 3.05 3.12 3.43 3.07 Average
Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-
5.00: Very High

Regarding the column means ratings, all sectors posited overall mean

scores that fall within the range of 3.51-4.50, which substantially explained the
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average extent of innovation in terms of organization. It can be observed from a

similar table that health and wellness, transport, events place, and travel and tours

are coupled with the respective mean ratings of 2.67, 3.05, 3.12, and 3.43. Overall,

the grand mean of 3.07 empirically supports the average extent of innovation

among SMEs regarding organization.

The average extent of innovation in terms of ICT indicates the need for

these SMEs to subscribe more to ICT products that increase the efficiency and

effectiveness of the services or products of the business towards the target market.

Using essential ICT and improving its skills will be one of the effective strategies

in addressing the market demands. Along with the recommendations of this study

is to encourage the government to strengthen the innovation of SMEs in terms of

the knowledge, access, and use of the latest ICT tools to improve business

productivity and growth.

Table 15

Summary of the extent of innovation among SMEs

Health Travel
Events
Items and Transport and Mean Extent
Place
Wellness Tours

1. Marketing 2.74 2.96 3.05 3.24 3.00 Average

2. Product 2.77 2.84 2.91 3.26 2.94 Average

3. Organization 2.93 3.03 3.03 3.36 3.09 Average

4. ICT 2.67 3.05 3.12 3.43 3.07 Average

Overall 2.78 2.97 3.03 3.32 3.03 Average

Note:1.00-1.50: Very Low, 1.51-2.50: Low, 2.51-3.50: Average, 3.51-4.50: High, 4.51-5.00: Very High
 69

In summary, Table 15 highlights the average extent of SME innovation as

evidenced by the grand mean of 3.03. As implied in the previous four tables, all

sectors of SMEs posited an average extent of innovation in terms of marketing,

product, organization, and ICT. The respect row supports this mean ratings of 3.00,

2.94, 3.09, and 3.07.

With respect to the different sectors involved, table 15 presents that health

and wellness, transport, events place, and travel and tours are coupled with the

respective mean ratings of 2.78, 2.97, 3.03, and 3.32. All these mean scores fall

within 2.51-3.50, further supporting the average extent of manifestation.

The health and Wellness sector unfolds an average level of innovation in all

areas. It reflects the need to improve the efforts of business owners in order to be

at par with the global trends of the business. As discussed in the previous tables,

appreciation of innovation and attitude towards it are some areas to be considered.

Similarly, transport, events, place, travel, and tours also exposed a similar level of

innovation. This indicates that these sectors must spend extra efforts to compete

with the global market. Accordingly, Albert et al. (2018) mentioned that being left

behind with innovation in business increases the chance of bankruptcy. The

government support program is also an area that must be given attention, given

that SMEs undeniably rely on the opportunities that good governance can offer.

Moreover, the numerical figures found in Table 15 imply the need to improve

the overall innovation of SMEs in Butuan City. Significantly, the latest and global

trends in business do not exempt anyone from innovation. Hence, government

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support must increase, and business innovation support programs may be

prioritized.

Problem 3. Which of the identified factors singly or in combination

significantly predict the innovation of SMEs?

Table 16 shows the multiple linear regression results that highlight the

significant factors to innovation among SMEs.

Table 16

Multiple regression results on the factors of innovation among SMEs

Predictors Coefficient t-stat P-value Remarks

1. Appreciation on Significant
0.334 3.716 0.01
Innovation Predictor

Not Significant
2. Technological Adaptation 0.094 1.011 0.314
Predictor

3. Availment of Government Not Significant

-0.026 -0.308 0.759
Support Predictor

4. Network and Not Significant

0.107 1.168 0.245
Collaboration Predictor

Not Significant
5. Visionary Leadership 0.165 1.955 0.058
Predictor

It can be observed that appreciation of innovation significantly predicts

innovation among SMEs. In particular, appreciation of innovation posits a positive

coefficient of 0.334 and a p-value of 0.01. It empirically implies that the variable

positively influences or predicts SMEs' innovation. It further indicates that those

with a higher level of appreciation for innovation have displayed a higher level of

innovation. Albert et al. (2018) found that appreciation of innovation positively

correlates to innovation in many business establishments. Accordingly, when

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business owners appreciate and are knowledgeable about innovation, it leads to

higher tendencies of innovation adoption to business operations.

In another paper by Llanto & del Prado (2016), it was observed that

business owners knowledgeable about innovation have mostly innovated business

products and procedures, resulting in higher production and profit.

On the contrary, Serafica (2016) reported that business owners with poor

knowledge about business innovations did not innovate on their products and

operations, which hooked them to conventional methods. As a result, they are left

behind the latest trends and cannot easily penetrate the market.

Further, other factors, namely; Technological Adaptation, availing of

Government Support, Network and Collaboration, and Visionary Leadership, are

not significant predictors of innovation among SMEs, as evidenced by the

respective p-values of 0.314, 0.759, 0.245, and 0.058. These statistical results are

potentially explained by the lesser variation in the respondents' responses toward

the variables. For example, most respondents posited a similar level of Availment

to Government Support, implying a slight variance that is insufficient to explain

significant variability in the innovation. In addition, the regression equation below

describes the prediction model that is generated in this study. Therefore, in

conformance to the previous table above, appreciation of innovation significantly

predicts innovation among SMEs.

Regression Equation Model for Innovation Among SMEs

Innovation = 0.334*Appreciation on Innovation + 1.902

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The model further implies that innovation is positively predicted by the

appreciation of innovation as evidenced by the coefficient of 0.334 and p-value,

which is statistically significant at 0.05. It can be mainly interpreted as in every unit

increase in appreciation of innovation; innovation is most likely to increase by

0.334 plus the relatively small contribution of other factors as shown in the model.

Problem 4. What are the challenges experienced by the selected SMEs

that hinder their innovation?

Table 17 displays the challenges experienced by SMEs that potentially

hindered their innovation. It can be observed from the given table that the first

subcategory describes the knowledge of the SME owners regarding innovation

and is substantiated by their attitude towards it. These two categories resulted in

the emergence of the theme; of poor knowledge and negative attitude towards

innovation, as presented in a similar table.

The revealed poor knowledge of most SMEs towards innovation, as shown

in Table 17, shows conformance to the quantitative results about their low level of

appreciation for innovation. In addition, the regression model supports that SMEs

tend to display relatively low innovation because of poor knowledge and

appreciation of innovation. In particular, one of the respondents in the focus group

discussions mentioned;

“I do not really know about it. I just used social media to know strategies.

Because we are not really knowledgeable, it's hard to innovate”.

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Table 17

Challenges experienced by SMEs that potentially hinder innovation?

Actual Response Categories Themes
R1- I admit that we lack knowledge about
innovation and need more time.

R2- I do not know about it. I just used social media

to learn strategies. But, because we are not really
knowledgeable, it is hard to innovate.

R3- The hardest part is that most of us are not

informed about innovation though maybe there
are times we have been doing it.

R4- It is hard to innovate because I don't know

how to do it in the business. We need more
understanding and skills about it.
Knowledge to
R5- Ahm, my understanding of innovation is not Innovation
strong. I just actually know from your study that
innovation can improve business. However, we
use the latest technology depending on the costs.

R6- I only used initiatives in business. I am not

sure if it is an innovation already.

R7- Same with other participants, I need more

knowledge about innovation and how it can help
our business.

R8- I know a little of it, but not entirely. This is the

hardest part because I do not know how to be Poor knowledge
updated about it. and negative
attitude towards
R1- the hardest part is that we are not meticulous innovation
about the latest development and only mimic the
latest trends.

R3- Our business still does manual processes

because we are not so ticky about technology.
Attitude to
R4- It is so hard to go with the trends. Like me, I
Innovation
do not have patience with technology, much more
with innovation.

R9- It is not my personality to search and search

about technology. This makes it so hard for me.

R10-Besides, I am not a detailed and nitty gritty

person about technology.
 74

The statement from a particular respondent depicts their poor

understanding of innovation, which made it so challenging for them to innovate in

their business. Conversely, the respondents used social media to know business

strategies, indicating they follow technological trends. Another respondent also

stated;

“Ahm, my innovation understanding is not strong. I just know

from your study that innovation can improve business. But we use the latest

technology depending on the costs”.

The respondent acknowledges that his or her understanding of innovation

is not strong. However, they have been using the latest technology depending on

the availability of the budget. This further manifests that some innovation practices

are evident, but they are unsure if it is already innovation. According to Martinez-

Roman & Romero (2017), using the latest technology is already an indication of

innovation. This means that some SMEs have shown steps related to innovation

but probably not to a great extent because of limitations to knowledge and

resources.

Another hindrance to innovation among SMEs is their attitude towards it.

According to Albert et al. (2018), attitude is a significant determinant of innovation

and adoption among business owners. Those who posited a positive attitude

towards innovation have also practiced innovative ways in business, which

eventually resulted in higher production and profit. In the context of this study, table

17 unfolds some of the responses regarding the undesirable attitude of SME

owners toward innovation. Respondent 4 (R4) said;

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“It is so hard to go with the trends. Like me, I don't have patience with

technologies, much more with innovation”.

The statement emphasizes the difficulty of the respondent to be at par with

the latest trends and much more with business innovation. The lack of patience

indicates that the respondent has a negative attitude toward innovation. In the

study of Roman & Romero (2017), one must be patient about the details of

developments and trends to be innovative. Another respondent (R3) mentioned

that;

“Our business still does manual processes because we are not so

ticky about technology."

The response indicates that some SME owners are still hooked on

conventional processes because of their negative attitude toward the latest trends.

With these testimonies from the respondents, there is a need to improve the

knowledge and attitude of the SME owners towards innovation to possibly compete

with the international business standards and later result in economic

development.

Problem 5. What are the innovation support programs received by

SMEs from government functionaries?

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Table 18

Innovation support programs received by SMEs from government

functionaries
Actual Response Categories Themes
R1- As far as I remember, I attended a fair trade program.

R2- Most programs are trainings and seminars about

marketing and packaging.

R3- I am not sure if it was about innovation. However,

there are support programs like livelihood through
business.

R4- I have not experienced innovation, but training and

seminars about business and laws, yes.

R5- No innovation awareness and support so far. What I

attended was about trade fairs and essential laws and
regulations. Trainings and
Government
Seminars Related to
Support to
R6- Surely. There is no such thing as an innovation Business and
Business
seminar or training. However, there are seminars for Livelihood
SMEs, especially about business development.

R7- I experienced attended several seminars and training

about business marketing and strategy, but not so sure
about innovation.

R8- Same with others, I do not know also about

innovation. But there are programs like training in
business marketing.

R9- What I only know is the livelihood program.

R10- No. I do not hear of innovation support, only

livelihood skills training.

Regarding the innovation support programs received from the government

functionaries, many respondents said they only experienced training and livelihood

assistance. These are government supports but are not specific to innovation

among SMEs. According to respondent 5 (R5);

“No innovation awareness and support so far. What I attended was about

trade fair and import laws and regulations."

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The statements from respondents R6 and R7 support this;

"Surely. There is no such thing as an innovation seminar or training.

However, there are seminars for SMEs, especially

about business development”. –R6

"I experienced attending several seminars and training about business

marketing and strategy, but not so sure about

innovation." –R7

The responses of the SME owners regarding the innovation support they

received manifest that there is no clear innovation assistance they received. This

conforms to the fact that no innovation support program exists that any local

government functionary sponsors. Accordingly, business support programs are

focused on trade fairs, marketing, and business knowledge enhancement. A

supplemental discussion with the focal person from the Local Government Unit

(LGU) of Butuan City emphasized that plans and a road map for the business

innovation program are yet in process.

A follow-up interview with the focal persons from the Department of Tourism

mentioned that innovation efforts are not that strong. Yet, they are currently

implementing the Accreditation Help Desk that the Regional Director, Ivonne B.

Dumadagdag, pioneers. It was established upon the request of the Local

Government Units for those having difficulty navigating the provided online portal.

In addition, as per the Assistant Operation Officer of the Land

Transportation Traffic Management Office (LTTMO) of Butuan City, they are

implementing various transportation-related matters like re-routing the tricycle and

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other traffic management activities. However, per his knowledge, no innovation-

related program was implemented.

The Department of Trade and Industry provides learning and development

opportunities through its partnerships with the Philippine Center for

Entrepreneurship (PCE) and the Philippine Trade Training Center (PTTC). Amid

efforts to expand the country’s trade and industry, the need for business

professionals trained in promoting international trade further arises. The Kapatid

Mentor Me (KMME) Project seeks to assist Micro and Small Enterprises (MSEs)

through mentorship, shared service facilities, and inclusive business models.

Training programs provided through the PTTC focus on product and market trends,

standards, restrictions, costing and pricing, distribution systems, and other trade-

specific concepts.

Relative to the statements from the different government functionaries, it

can be observed that the innovation support program is an area that needs

improvement. Though some agencies have already manifested efforts to promote

innovation, institutionalizing an innovation support program remains essential.

Problem 6. Based on the study findings, what innovation support

program can be proposed to improve innovation practices among SMEs in

Butuan City?

The study's results posited several areas that need consideration to

improve innovation among SMEs. In addition, data revealed a need to improve

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SME owners' knowledge, appreciation, and attitude toward innovation. Addressing

these issues and gaps, table 19 specifies the objectives to be achieved through

the intervention program entitled; "Fostering Awareness and Promoting Innovation

Towards Sustainable Development for SMEs."

Title: Fostering Awareness and Promoting Innovation Towards Sustainable

Development for SMEs

Rationale:

Innovation is an inevitable part of business operations in modern times.

Studies showed that poor business innovation increases the chance of failure and

even bankruptcy. In this study, quantitative data highlighted that appreciation of

innovation and low government innovation support are potential factors that lead

to the average extent of innovation among SMEs in Butuan City. Qualitative data

further revealed that SME owners have a negative attitude toward innovation.

Therefore, issues on business innovation efforts among SMEs are indeed of prime

concern. With the confirmatory statements from the different government

functionaries such as the Department of Trade and Industry (DTI), Department of

Tourism (DOT), and Land Transportation Traffic Management Office (LTTMO), it

is confirmed that innovation support programs are not yet vigorously implemented

in Butuan City in spite of the existing policies such as the Innovation Startup Act of

2019 (RA 11337) and the RA 11293 an Act Adopting Innovation as Vital

Component of the Country’s Development Policies to Drive Inclusive

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Development, Promote the Growth and National Competitiveness of Micro, Small

and Medium Enterprises.

With the primary goal of sustainable improvements in innovation among

selected SMEs, the findings of this study are used as inputs in the development of

the program, as shown in Table 19 below. In addition, a strategic communication

plan is also presented in Table 20 to supplement the objectives.

The main objective of the innovation support program is to help SMEs

become innovative in their products and operations. This will be achieved by

considering the factors influencing innovation among SMEs, as shown in the study

results. Therefore, the first objective is to inculcate high awareness, understanding,

and attitude toward the importance of innovation to business among SMEs. This

will be through government-sponsored trainings and seminars about business

innovation and follow-up workshops and skills development related to innovation.

These initiatives will be sponsored by government functionaries whose mandates

are vertically aligned.

To materialize the plan for innovation support to SMEs, the program's

second component is to propose policy support and appropriation of funds to

emphasize improved innovation among SMEs. With the policy support,

sustainability of innovation support will be made possible and thus creating a

higher possibility of economic development.

The Local Government Unit (LGU) and other government functionaries will

be focused on implementing support programs and institutionalization at the local

levels to make an appropriation of funds possible. They will also monitor and
 81

evaluate the innovation support programs to ensure sustainability and long-term

development.

Moreover, the program's success will be verified using the Means of

Verifications (MOVs) presented in Table 19. Consistent monitoring of activity

reports and appreciation, understanding, and attitude toward innovation will be

done. Monitoring of innovation efforts, activities, and strategies among SMEs will

also be performed through the survey.

 8682

STRATEGIC COMMUNICATION PLAN FOR SME INNOVATION PROMOTION

The rationale for the strategic communication plan to increase the

appreciation of innovation among Small and Medium Enterprises (SMEs) is to help

these businesses stay competitive in today's fast-paced business environment.

SMEs are the backbone of many economies, but they often face challenges in

adopting new technologies and business practices due to limited resources and

expertise.

By increasing the appreciation of innovation among SMEs, we can help

these businesses improve their operations, reduce costs, and increase efficiency.

This can increase profitability, growth, and job creation, benefiting SMEs and the

broader economy.

The communication plan aims to educate SMEs on the benefits of

innovation and provide practical guidance on adopting new technologies and

business practices. It also aims to provide regular updates on new technologies,

funding opportunities, and other resources available to SMEs.

The plan leverages various communication channels, including webinars,

workshops, social media, and email marketing, to reach SMEs where they are and

provide them with the information and resources they need to innovate. In addition,

by partnering with business associations and cloud computing providers, we can

leverage their networks and reach a wider audience.

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83

Overall, the strategic communication plan for increasing the appreciation of

innovation among SMEs is a proactive approach to help SMEs stay competitive,

thrive, and contribute to the broader economy's growth.