Innovation Management in Sri Lankan Agro-based Industries: A Developing Country Perspective

Abstract

Innovations are an important factor of success in a competition which is getting increasingly intense. The study mainly focused on to identify the barriers of innovation management and to find out the impact of innovation management on performance of agro-based industries. Five agro-based firms in Southern province were selected purposively. Based on stratified random sampling technique, 30 employees from each of the five industries were interviewed using a pre-tested structured questionnaire and face to face interviews. The data were analyzed by employing descriptive analyticl tools and further Hansen and Birkinshaw's capability measure was used. The results revealed that cost and risk related factors are the main barriers which impede the uptake of innovations within agro-based industries. At present, agro-based industries have gained better company image, client satisfaction, market penetration as well as short and long term profitability at a satisfactory level as main outcomes of innovation. However intellectual property, new processes, services and improved technical capability are the lesser gained outcomes. Though there is a designed national agricultural policy to promote agro-based industries still government involvement as a role model of innovation is not significant. Whilst agro-based industries can be regarded as successful at generating ideas; they are less successful at diffusing these ideas and converting them into products and services at the same level. It is important to consider all the steps of innovation value chain as an integrated flow, so that managers can spot the weakest and strongest links in company's innovation process to gain success and growth of the company.