Levels and Characteristics of innovation activity of Siatan and baluchestan SMEs

The importance of innovation in organizations´ competitiveness is an undeniable fact. Innovations reflect a critical way in which organizations respond to either technological or market challenges. Small and Medium sized enterprises (SMEs) constitute 94 % of Iranian firms. According to Iran statistic website the value added of 94 % of Iranian firms is just about 10 % of the whole value added in country. This study assumes the lag of innovation is the reason of uncompetitive nature of Sistan & Baluchestan SMEs. This paper reports on the results of a study that examined barriers to firms’ innovation among a sample of 86 managers of small and medium-sized enterprises (SMEs) in Sistan & Baluchestan. Findings of the study show that the most significant barriers are associated with costs, whereas the least significant are associated with lag of information. The survey results show that Sistan & Baluchestan SMSs are not collaborating with universities and higher education institutions; they do not see university as a main source of information. Then it is not a surprising point that 29.0 % unemployment rate is reported in 2009 however 50 % of studied SMEs reported lack of skilled labour as a barrier to innovation.