Innovation Competency and the Performance of Women-Owned Small and Medium Enterprises in Kenya

Innovation competency is widely recognized as a critical driver of enterprise competitiveness, sustainability, and growth, particularly among women-owned small and medium enterprises. This study analyzed the level of innovation competency and its influence on the performance of women-owned SMEs in Kenya. The study was anchored on Joseph Schumpeter's Theory of Innovation and adopted an explanatory sequential mixed-methods research design. Quantitative data were collected from 242 women entrepreneurs using structured questionnaires, while qualitative data were obtained through interviews and focus group discussions. Quantitative data were analyzed using descriptive statistics, Pearson correlation, and simple linear regression, whereas qualitative data were analyzed thematically. The findings revealed a high level of innovation competency (Mean = 3.87). Innovation competency exhibited a strong positive and statistically significant relationship with enterprise performance (r = 0.639, p < 0.001). Regression analysis further established that innovation competency had a positive and significant influence on enterprise performance (β = 0.639, p < 0.001), explaining 40.8% of the variation in enterprise performance (R² = 0.408). Qualitative findings identified financial constraints, limited technical knowledge, and market penetration challenges as the major barriers to innovation. The study concludes that innovation competency is a significant predictor of enterprise performance among women-owned SMEs in Kenya. It recommends strengthening innovation support programs, improving access to finance, and enhancing entrepreneurial capacity development to promote innovation-driven enterprise growth.