Measuring the innovation capability of micro enterprises in India: Construct development and validation

The development of innovation capability (IC) is a central issue for both practitioners and academicians. However, studies that investigate the dimension of IC in the context of micro-enterprises are absent. Based on capability-based view, the purpose of this paper is to identify important dimensions to build a scale to measure IC in micro-enterprises.

The study is based on focus group discussions for item generation and questionnaire survey on a sample of 379 micro-enterprises in India. The scale is developed with the help of exploratory factor analysis and confirmatory factor analysis. Statistical tests demonstrate that the scale presents composite reliability as well as discriminant and convergent validity.

The findings show that four dimensions form IC in micro-enterprises: resources, networking, risk taking and involvement.

This study develops a new scale, which is a measure of IC of micro-enterprises. The implications have been recommended, which focus upon entrepreneurs, academicians and policymakers interested in developing the IC of micro-enterprises in India.