Audrey Paul Ndesaulwa^1,, Jaraji Kikula²

This explanatory study uses a desktop methodology to investigate the world wide existing empirical studies1 results on the relationship between Innovation on Small and Medium Enterprises (SMEs) performance. The literature survey reveal that the studies on innovation and its effect on performance are observed to have concentrated to Western, Middle and Far East and very little empirical evidence is noticeable in Africa. The issue of innovation and how it relate to firm`s performance and specially SMEs is therefore yet to be exhaustively explored. The results from review further find that no consistent results on whether the innovations altogether influence firms performance. The conclusion is therefore not generally viable. The nature of the empirical results reported in this paper indicates a need for such studies especially in Africa where the research fissure is widely observed in this area. The paper is thus a wakeup call for empirical studies that assess the impact of innovation on SMEs performance in Africa and Tanzania in particular where the studies of this nature are rarely found in the review of literature conducted in this paper.

process innovation, technical innovation, innovation activities, business performance