Measuring Innovation: The Case of Manufacturing SMEs in Developing Countries /Asmaa Ahmed Abdelkader Metwally Youssef

Supervisor:
Prof. Alaa-Eldin Adris
Dr. El-Hassan El-Sabry

Thesis (M.A.)—Nile University, Egypt, 2025 .

"Includes bibliographical references"

Contents:
TABLE OF CONTENTS
1 CERTIFICATION OF APPROVAL......................................................................... iv
2 ACKNOWLEDGMENT............................................................................................ vi
3 DECLARATION...................................................................................................... vii
ABSTRACT..................................................................................................................... viii
4 LIST OF FIGURES ................................................................................................... xi
5 LIST OF TABLES.................................................................................................... xii
6 LIST OF ABBREVIATIONS..................................................................................xiii
1 INTRODUCTION ...................................................................................................... 1
1.1 The Role of Innovation in the Global Economic Landscape .............................. 1
1.2 SMEs as Catalysts of Economic Growth ............................................................ 3
1.3 Innovation and SMEs in the Egyptian Economy................................................ 4
1.4 Rationale for Focusing on Manufacturing SMEs ............................................... 5
1.5 Challenges Hindering Innovation Success and the Ambiguity Around It .......... 6
1.6 The Importance of Measuring Innovation .......................................................... 7
1.7 Research Area ..................................................................................................... 8
1.8 Structure of the Thesis ...................................................................................... 10
2 INNOVATION MEASUREMENT CHALLENGES FOR MANUFACTURING
SMES................................................................................................................................ 11
2.1 Defining Innovation: Concepts and Ambiguity................................................ 11
2.2 Innovation Measurement: Purpose and Approaches......................................... 12
2.3 The Oslo Manual and Global Frameworks....................................................... 14
2.4 Limitations of Existing Innovation Metrics for SMEs ..................................... 15
2.5 Challenges in Measuring Innovation in Manufacturing SMEs......................... 17
2.6 Gaps in the Literature and Contribution of This Study..................................... 18
3 RESEARCH METHOD............................................................................................ 20
3.1 Research problem.............................................................................................. 20
3.2 Research objectives........................................................................................... 21
3.3 Research Significance....................................................................................... 22
3.4 Research design ................................................................................................ 23
3.4.1 Phase 1: Development of Innovation Measurement Areas........................... 24
x
3.4.2 Phase 2: Relevance Check with Innovation Support Experts (Quantitative
Analysis) ................................................................................................................... 29
3.4.3 Phase 3: Applicability Check with Manufacturing SMEs (Qualitative
Analysis) ................................................................................................................... 31
4 RESULTS AND DISCUSSIONS............................................................................. 34
4.1 Phase 1: Development of the Measurement Areas for Innovation ................... 34
4.1.1 Extraction of Innovation Indicators in Action .............................................. 34
4.1.2 Mapping the Indicators to the Oslo Manual ................................................. 35
4.1.3 Grouping Similar Indicators and Developing the Measurement Areas........ 36
4.2 Expert Validation (Validity Check with Industry Experts) .............................. 39
4.2.1 The need for industry validation ................................................................... 39
4.2.2 Selecting Industry Experts’ Profiles and the Eligibility Criteria .................. 39
4.2.3 Conducting the Survey with Industry Experts.............................................. 40
4.2.4 Validity Check with Industry Experts........................................................... 41
4.3 Applicability Check with Manufacturing SMEs............................................... 42
4.3.1 Measurement Areas Currently Being Applied.............................................. 42
4.3.2 Measurement Areas Not Currently Measured but Considered Feasible....... 43
4.3.3 Measurement Areas Not Measured and Considered Difficult to Apply....... 44
4.4 Discussion......................................................................................................... 45
4.4.1 Refining Academic Models: What the SLR Revealed and Missed .............. 46
4.4.2 Role of Industry Experts in Validation ......................................................... 47
4.4.3 Applicability Insights from Egyptian SMEs................................................. 47
4.4.4 Cross-Phase Triangulation: Patterns of Convergence and Divergence ........ 49
5 CONCLUSIONS AND RECOMMENDATIONS ................................................... 51
5.1 Conclusion ........................................................................................................ 51
5.2 Recommendations............................................................................................. 51
5.3 Limitations of the Study.................................................................................... 52
5.4 Suggestion for Future Research ........................................................................ 52
6 REFERENCES ......................................................................................................... 54
APPENDICES .................................................................................................................. 59
Appendix (1) - Innovation Measurement - Industry Expert Survey ............................. 59
Appendix (2) - SME Interview Template ..................................................................... 65
Appendix (3) - Full list of the measurement areas and the corresponding V values.... 76
Appendix (4) - The list of Measurement Areas and the associated key aspects........... 78

Abstract:
Measuring Innovation: The Case of Manufacturing SMEs in Developing Countries
Asmaa Ahmed Youssef
Innovation serves as a pivotal driver of competitiveness and growth for Small and Mediumsized Enterprises (SMEs), particularly in developing countries. However, measuring
innovation within these contexts remains a significant challenge due to the absence of
standardized tools and context-specific frameworks. This research addresses the challenge
of measuring innovation in manufacturing SMEs in developing countries, where
innovation is often informal, incremental, and poorly captured by existing global
frameworks. The study aimed to answer the following key research questions: What are
the most relevant and cited innovation indicators in academic literature? How relevant and
applicable are these indicators to manufacturing SMEs in Egypt and similar economies?
What practical barriers affect the implementation of innovation measurement in these
settings?
To address these questions, the research employed a mixed-methods approach. First, a
systematic literature review was conducted to extract innovation indicators from highly
cited publications. These indicators were mapped to the Oslo Manual’s innovation
dimensions and grouped into measurement areas. In the second phase, the Aiken Validity
Coefficient was applied by industry experts to assess content validity. In the final phase,
qualitative interviews were conducted with Egyptian manufacturing SMEs to examine the
practical applicability of the validated indicators and uncover implementation challenges.
The findings revealed that global measurement tools often fail to capture the operational
realities of SMEs in developing countries. Most SMEs do not identify with formal R&Dbased indicators and instead rely on adaptive, experience-driven innovation. The study
validated a set of innovation measurement areas that are more relevant, feasible, and
grounded in SME-specific practices. Moreover, findings indicate that existing innovation
measurement frameworks fail to reflect the unique operational environments and
constraints faced by SMEs in these regions. The study proposes a tailored innovation
readiness model that accounts for local market conditions, resource limitations, and
industry dynamics.
This research concludes with the development of a validated set of measurement areas,
which is essential for assessing the innovation capacity of manufacturing SMEs in
resource-constrained settings. The developed measurement areas provide a foundation for
SME self-assessment, program design by support organizations, and evidence-based
policymaking in innovation ecosystems for developing economies.
Keywords: Innovation Measurement, Manufacturing SMEs, Developing Countries,
Innovation Indicators, Innovation Measurement Areas, Expert Judgement

Text in English, abstracts in English and Arabic